The new dominion. [volume] (Morgantown, W. Va.) 1876-1904, 1903-11-11
IRON CITY CASE.
Famous Litigation Ended in
Circuit Court This Morning

Defendants Lose Every Contention
stock cancelled and Injunction Per
petuated-Can Retain Money Paid
For Fraudulent stock -0rder Sus-
nended for 80 Days.
Judge Mason this morning hand
ed down his decree in the Iron City
Oil and Gas Company case. II was
known that the decision of the court
would be announced, and there was
a large attendance OF attorneys.
he number of spectators was small
but they were deeply interested.
Judge Mason's decision ordered
the cancellation of the IT'S 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
$l7, 800 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, aud
the principles involved that has
been heard for years. On February
10, 1902, Chas. Boehler and Leopold
stockholders of the Iron
City Oil and Gas Company, made
contract with James G. Frazer,
trustee, for the sale of not less than
70, nor more than 102 shares of
stock at $2i2.50 share, par value
$ 100 There were then only liz
shares OF stock in existence. Beehler
and Sigwart said at that time they
did not have that many shares hut
thought they could get them.
On February II, Boehler snl Sig
wart delivered the l02 shares and
Frazer paid them the money, except
for 3 shares. which he held for
ward. On February 30. a meeting
Of all the old stockholders except
Hall was held, and It's 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 Tor the pur
pose of electing new BOARD of di
rectors. The old directors had got
hold OF dive shares oil the old stock,
which was distributed among them,
each having one share. An election
was held and Frazes's 102 shap, of
stock did not cut aoy figure. The
holders OF the old stock retired and
held meetii.. of their own.
On March 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
q receiver. K. b. Stewart was ap.
pointed the receiver. The defend
ants, made motion to dissolve the
injunction and discharge the re
ceiyer Judge Mason overruled the
motion, and the case was t.keh 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 az
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 aud it
is now nearly two years since the
fight began.
la 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
$212.50 and issued more to them
selves at 800 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
AID Brewer, the director. AS the
former he seemed TO think it his
privilege to speculate in the stock,
and as 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.
Brewer had said they did.
Whether or not the board elected
on March 3 was legal, Judge Mason
said the counsel for the plaintiffs
could decide. The claim of the EN-
pre- Brick Company was referred to
- G. 'SCtai SOui w no WIS
also to audit the accounts OF the
receiver and the costs in the case.
Attorney Van A. Barrickman asked
Tor suspension order OF 80 Gays, which
was granted. II the case is taken to
4 higher court, as it probably will be,
'he plaintiffs attorneys say they will
the payment of the SIT, 800
'or the fraudulent stock.> In allowing
,he old directors to retain this 'and
.he 81, 600 in cash, Judge Mason in
erred that according to the rule, the
could collect it, but be was
not inclined to be harsh in tie mat
,er.
The attorneys 10 the case were Geo.
}. Sturgiss, Cox and Baker and James
:. Frazer for the plaintiffs and W. S.
Meredith, Van A. Barrickman and
Jhas. A. Goodwin, for the defendants.
Mr.. Goodwin retired from the case
about one year ago.
Judge Mason also banded down his