Evening star. [volume] (Washington, D.C.) 1854-1972, 1913-01-04
GAS COMPANY CITED
Must Show Why 1t Holds
Georgetown Stock.
T. L. HUME FILES SUIT
Receiver Asked for Securities Held
by Washington Concern.
PRICE OF PRODUCT FIGURES
Complainant Declares No Increase
in Rates Would Be Necessary
if Companies Could Agree.


show cause next Friday why it should
not be compelled to distribute pro rata
| among the stockholders of the Wash
ington company the $3.50 shares of stock
of the Georgetown Gas Light Company
| standing in it's name on the books of the
latter corporation.
The Washington Gas Light Company is
also required to show cause why re-
celVer should not be appointed to take
charge of the $3.50 shares of stock and
hold them pending the determination of
! the matter by the court
Suit Filed by T. L. Hume.
The rule is based on suit in equity
| filed today by Thomas L.. Hume. through
| Attorneys Brandenburg & Brandenburg.
| as a stockholder of the Washington Gas
| Light Company and in behalf of such
| other stockholders as may care to inter-
vene. Mr.. Hume names as defendants, in
| addition to the company, it's officers and
directors, Joseph Letter, president, and
| Howard S. Reside. Ord Preston. James
| NJ. Green, Daniel Fraser Guy V Whit
ing. John d. McIlhenny, William B. Orme
and Lawrence Townsend.
Investment Without Consent.
The complaint of Mr.. Hume charges
that the investment by the officers of
! the Washington company of it's surplus
profits or net earnings in the stock of
| the Georgetown Gas Light Company was
without the consent or permission of its
stockholders, and was unlawful. He
claims the money so used should have
been distributed among the stockholders.
and that the stock so purchased in reality
belongs to them, and is held by the cor
poration merely trustee for them.
The court is informed that dividend of
S12o per share was declared by the
Georgetown company June 3, 1912, on it's
capital stock, which comprises 5000
shares. of which the Washington company
owns $500 shares.
Refused to Pay Dividend.
OF this dividend, Mr.. Hume says. the
Washington company was entitled to
Sl.412JO, which the Georgetown company
refused to pay on the ground that the
holding of the stock by the Washington
company is unlawful and in violation of
its charter rights.
The charge is made that the officials
OF the washington company, although de-
MED dividend on the stock and refused
the right TO vote it at a stockholders
meeting, have taken no step toward
securing the dividend or establishing the
company's rights under the stockholding
Money Belonged to Stockholders.
Mr.. Hume holds that as the stock was
purchased with money which should have
been distributed among the stockholders,
the company should now pro rate the
stock among it's stockholders that the
| individuals may exercise their rights over
| the stock, which are denied to the cor
| poration as in excess of it's powers.
| The refusal of the officers of the WASH
! ington company to make the distribution
causes serious loss to him and to the
other stockholders entitled, Mr.. Hume al
legeS.
! A Corporate Paradox.
| said:
This situation is corporate paradox.
| The Washington Gas Light Company holds
| for it's stockholders "a majority of the
stock of the Georgetown Gas Company,
and yet it does not control or direct that
company.
| eff this holding is legal one it en-
| titles the Washington Company to con-
| troll the Georgetown company. yet it does
not control it; it entities it to direct that
| company's policy, Yet it does not direct
| it: it entities it to take possession of that
company, yet it does not possess it; it
entities 1t TO appoint directors, a presi-
dent and other officers, and to administer
| the company's affairs, yet it does neither.