Evening journal., 1917-04-13

the Company had in the matter, or what
( its opportunity to purchase had been.
No such disclosure was made TO the
/ Board. Although the Board was inform
ed that Pierre and five other directors
had an interest in the stock the fact .
that three others were also interested /
was not disclosed With nine directors /
having an interest antagonistic TO the /
corporation aud voting. it was therefore |
a certainty that a resolution TO buy the
stock could not pass, even if all the rest
had been in favor of IL. because the Board
at that time consisted of twenty MEM
bers and IL required a majority vote of
those in Office TO pass the motion. The
subsequent resolutions at the stockhold-
ers' meeting, as has been shown, were
passed by proxy votes given for election
of directors. While the proxy votes were
given for the election Of n Board friend
" TO Pierre and his associates and re-
commended by them, this cannot be con-
strued as an endorsement of all that
Pierre and his associates had done and
of the prior action of the Board because
of a further failure to fully diclose TO
the stockholders the circumstances under
which the stock had been purchased.
Moreover, the stockholders receiving the
communication were informed that the
subscribers to the letter owned In per
son or represented by proxy over 30 per
cent. of the total voting stock of r. l.
DUPONT de Nemours & Company and
were not informed that the stock in con
troversy was included in that 55 per
cent. Under the facts. therefore, what
was done at these meetings cannot have
, any force and effect as valid action on
the part of the Board of Directors, or
the stockholders at these meetings.
The duties Of director or other Of
iicer of a corporation In transactions
where he is representing his company
are governed by we'll established and ia
= milar rules Of equity. A director of
4 corporation may freely purchase its
!, stock. and occupies no relation of trust
TO an individual stakeholder which
n prohibits his using whatever advantage
his position may afford him through
q knowledge Of its business and condition
. superior TO that of the stakeholder with
u whom he deals lie is not accountable
- othe stakeholder for Withholding infor.
= nation from him which affects the value
~ of the stock, but 10 the corporation, the
whole body of stockholders, he stand.
p, in a fduciarv relation which require.
a him 20 exercise the utmost good faitl
~ n managing the business affairs of th,
!. company wit ha view TO promote not his
\ own interests. but the common inter
= csts. and he cannot directly or indirectly
derive any personal benefit or advantage
IN by reason of his position distinct from
II the co-shareholdcrs. BY assuming thl
y. office, he undertakes TO give his bes
~ Judgment IN the interest of the corpor
M alton in all matters in which he is act
n, ing for it ntrammeled by hostile inter
hc est in himself or others. II he act
for himself in matters where his inter
-, est conflicts with his duty the law hold
~. the transaction constructively fraudu
NJ lent and vodablc az the election of Oh
~ corporation. lie is disqualified by th
w. Intervention of a personal interest TO az
", in the performance of his duties
nv nv trustee for the company and is not pc
an mittod TO obtain title TO property whe
w. he has any duty to perform which
We inconsistent with the character OF pu
~ chaser on his own account. When a
~ rector attempts in violation of his du
To acquire interests adverse TO the CO
laa poration in respect 20 any matter j
'us volved in the confidence which has be-
VI reposed in him, az TO which equity in
'P poses a disability upon him 70 deal
ION his own behalf the court will hold hi
pa as q trustee for the corporation, and
ION must account for the profits viii,
me otherwise would have accrued to Il
10 corporation.
zee The proaucr of the transaction will b
no long to the corporation exclusively. Il
~ law viii presume that whatever WI
Dc done in furtherance of the origin
es- scheme. under which the agency was CT
a. ated, was done under and through q
he agency. The burden Of showing that q
el relation was changed before or during Il
zee agency rests upon the party so affirm
~ ing.
eI- It is asserted by counsel for the d
Io PENDANTS that when Coleman withdre
~ his offer, the duty on Pierre's part
~ acting for the Company was at an 81
.ne and he was then free TO act for his ind
w vidual interests. IL must be assum
m, that Coleman's conclusion to withdra
~ the offer qualified as IL was, by su
~. gestion of renewing IL in the future W
IN affected by Pierre's breach of the iid
~ ity he owed TO the Company in misi
NV forming and misleading Coleman as
~. the real action OF the Finance Commits
~ And it is shown that Pierre, while
'"' duty rested upon him of negotiate
,,,t solely in the Company's interests,
-, itiated by suggestion to Coleman
W. plan for financing of the transact
- otherwise than by a sale to the Co
~ pany. The Finance Committee was
,a favor of purchasing the stock but III
10 fact and the reasons for not buying il
~ Sl6O had not been stated TO Coleman,
AZ though it was rapidly rising in val
- and Coleman knowing this was kept
- Pierre in ignorance of facts VIII
no, Pierre should have disclosed to him.
- in whom confidence was reposed of fai
rod fully representing the Company in
non transaction, cannot, after betraying
~ trust through suppression of the fa
80 and through abandonment of his prin
ooo pal by suggestion of a sale through
Zoo outside financing, now take advanta
~ Of his own wrong and successfully ella
'ol,e that the resulting withdrawal of
;tb, offer, thus brought about and conceal
~ from his principal until the trial of {
ttee cause, relieves him of any further
- sponsibilty and put him in positi
80 TO thereafter deal for himself.
a,d There never has been, however, a
co. corporate action determining whether
rted not the Company should purchase
rrc stock. If such action had been tax
and the remedy afforded TO the plant
~. would properly be a decree declaring
irod 70 be the duty Of the defendants
NJ. assign and transfer the stock to the
had T. dupont de Nemours & Company M
had endorsement of the cost of acquir
ans it and an accounting for dividends
rust seived thereon, or in case it should
an ound that the stock could not for
act J reason be transferred TO the T.. /. dup