The Washington herald. [volume] (Washington, D.C.) 1906-1939, 1913-01-30
ANOTHER SUIT
in GAS CASE
Washington Gas Ownership
of $3.50 Shares George
town Stock Questioned.
WANT STATUS DEFINED
Exhaustive Statement of Fscts-Wall
Street and Local Stock
Markets.

by L. A. FLEMING.
Whether the Washington Gas Company
has legal title TO the $3.50 shares of the
Georgetown Gas Company, and by rea-
son of its possession, the right of owner
ship and control of the latter corpora
ton, will be decided year hence, per-
haps, when the Supreme Court hands
down its unalterable decision.
1t may be that the Hume case may
beat that filed by the Georgetown Gas
Company yesterday to a final adjudi-
cation, but the two are more of less
different
Mr. Hume seeks the distribution of the
stock to the shareholders of the Wash
tngton Gas Company; the legal minor
'ty and the controlling faction in the
georgetown Gas Company asks that the
certificate for $3.50 shares be declared
null and void and the ownership legally
declared by the court.
The bill filed Wednesday by William
q. johnson for the plaintiff is volumi-
nous, and yet it is apparently a straight
forward history OF the case from the
organization of the two companies down
through the period of secret purchas-
ing Of Georgetown stock by the Wash
lngton Company. the stock being in the
name of John r. Mclean, for which
the latter never paid a cent, the Wash
.ngton Gas Company being the buyer.
IN IND the was INFORMED OF lnlS
secret buying, the last block of 2s4 shares
having been acquired in March, 1895.
Plaintiff claims that the act of Con-
Gress creating the Georgetown Gas Com
1any provided that the president and six
directors of the company should live in
Georgetown, and that while in complete
control of the corpora ton the Washing
ton Gas Company ignored this provision,
and that w. Riley Decide, to whom Mr..
Mclean gave one share. and who did not
live in Georgetown, was maintained as
president through Il series of years.
The plaintiff declared that he never
owned Washington Gas shares. or had
knowledge or means of knowing the &C
tual facts TO tine relation to and con-
troll by the Washington company of the
said $50 shares of Georgetown stock,
'inr any facts which would put it up TO
Inquiry to the relation to and control
lay the Washington Gas Company until
October >, 1897.
Up to this time the control had been
sed through secret holdings by in
ais
transferred October z, 1907
or about October =, 1907 the $3.50
We're transferred from John r.
an to the Washington Gas Com
thereafter and until June. 1911,
aid Washington Gas Company voted
stock. and through said majority of
dominated the Georgetown Gas
Dany, elected officers, &c, is assert
and one share of stock was trans
to George Howard, who became |
dent
is was in violation of the act, 'as
Mr.. Howard was well known not to be a |
resident of Georgetown.
Getting down to more recent events |
the bill cites the fact that revolt arose |
1FTngt he
rule, and the latter induced in May, |
1911, TO vote its stock for minority can
didateS approved by them "a majority |
OF five out of seven directors having pre- |
v:Ously pledged themselves not to sub |
NIT to Washington Gag domination, but |
t. act Independently. and Mr.. Howard |
was elininat ted for Robert Weaver. Then !
began the fight for the Washington Gas |
holdings of Georgetown stock.
Open rupture came in June. 1872, when |
the Washington company refused the |
right to vote it's stock: later, when the |
SIS share dividend was declared the |
Georgetown company refused TO pay the |
distribution on the Washington holdings |
1t is further set forth that while each |
shareholders of the Georgetown company |
is liable for his or her share of debt the |
Washington company was, and is utter |
~ incapable, in law. of assuming or be-
ing made liable for any of the debt or
utDlS Oh lne georgetown company, and |
has cast upon the holders of the $40 |
shares all responsibilities, that the
Georgetown company has no right to is
sue shares of its capital, freed from debt |
obligations, &c.
Plaintiff shows further that though this |
inCompatahility existed. over $4,000 in |
dividends was paid on the secretly held |
stock
Tried to Obtain Rights.
An important part of the information |
filed recalls the efforts made by John F. !
Mclean. then president OF the Washing
ton Gas Company, to have a bill passed !
in Congress authorizing the Washington /
Company to contract for. purchase, own,
and hold the whole or any part of the
stock of the Georgetown Company
The second attempt to have a similar
measure passed and its defeat is also
cited.
Attention is called to the fact that the
Georgetown stock. illegally owned by the
Washington Company" has been put ND
with the American Security and Trust
Company, as trustee of bond issue, and
the claim is made that this transfer to
the trust company is not sufficient to pass
the title of the $3.50 shares of stock to the
trust comprny.
The Washington Gas Company and the
American Security and Trust Company
are made defendants. II is asked that the
court decree that the Washington Com /,
pany has no right to the 1850 shares of |
Georgetown stock; is not entitled to divi-
dend: that the certificates be returned
and ordered Cancelled. and that plaintiff !
shall be instructed as to what 1t shall do
with the dividend and held in escrow and |,
with the $3.50 shares of stock. 1
Also for further relief, &c.
Two Cases.
Both the Hume and the GEORGETOWN
Gas cases are in court to stay.
II will be a battle to the finish and II |
might just as well be settled as to hang
ing fire week after week and month
after month.
If the Washington Gas Company holds
the $3.50 shares Illegally as claimed. |;
would it make the holding any more
legal if it should have purchased the
minority holdings at sI60 share? Do
two wrongs make a right?
That an egort was made to make a
sale of minority holdings to the Washing
ton Gas Company at s16o share is
known to have been a fact Why this
enormous price for stock in a company
that has not earned its dividend in the
last six months.
But II must be admitted that a counter +
offer was made of $50 a share for the !
holdings OF Georgetown Gas Illegally 4