The daily sentinel., 1907-09-14

. - ,
q great pleasure. 1t will be re- a
q membered that Mr.. Yetter not a
q long ago won out in hard u
q fight against the Raven Mining a
q Co. *
The Denver papers of yesterday
contained extended accounts of the
courts decision. The following is
from the Post:
After three years of litigation in
the district court between the minor
ity and majority stockholders of the
Western Elaterite Roofing company,
ia which C. A. Armstrong and L. F.
Eppich are the minority interest and
plaintiffs, and e. ]. Yetter, owning
more than 60 per cent of the stock
of the company, defendant, has at
last ended, Yetter being victorious
in all but one point.
The plaintiffs filed five suits, of
which three were dismissed by Judge
Bliss, the remaining two cases COW
ering the principal points at issue.
One case involved the ownership of
patent. which was decided in favor
of Mr. Yetter. The other case had
nine distinct issues involved, and
Mr.. Yetter won out in all but one
point. The court held that a salary
of $1.S00 for a part of the year 1903
had not been sanctioned by the
board of directors, as required by
law. In commenting upon this point
Judge Bliss said: 1.-THE court finds
that there is no actual fraud in any
of the transactions complained Of"
Among the different issues in
volved the plaintiffs set out various
charges of fraud and bad faith on the
part of Yetter in overstepping his
rights as director and owner in
voting a salary to himself as mana
ger and royalties to himself for
goods manufactured under his pat
ent and shipped into territory owned
by himself
The court allowed Mr.. Yetter 81,
500 royalty contehded for and a CON
tinued yearly royalty on his patent,
together with other amounts which
were claimed by the plaintiffs.
The decision of Judge Bliss as 1t
relates to the power of minority
stockholders is important. The court
said that the whole case turns upon
the application of the doctrine of rat
ification of unauthorized acts of di-
rectors by the stockholders. He says
that he is of the opinion that where
the act of one or more of the direct
ors Is voidable, at the instance of the
corporation. on the ground that the
director had a personal interest in
the transaction, and that this being
Inconsistent with his fiduciary rela-
ton to the corporation, fraud will
be presumed, although no actual
fraud was committed.
The holders of a majority of the
stock, the court says, can ratlfy the
act and bind the corporation and all
its sjockh olders, even though the
vote of the stock held by such direct
n n dfraatnrc ha 70,
constitute majority.
''1f the holder of a single share of
stock" writes Judge Bliss, should
be able to prohibit the directors from
all personal dealings. no matter how
just and fair, with the corporation.
and no matter how necessary to the
existence and success of the corpor-
ate enterprise, he would be in a po-
sition, through technicality of the
law, TO levy blackmail upon those
owning substantial interest in the
corporation, or, in mere caprice, be
able to defeat and ruin the business
of the company"
The rights of minority stockhold-
ers, the court says, is amply protect
ed as they have but to appeal to the
courts If any act of the majority
stockholders is fraudulent, and the
wrong will be righted.
Mr. Yetter has gained a reputation
as business man of worth and hon
esty. and his friends are congratu-
lating him on the excellent showing
made in court. Some time ago Mr..
Yetter engaged in a fight with the
Raven Mining company, in Utah, for
some elaterite claims, which the Ra-
ven was trying to obtain, and he was
successful.