Evening journal., 1917-04-13


good business policy impelled the Com
pany TO set aside. over Sl5,OOO0O0 would
have been available for contingent liabil-
tiles sing under its contracts The ma
tcrals and supplies on hand, together
with the finished products wero valued
at over SQ.50O.O0O. As these items may
be assumed to have been in part at least
what was on hand for carrying out the
contracts, at their value at the plant,
and would have been ON hand at that
time if at that moment the war had
ceased, the Powder Company was pro-
tected not only by the advances upon
which IT, would not have TO encroach,
except upon the contingencies named in
its contracts, but it had the additional
protection of materials and supplies and
finished products at its disposal. The adj
vances were mquestionably used in part
at least, as working capital which. on
February 2s, 1915, amounted to S40,757.-
045.s2. and the Company would still
have had a large working capital If it
had paid for the stock out of that item
and II cannot, upon any reasonable
inference, be found that the purchase
would have impaired the capital stock
paid in
u is concluded, therefore, that the
company had ample power TO purchase
its own stock under its charter aud
under the corporation laws of New Jer-
sey and that it had ample assets on
hand out of which il could lawfully
have paid for the stock without depict
ing its paid in capital
The question whether the company
should purchase the stock offered in De-
cember, 1914, was pending before COM
mittee of the Board Of Directors having
full power and authority TO represent
and act for the corporation in the mat
ter.
Under the bylaws Of the Powder Com.
pany, it is provided in Article III, Sec
tion 3
1.-THE Finance Committee shall hav,
special and general charge and contro
of all financial affairs of the company
and such other matters as may be as
| signed to ~ from time to time by tn,
Board Of Directors.
During the intervals between The
meetings of the Board of Directors, tn,
Finance Committee shall possess am,
may exercise all the powers of The
/ Board OF Directors in the management
of the financial affairs of the company
and such other matters as may be as
signed 10 it from time TO time by tn
/ Board of Directors. in such manner o.
said committee shall deem to be best TO
the interests Of the company. I'M all case
IN which specific directions shall no
have been given 10y the Board of Direc
tors.
During the intervals between Tn
meetings of the Finance Committee. th
chairman thereof shall possess and ma
exercise such of the powers vested i'm In
Finance Committee as from time to tim
may be conferred upon him by resolr
p tion of the Board of Directors. or of Il
Finance Committee"
Therefore. when Pierre was instructC
to advise MI l. J.. Durham, attornc
for Mr.. T. Coleman du pont that II
Finance Committee did not feel iustih'
! in paying more than Sl25 per share f.
8 this stock az that time, and TO take Il
matter up further with II. Colem,
. du Pont. and that action was ratif
p and confirmed by the Board OF DrectC
on December Both, the corporate,
b., through the committee upon whom I
If power was conferred, had taken Il
position upon Coleman's offer:-lt h
d, not accepted or rejected the offer 4
e had placed the matter in the hands
r its chairman for further negotiation Il
l. on his part with Coleman. 1t hereup
I became his duty by virtue of the 81
f cial agency vested in him by the acti
$ of the Finance Committee TO take {
h matter up further with Coleman and
70 fully inform Coleman in accordan
b with the terms of his instructions al
r. necessarily to keep the Finance Comm
h tee informed of what was going on /
e tween himself and Coleman. The que
t ton before the Finance Committee W
n whether it should or should not acqu
l. the stock. Coleman had offered IL at a e
$ tain price and the action of the Finan
Committee cannot reasonably be ca
strued as other than making a count'
offer. With these instructions bcfo
him and this duty upon him, Pierre vi
= lated that duty by informing Dunha
according to his own statement, that I
{ offer had been rejected. but did not ri
j, Coleman the information at that til
! that the Finance Committee was wi
ing TO buy the stock at a lower pr
II than offered by him. He, however. Ike
. the matter open with Coleman throu
his correspondence until Coleman, u
!, knowing that there was any count
/. offer, instructed him 70 withdraw
offer with a view OF renewing it in
"A future.
His action, when the question was =
to him on February 10th and he infor
.o ed Alfred and William that the of
Il had been turned down ON Decent
! 23rd, and when they asked for the G.
40 respondence between him and Colem
n and he furnished them with correspol
y. ence upon another subject, and when
n attention was called to that fact by
IA fred on February 18th he still failed
mr. furnish the correspondence which v
~ wanted. cannot be reconciled with al
or thing but an intention on his part
conceal from them what had transpir
If This conclusion becomes irresistible wi
40 we find that on the following day, +
no ruary 18th, Coleman wrote the let
e. Offering to sell from 10000 to 49,
so shares of stock. The Finance Commit
be had not determined that it would P
or chase the stock, but this fact can m
in no difference in pierrc's duty TO fai
he fully represent the Company under
ev instructions from the Finance Commit
no in his dealings with Coleman and to mi
nv, full disclosure to the Finance Conn
Icr tee of what transpired between him
II Coleman. If he had with fidelity {
n. ried out his trust, had correctly repor
ia 10 Coleman the substance of his instr
.be tions from the Finance Committee
ire had fully and freely disclosed TO the
no nance Committee what had transpi
II between him and Coleman, and the
20 nance Committee or the Company
nv determined TO proceed no further, or
in determined not TO purchase Colem'
~. stock, his position of agency and II
.bo for the Company would have been at
|, nrd and hn mnnld have hnen free to