The news-democrat. (Providence, R.I.) 1906-1909, 1906-05-24

Judge Arthur l.. Brown granted a pre-
llminary injunction without prejudice In
the United States circuit court yesterday
against President Edward l.. Holbrook
and others OF the Gorham Manufacturing
company restraining them from making
"A transfer of stock as voted at the recent
stockholders meeting against the protest
OF George II. Robinson, plaintiff in the
case.
Mr. Robinson IS a minority stockholder.
and seeks 10 prevent the defendant from
transferring and exchanging Gorham
Manufacturing company stock for that OF
the Silversmiths' company OF New York
Walter b. Vincent OF this city. and
Guggenheimer. Untermeyer & Marshall,
OF New York. represent the plaintiff. and
Richard r. Comstock OF Comstock &
Canning the defendants.
Judge Browns comprehensive opinion is
dn part a. follows:
I'm dtpoSing, OF this petition for
preliminary injunction, we may pass all
questions as TO the regularity OF the call
for the special meeting OF the sharehold-
ers OF the Gorham Manufacturing com
pany. and as 10 the breadth OF the powers
conferred upon the directors. and proceed
at once TO the substantial questions pre-
sented by the resolution Of the board of
directors OF the Gorham Manufacturing
company passed May /. 1906
This resolution inztructed Mr.. Hol-
brook. the treasurer Of the Gorham COM
pany to vote upon the shares of stock OF
The Silversm.ths company held by the
Gorham company, In favor OF an increase
OF the capital stock OF The Silversmiths'
company from 100000 10 $1,000. 900 divided
into loo, 900 shares at 500 each. for an issue
Of 10000 shares at par. as follows: ST. 75o, 600,
or 1880 shares at par for cash 10 holders
OF preferred and common stock OF the
Gorham company in proportion to their
holdings, any portion Of said 1880 shares
not taken by the Gorham company share
holders TO be sold TO the public $4,000
or 80. 600 shares or so much thereof as may
he taken I'm exchange in par to holders
OF the common stock OF the Gorham com
pany, in exchange for their holdings In
the Gorham company AT n valuation Of
s2l0 per share for the common stock OF
the Gorham company.
The treasurer was further instructed
20 sell to The Siverymiths company the
Gorham companys holdings OF shares OF
stock in the Whiting Manufacturing COM
pany. of the William n. Durgln company.
OF The Silmersmiths company OF New
Jersey. OF The Silversmiths' company OF
New York. and all the assets late of w.
r. Kerr q Co. Inc. at a price not less
than the cost thereof 10 the Gorham com
pany TO the late Of sale. he complainant.
q non-agsentinR shareholder OF the Cor
ham company seeks 20 enjoin the carry
ing cut OF this plan, contending that Il is
beyond the corporate powers OF the Cor
ham company. is offensive TO the prin-
ciple that n person occupying a flduciary
relation who Is authorized 10 sell property
for another cannot himself become the
purchaser. directly or indirectly. and is
against the rights and financial interests
OF the complainant"
1T is also alleged that this plan Is not
in pursuance Of any need or purpose OF
the Gorham company. but Is solely for
the purposes OF the majority OF sharehold-
ers and especially Of Mr.. Holbrook. and
and will result I'm a contro
OF the Gorham companys affairs by the
company, as a holding com
pany.
Assuming that it may be for the In.
terest OF the Gorham company 90 dispose
OF its sharehodlngs I'm other corporations |
though this is disputed by the complain
ant there are serious doubts or the right |
to do this at n price fixed arbitrarily by
persons who are 20 become shareholders |
i'm the Silversmiths' company. which Is 90 |
acquire these shares OF stock. and ~ Is |
at least. whether ~ II n /
corporation purpose of the GOrham com |
pany TO promote. 60 provide for or 10 |
lend the sanction of It's corporate vote 10 /
the acquisition by the Silversmiths com
pany NJ considerable proportion of the I
go that the Silversmiths company is 20 /
have a considerable voice in. II not con. |
troll Of the management ~ the Gorham |
"The Gorham oompsny's authorized