Daily new dominion. [volume] (Morgantown, W. Va.) 1897-1906, 1903-11-06

Judge Mason this morning hand
ed down his decree in the Iron City
Oil and Gas Company case. 1t was
known that the decision of the court
would be announced. and there was
a large attendance of attorneys.
The number of spectators was small
butthey were deeply interested.
Judge Mason's decision ordered
the cancellation of the 17S shares Of
fraudulent stock issued by the di-
rectors to themselves at par and
made permanent the injunction re-
straining the old board of directors
from acting as the directors of the
company. The defendants are to
pay the costs in the suit and the
expenses of the receiver. The
$17,S00 paid by the directors for the
fraudulent stock, 10 per cent in cash
and the rest in notes is to be return
ed to the directors.
In giving this decision Judge
Mason briefly reviewed the case,
which has been the most interesting
one, on account of the prominence Of
the men, the, amount of money, and
the principles involved that has
been heard for years. On February
Is, 1902, Chas. Boehler and Leopold
Sigwart, stockholders of the Iron
City Oil and Gas Company, made a
contract with James C.. Frazer,
trustee, for the sale of not less than
10, nor more than 102 shares of
stock at $2l250 share, par value
800. There were then only liz
shares OF stock in existence. Boehler
and Sigwart said at that time they
did not have that many shares, but
thought they could get them.
On February II, Boehler and Sig
wart delivered the 102 shares and
Frazer paid them the money, except
for shares, which he held for a
ward. On February 30. meeting
of all the old stockholders except
Hall was held, and ITS shares of
new stock was issued at 800 share,
and David Brewer, the president,
distributed the new stock almost
exclusively among the men who had
sold out to Frazer.
On February "a, meeting of the
stockholders was held for the pur
pose of eleeting a new board of di-
rectors. The old directors had got
hold of five shares Of the old stock,
which WIS distributed among them,
each having one share. An election
was held and Frazer's 102 shapes of
stock did not cut any figure. The
holders of tae old stock retired and
held meeting of their own.
On March s Judge Mason was
asked for an injunction restraining
the directors from acting as such,
from issuing any more stock, and
placing the company in the hands of
a receiver. f. B. Stewart was ap-
pointed the receiver The defend
ants, made motion to dissolve the
injunction and discharge the re-
ceiver. Judge Mason overruled the
motion, and the case was taken to
the supreme court. That body sus-
tanned Judge Mason, and in giving
the opinion Judge Dent character
lied the issuing of the new stock at
par as gold brick transaction. :"
The case then came up for trial on
its merits and has dragged through
several terms of court. Volumes of
dispositions have been taken and it
is now nearly two years since the
fight began.
In giving his opinion, Judge
Mason said the matter seemed SO
unusual and unheard of, that he was
at loss to know upon what theory
the parties who. sold their stock at
1912 so and issued more to them
selves at 500 based their action.
Mr.. Brewer, he said, had been pretty
frank about it, and had explained
his action on hair splitting dis
tinction between the duties and
rights of Brewer, the stakeholder
aud Brewer, the director. As the
former he seemed to think it his
privilege to speculate in the stock,
and as a director, his right to issue
more stock that he might speculate
therein. He did not think the di-
: rectors consciously committed moral
or criminal fraud, but acted within
what they thought were their lega!
right. He believed the directors
knew of the sale of stock. Mr..
Brew bad said they did.
Whether = not the hoard elected
on Maich 3 was legal, Judge Mason
said the counsel for the plaintiffs
could decitie. The claim of the En-
pre- Brick Company was referred to
s.aeial commissioner, who was
also to audit the accounts of the
receiver and the costs in the case.
Attorney Van A. BarrickmaA asked
for suspension order of 30 days, which
was granted. IL the case is taken to
a higher court, as it probably will be,
the plaintiffs attorneys say they will
enforce the payment OF the SIT, SOC
for the fraudulent stock. In allowing
the old directors TO retain this aud
the So, 900 in cash, Judge Mason in
ferred that according to the rule, the
plaintiffs could collect it, but he was
not inclined TO be harsh In the mat.
Ter.
The attorneys 10 the case were Geo
G. Sturgiss, Cox and Baker and Jane:
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