Newark evening star and Newark advertiser. [volume] (Newark, N.J.) 1909-1916, 1914-07-15
HAVEN LOSES OUT
| IN ACTION AGAINST
CH|LDS CONCERN
Matchmaker Howell Dis
misses Suit Against Res
taurant Corporation.

y Nice-Chal -ellor Howell has handed
down a decision dismissing the suit of
Edwin H Haven, OF Montclair, against
the childs Company, operating the
Chiids restaurants, and Samuel S.
Ghilds and William Childs. who we're
the first to devise the Childs restau-
rant plan.
Inc complainant, who, with his wife,
owns fifty shares of the preferred
stock and one hundred shares of the
common stock, brought the suit to
compel the two Childs brothers to
turn back to the treasury of the COM
pany a large mart Of the stock held BY
them. for g collation.. unless they
chose to pay for it. Mr.. Haven, who
was represented by E. Q. Keasbey,
former Judge Gilbert Collins and w.
r.. Osborne, OF the New York bar, con-
tended that the stock held by the
Childs brothers was given to them
without valid consideration and with
cut proper authority The Childs
brothers were represented by John r.
Hardin.
It was shown in the evidence taken
before the vice chancellor that when
the Childs brothers first extended
their business, in May. 1900, several
subscribers to the stock of the COM
pany agreed with Samuel S. and Will
lam Childs to organize a company
with capital of not less than $1,000
900, divided into S250,000 preferred
stock and $4,000 common, with
shares of the par value of 500 each.
Arrangements were perfected for the
taking over of restaurant at 1908
chestnut street. Philadelphia. The
subscribers agreed that the Childs
brothers should receive from the
company the actual cost of the equip
ment of the premises in shares of the
preferred stock at par. In addition. it
was agreed that the two men should
receive from the company for the pur-
chase of the lease of the property and
for their management three shares of
the common stock of the company for
every share of preferred stock given
to them in payment for the equipment
of the restaurant
Haven Signed Agreement
The vice-chancellor points out that
MI Haven was one of the signers of
S this agreement, who subscribed to
5000 worth of the preferred stock at
the time He later assented again to
this arrangement by subscribing for
second $4,000 worth of preferred stock
Again he bought ten shares- of the
preferred stock from Samuel S.,Childs.
Tor every share of preferred stock so
subscribed for by Haven, the Childs
brothers agreed that he should receive
one share of the common stock as a
bonus. This, 1t appeared the Childs
brothers gave from their bonus stock
Finally, Mr.. Haven, the vice-chan-
cellor points out, became the owner of
stock of the company, the par value
of which is $4,000, and for which the
company received but $4,000.
In his conclusions, the vice. chancel-
1or says;
1T appearsY at the very outset of
the case there is a question as to the
complainant.s>capac to bring this
suit. Assuming that the common
stock was issued without considera-
ton, are the compliments in such
plain of the delinquency of their
ow-stockholders? 1t is perfectly
clear from the testimony, and 1t Is
admitted on all hands, that only
money which the company received
upon the issue for any of its stock
was the money which it received at
par on the subscriptions to the pre-
ferred stock, and, indeed, 1t Is as
serted by both the compliments and
iilt QcIcHudulS that the common
stock. at least so far as 1t was issued
on account of the first Philadelphia
restaurant was issued without con-
sideration moving to the company.
Company Going Concern.
The corporation is a going concern;
is prosperous: the state is not a
party; no rights of creditors have SUI
pervened, and the company was and
is managing it's financial affairs, as
far as the evidence shows, to the
satisfaction Of all concerned. Now
what equity has one stockholder
against another? The complainants
do not even offer to pay assessments
on their own stock. II the defend
ants are obliged to pay for the stock
issued to them the compliments have
them at great disadvantage in the
distribution Of the dividends. and this
they do not propose IN any manner to
equalize
I'm my opinion, therefore, the COM
plainants' case is wholly without
merit, and will advise a decree dis
missing the bill, with costs"