Evening journal., 1917-11-08
Pierre S. DUPONT
ASKS DISMISSAL
OF STOCK SUIT
CONTINUED From First Pagc.)

resents.
"i. That after full consideration OF
the pleadings and OF the testimony Ia |
! the cause the court filed an opinion |
under date Of April i2 1917, In which |
the court decided that the question as !
TO whether the p. /. dupont de Ne |
mours and Company should acquire |
the stock that was purchased from T. |
Coleman dupont by Pierre S. dupont |
and his associates, should be submitted |
TO a stockholders meeting to be called |
for that purpose. the language OF the !
opinion on that point being as follows |
"'There never has been, however, any
corporate action determining whether
or not the company should purchase
the stock II such action had been
taken the remedy afforded to the plain
tiffs would properly be a decree de-
claring il TO be the duty Of the de-
PENDANTS to assign and transfer the
stock to the r. I. DUPONT de NemOurs
and Company upon reimbursement Of
the cost Of acquiring II and an ac-
counting for dividends received there
on, or in case it should be found that
the stock could not for any reason be
transferred TO the e. l. dupont de Ne
mOurs and Company, an accounting for
the difference between the cost and the
fair market value Of the stock, together
with the dividends received thereon.
The question whether the company
should or should not acquire the stock, or
any part thereof, not having been deter
mined by the company, that question
OF business policy Is not one for the
determination Of the court. The court
cannot place ITSELF in the position OF the
corporation ana determine that the
company should take advantage of the
opportunity TO purchase the stock as
10 has a right to do, but It is stil a
question which Is open TO the company
for its decision, Notwithstanding that 1t
is a foregone conclusion that its ac-
lquisitiOn would be Of enormous profit
to the company. The question must,
therefore, be determined by the COM
Ipany itself II IL were referred to the
board of directors, that board is dis
abled for the purpose OF passing upon
the question, as the majority Of the di-
rectors are disqualified by interest to
act upon the matter. The board, there
fore, could not summon a qualified
quorum. The only course remaining,
therefore, is to put the question before
the stockholders Of the r. l. dupont de
\ Nemours and Company for their de-
cision at a meeting called for that pur-
pose TO be conducted under the super
vision Of a special master after due
notice thereof and notice of the decree
in this cause. the holders Of the stock
acquired from T. Coleman dupont or
the proceeds in stock Of h. /. dupont de
Nemours and Company thereof to be
Ienloined from voting said stock
"2. Your Honorable Court found
the following conclusion Of law, which
was presented as conclusion Of Law
No. 20 on behalf Of the defendants.
"'(2O) The Government Of the cor
poration and its control are lodged in
the stockholders and the Board Of Di-
rectors which they elect, and no court
Of equity has the power to substitute
b. Us Judgment for the lawfully exercised
r Judgment of the Board Of Directors {;
e and no court Of equity has the right
TO coerce a Board Of Directors and
/ stockholders and commit them to a
e purchase which, in the free exercise
of their Judgment, they have rejected.
-. That in a supplemental opinion
filed by your Honorable Court 10 was
reiterated and emphasized that the
4 question Of the acquisition Of the r.
Coleman dupont stock by the com
pany would have TO be submitted TO
stockholders meeting called for that
purpose. The following language ap-
pears i'm the supplemental opinion Of
your Honorable Court:
"'As stated in the findings from the
evidence produced at the trial the re-
2 .ceipts in dividends, exclusive OF the
i2662S shares of stock Of E. J. dupont
de Nemours and Company. were equiv
alent 90 1888 ptr share upon stock
for which Pierre and his associates
b. paid 5000 per share. AS the record
then stood, therefore, II the company
acquired the stock It would have been
, obliged to pay out Of its treasury SIT
. per share TO make up the price Of 5000
; per share paid for the common stock.
! I'm view OF the present showing that
= the defendants have received over
S5,O0,C00 in excess Of what the stock
!. cost counsel for the plaintiffs contend
Z that there remains no question OF busi-
~ ness policy to be determined. and
therefore a decree directing the trans
fer Of the stock and the payment OF
the differences should be entered with
v out any action OF the corporation or
n stockholders because the stockholders
n could have no honest difference OF
opinion as TO The benefits to be derived
e by the company from the purchase OF
II the stock. am not prepared to adopt
= this view.
l. NO principle Of law or equity
Is heretofore announced has gone so far
as TO assert that a court Of equity MAY
= substitute its judgment for that OF
4, the corporation through It's directors
- or stockholders in determining whether
it should or should not acquire an as
y, set to which IL has no title but merely
y an inchoate right to assert a title. In
~ all Of the numerous cases cited by the
~ plaintiffs. the decisions holding that
:, action by stockholders contrary to tho
q interests Of the corporation at a cor
"A porate meeting would not be upheld
because it would be a fraud by the
) majority upon the minority involved
4 substantially the questions whether
d the corporation would rescind a con-
tract parting with some Of its assets
r. or would ratify tho transfer Of its as
{, sets where the transaction in relation
TO the assets was clearly an injury
n to the company and in violation OF its
II rights. 10 should be borne in mind that
/. the rights Of the company in the
n present case arises out Of pending ne
e gotiations for purchase Of its OWL
!. sfeck. the amount Of stock to be pur-