The sun., 1908-05-08
TELL OF J.B. DUKES THREATS
INDEPENDENTS, ~ COURT, SAY
He MEANT TO WIPE THEM OUT.
Contract for Purchase Of the n. p. Richard
son. Jr.. a. 60. Concern Obtaiaed BY
"Duress and Fraud" the Company
Says-MF. Duke AZ the Trial In Newark,


Says MIR. Duke AZ the Trial In Newark,
An attempt on the part Of theAmerican
Tobacco Company TO force the sale Of the
r. p. Richardson, Jr., 4 Co, concern OF
North Carolina to the former corporation
was the basis Of an action heard by Vice
Chancellor Howell at Newark yesterday
The American Tobacco Company alleged
that the Richardson people refused to trans
fer 0OO shares OF stock bought by the former
in 1903.
In reply the defendant set forth that
threats had been made 10y the larger cor
poration to practically exterminate the
smaller II the sale we're not made. These
threats we're charged TO James B. Duke,
president Of the American Company. II is
alleged in the bill that Robert p. Richardson,
Jr.. Edward f. Richardson and Edward X.
Walters, who own a majority OF the stock
r. p. Richardson a Co., entered into con-
tract TO convey the shares in dispute,
Representing the American Company were
Richard v Lindabury, Attorney-General
Robert H. McCarter and Charles l.. Corbin,
of New Jersey. and Col W. W. Fuller and
.Jinius Parker Of New York and formerly OF
North Carolina. For the defence appeared
John r. Hardin Of New Jersey and c. d.
Watson. Col. James T. Morehead and c, j,
Burton Of North Carolina Mr. Duke was
present during the proceedings
Il is sst up in the bill that a. result OF
negotiations entered into in July, 1909,
a contract was executed on August ~, 1908,
by which it was agreed by the two Rich
ardsons and Walters TO cause the capital OF
the Richardson company to be Increased
from $4,000 to SSOOOOO, Of which S2O0,OO
was TO be s per cent. non-cumulative pre-
ferred stock and 100000 common stock,
and to issue also 500 900 twenty year per
cent. bonds. The contract further provided
for the acquisition by the Richardson com
pany Of the trademark "Old North State,
paving therefor 100000 as follows: Two
hundred thousand dollars in preferred
stock Of the company, $4,000 in common
stock and $4,000 in per cent. bonds.
According to the bill the trademark had
Heretofore been leased annually by the
Richardson company from Robert r. Rich
ardson, who controlled II.
In their answer the defence contended
that the execution Of the contract was
obtained by duress Misrepresentation and
fraud and that the contract is in restraint
Of trade and creative OF monopoly against
public policy and therefore void. 1t is
further set forth that the contract was
negotiated partly in New York and partly
in North Carolina and was finally delivered
in North Carolina. The answer goes on
TO recite that the business Of the defendant
was always conducted outside Of the State
Of New York. it's factory being in North
Carolina while its sales are made IN various
States, but not at all in New York or New
Jersey; therefore, il the contract he a con-
tract az all in contemplation OF law, It is a
North Carolina contract.
II il admitted in the answer that the de-
livery Of the certificates for the COO shares
Of stock. together with an assignment and
power Of attorney for the transfer on the
books the company, was made. The
answer further declares that the contract
was executed on the faith OF certain repre-
eentations made by James B. Duke, which
have not been followed and in god faith
lived up to by the comp claimant company.
tions and fraud in procuring The signatures
Of the defendants, the Richardson's and
Walters to the contract Of August II, 1903,
the defendant company denies the validity
OF the contract and denies the title OF the
complainant 10 the stock in dispute.
Continuing, the answer go's at length
into a story Of alleged aggressive methods
and rlinOus cutting OF prices by the Ameri-
can company. which. the answer says,
possesses unlimited means and has
contrived with remark bic success TO over
come and break down competitors with
lesser resources, either entireiy driving
them from the business or bringing them 70
a condition where the complainant could
acquire their plants and business on it's own
terms, or compelling them TO such open
OF secret alliances az the aims and purposes
Of the complainant may require.
II is further told in the answer that the
Richardson company has been the object
Of persistent attack by the American com
panv, so that il required the utmost efforts
on liz part to hold and extend it's long es-
tablished trade
Robert p. Richardson then recites Of
having received letter from J, b, CoOh,
director in the complainant company who
was friend, inviting him 10 conference
in the oh7cp Of the American Tobacco Com
pany in New YORK city The letter con
iained an intlmation that plans were IN
process or preparation FOR renewal o The
onslaught upon ths defendants business
Mr.. Richardson, the answer says, being
weary OF warfare and anxious 10 avoid
continuation OF The same. journeved 10
New York whore lie met Mr.. LoDb, Mr..
Duke and Vice President Perciysl s. Hill
of the American company Inc ansver
states that Mr. Cobb Informed MIN ia the
presence Of Mr.. Duas and NJ Hill that un-
less some satisfactory adjustment should
I've mode il was the purpose % Mr., Duke
himself to take charge OF a renewal Of the
warfare upon the Richardson company's
trade. which. as the president lMr Duke
then stated. had heretofore been con-
dueted by the boys, and that the warfare
now proposed would be warfare Of eX-
termination
Ii is then related in the answer that Mr..
Richardson Impressed by the threats and
discouraged by the outlook, proposed to
the complainant 10 sell his interest in the
company for a reasonable price and Quit
the field and he named the sum which he
regarded rs a reasonable price,
According to the answer Mr.. Richard
sons proposition was not accepted, but the
contract which the American company is
now seeking 10 make effective was the out
come OF that conference
Mr.. Richardson was on the stand all
afternoon and he testified specifically 10
the allegations sNt forth in the answer.
The case Is still on.