The Bourbon news. [volume] (Paris, Ky.) 1895-19??, 1913-08-01


Elected to treat it Sas a debt due the
plaintiffs, that they therefore have no
interest in the Pr4Sperty or iunr' nor
authorized to be appointed where the
plaintiff claims the property or a lien
upon ION the property sought to be charged
''This contention involves several legal
questions which the court will not take
the time to consider, or determine, for
may be determined upon other grounds,
regardless of what conclusion the court
might reach upon that question.
No Cause Established.
Upon the hearing of the motion for
the appointment of the receiver there
was no evidence whatever which tended
the hands of the defendants, whether
Tobacco Co. or the property of the de-
PENDANTS, is in danger of being lost or
materially, or at all injured
Upon the hearing for the appointment
of a receiver, the evidence, without con-
troversy, shows thattthe Burley Tobacco
Society is corporation without capital
purpose of marketing the tobacco of all
growers who pooled their tobacco.
This company found itself unable to
properly receive store and sell the pooled
tobacco without capital, and it was
therefore concluded to form, in cOnnec-
ton with it, the Burley Tobacco Co,
and in the pledges of Tobacco to the
Burley Tobacco Society for the year
1909, the grower also agreed that ten
per cent of the sale price of his tobacco
was subscribed to the capital stock of
and directed the Burley Society to pay
this ten per cent out of the sales of the
tobacco
Money Raised BY Officers.
The Burley Tobacco Society did not
sell this tobacco until 1912, and hence
while ten per cent of the tobacco was
pledged to the Burley Tobacco Co., it
mad no cash in the way of capital with
which TO purchase warehouses, handle
and store this crop of tobacco
1T had been Incorporated, and under
a provision of its articles of incorpora-
ton, which will presently be considered
the defendants were acting as its board
Of directors Upon the faith of this ten
per cent of the tobacco pledged to the
and partly upon the credit given to in
diVldual members of the board of direc-
tors, they borrowed about a million dol
lars and with this fund purchased ware
tobacco and sold it in 1912
Two hundred thousand dollars of this
fund was procured upon the individual
credit of the defendants.
Assets and Liabilities.
'They also purchased a tobacco fac
tory In Louisville for $500, 900, and they
have either eleven or thirteen loose leaf
warehouses where sales of tobacco are
held.
There is no evidence introduced
which would indicate that the assets of
the Burnley Tobacco Co. consisting of it's
tobacco factory its storehouses, loose
of less value than $1,500.000. while there
is evidence to the effect that it's assets
may be worth nearly $4,000, 900, while it's
Indebtedness is $51S,OOO or less than a
third of it's assets.
In these investments there is no evil
dence of any unfair dealing, or even
ind
trary indicates the same attention and
care upon the part of the defendants
that would be given their own funds
The tobacco factory lost $4,000 year
before last and about $50, 900 last year.
but it appears that they have been un-
der heavy expense in introducing new
brands, and their expense upon that ac-
count amounted to about $4,000 last
year, and that although a trade of %. 600
or 10000 pounds per month has 50 far
been developed in one of the new brands
no credit as an asset has been given
upon the books of the company for this
development.
Larger Than Capital Stock.
According to the evidence introduced
the assets OF the company are not merely
much tn larger than its debts; but larger
than the capital stock paid in by the
defendants
An item of $4,000 expended in securing
signers to the ten-year pool of tobacco
is urged as an unwarranted expenditure
but it appears from the evidence that ali
ten-year pOoers We're to subscribe not
less than twenty per cent of their sales
TO the capital stock of the Burley Tobac-
co Co., and did do so.
The evidence, therefore, fails to sus-
tain the allegation that there is any
danger of loss or injury resulting to the
plaintiffs or to the Burley Tobacco Co
by reason of the continuation of its af-
fairs in the hands of the defendant until
the election to be held for the board of
''If you proceed upon the theory that
the defendants may be liable to the
plaintiffs for the full amount of the
capital stock of the Burley Tobacco Co.
and that the assets standing in the name
OF the company is property to which
they resort or upon which they have q
lien, the same result is reached.
Executive Board Responsible.
Not only does the evidence introduced
snow that these assets exceed the capt.
tai after deducting the Indebtedness, but
it also shows that the executive board
IN their individual right are worth about
$4,000, 900, and this executive board is
not more than sixth in number of the
defendants
1T is cQntended by the plaintiffs that
the defendants are not legal officers of
the Burley Tobacco Co., and that there
are no legal officers of the company, and
ceiver to take charge of the assets of
the company is authorized, and should
be made, regardless of whether the
plaintiffs are in danger of loss or in
jury by reason Of the failure to appoint
a receiver
1.-The facts disclosed. upon this ques-
ton are as follows: The governing
board or authority of the Burley To-
bacco Society is the District Board. 1t
is composed of member from each
county and is selected by the several
precinct representatives of the organiza-
ton in their respective counties, and
the precinct representatives are chosen
each year a pool is made by the growers
of tobacco in the respective precincts
Provision of Charter.
When the Burley. Tobacco Company
was incorporated it was provided in its
articles of Incorporation that the mem
bers of the District Board of the Burley
Tobacco Society should constitute the
Board of Directors of the Burley To-
bacco Company.
I'm accordance with this provision of
its articles of incorporation the defend
ants, who We're members of the Dis
ciety, proceeded to conduct the affairs
Of the Burley Tobacco Company, and
have managed and are still managing
it's affairs.
ION October Z, 1912, the plaintiff in
cfi ad in ho