The Pacific commercial advertiser. [volume] (Honolulu, Hawaiian Islands) 1885-1921, 1904-03-25

-lFIC COM M ERClAL Adv Il.
/ PLY failed The American Dry Goods
: Association, Ltd, was organized by
| Portuguese subscribers to its shares,
| and the original intention was to keep
the stock in the hands of that nation
aIfty. Its capital stock was $1,000
divided into shares of 500 each. On
a fateful day ]. a. NJ. Osorio sold to
l. 3. Kerr & Co, Ltd, % shares and
other shareholders followed his exam
pie with their holdings until the Kerr
corporation owed % shares. or a clear
majority with dozen shares to spare.
THE GRIEVANCES STATED.
Complainants alleged iIlegality Of
meetings and election of officers, etc,
and a conspiracy to wipe out the bust
ness of the A. D. G.. A, Ltd. They also
declared that the assets of the Assoc
citation were unlawful1y converted to
the use of the Kerr company. Accord
ing TO their own evidence, it appeared
there was nothing in the charter or
bylaws of the Association to prevent
the sale of their shares by stockholders
to anybody, or restricting the owner
ship of stock to Portuguese 1t came
out, Also that after Mr.. Osorio had
sold MS x SHARES There was al EuSil OA
other stockholders to sell theirs to L.
B. Kerr & Co, Ltd. Their own testi-
mony, which tailed exactly with that
of Mr.. Kerr, showed that the sole re
quest of compliments was that Mr..
Kerr should buy their stock also. They
employed attorneys, whose whole en-
ployment seemed to be for the purpose
of selling their. stock. They seemed to
think that as Mr.. Kerr had bought
some of the shares he should buy them
ALL 1t is found that Mr.. Kerr had
the legal right TO buy the shares he did.
RIGHTS OF MAJORITY.
The next question the court consid-
dered was whether Mr.. Kerr, or his
corporation, having competing BUSH
ness, had the right to purchase this
stock and, having done so. was Mr..
Kerr restrained under the law from
contracting with the American Dry
authorities is quoted to uphold the
principle that where a contract is made
by the majority stockholders of a cor
poration, which is neither fraudulent,
beyond it's corporate power nor illegal,
a court of equity will not interfere to
undo it. On this point Judge Gear
comments:
KERR WAS SQUARE.
''In this case [ can see no unfairness
in the transaction between L. B. Kerr
or L. B. Kerr & Co., Ltd, and the
American Dry Goods Association, Ltd
No actual fraud has bee44 shown, no
undue advantage nor 'unconscionable
bargain proved. According to the evil
dence, Mr. Kerr went into the business
Il hn + T1O bIIf1I
a good retail business at that store;
he put in over $4,000 for the stock and
ended up with losing that and charging
over $1,000 more to profit and loss for
merchandise furnished. There is not
one word of evidence showing that he
ever charged the American Dry Goods
Association a single cent more for
goods than their wholesale value, or
that he received one cent more from
the concern than he was entitled to.
There is no evidence that the business
was not carried on solely to subserve
and promote the best interests of the
American Dry Goods Association. If
the business was a losing one sureIYf
the majority stockholders had the right
to discontinue and sell out" ~
THE RICH HAVE RIGHTS.
The decision expounds the law asfbS-
ing intended to protect the rights Of
the rich as well as the poor, the prin
ciple being concisely stated in the fol-
lowing quotation from the New Eng
land Reporter:
1.-The law does not set up one stand
ard by which to determine the rights
or measure the conduct of the rich.
and another for the poor. Its protect
ing shield is extended alike over all. |
Its pride and glory are to mete out
equal and exact justice to all in the
same scale-rich and poor alike. In |
this all find security and protection"
BRILLIANT ADVOCACY.
Judge Gear, in extending this idea |
of equality before the law, pays a |
glowing tribute to the ability with |
which Mr.. Highton advocated the cause
of his clients. He says:
Counsel for plaintiff in his argument |
has repeatedly and with forensic abil- |
ity urged the Court to consider that
this is a case of five ignorant Portu-
guese appealing to a chancellor for
their rights, coming to an American
court for justice as against the trium-
virate power of two corpora tions and !
L. B. Kerr.
THE brilliant appeal of counsel might |
nave 4olCe with d jury, Dul l1e CIAdh-
cellor must be governed by the facts
proven, guided and controlled by the
rules of law.
THE law is made alike for all classes |
and conditions of men, and the chan |
cellor, while sympathizing with the
poor man in his losses, cannot forget |
the legal rights of the richer man, even |
though it be a powerful and rich cor
poration.
''The rights of corporation, no mat
ter how wealthy, or powerful, are as
sacred in the eyes of the law as those |
of the poorest litigant, and the con-
verse is also true