Evening journal., 1918-03-20
Pierre S. C Pont and His Associates Win Big Stock Suit

the corporation. ne had misapproprl-
ated an asset Of the company 20 which .
he was accountable TO the corporation,
as In the case OF Cook vs.. Decks, re-
lied upon by counsel for the complain /
ants and reported In the Law Reports, .
Appeal Cases, Part 3, April 4, 1916 .
PAGE sol.
Omcers approprlating an asset IN
equity belonging 10 the company-in .
that case a contract for The sort OF
work in which the corporation was ac-
tually engaged and for the performance
Of which u had been Incorporated
could not through their control of
the majority OF ihe stock at a meeting
called by themselves for that purpose
validly use their voting power TO vest
70 In themselves. There was no Ques-
tion OF business policy TO be determined
by the corporation In that case Where,
as In the present case, a question OF
husinefa policy is 90 be determined by
the PROPER corporate authority. the
court cannot deprive one who Is in
terested adversely Go the alleged I'M
terests OF the corporation and other
stockholders from exercising HE right
10 vote his stock. Neither can the court
because Of he power 90 prevent a ma
iority dcpriving the minority OF It's
rights 90 The benefit OF a profitable as
set. which I'M equity belongs TO the cor
poratlon. usurp the power belonging 10
the individual stockholders by forcine
upon the corporation ITS decisions IN n
question OF corporate management be
cause that question Of corporate man
agement IS coupled with the misuse OF
! nduciary relation In the same trans
action. In March. 1915 Pierre s. du-
pont and his associates as stockholders
would have had an equal right with the
Fcomplainants 20 vote IN determining as
a matter Of corporate policy at a stock
! holders meeting duly called upon iull
notice 10 an the stockholders OF all The
facts In relation 90 the transaction
whether the company should purchasr
Coleman duPonts holdings or stock
The distinction between the situation
as it then existed and as II new exists
is that al that time, although the pur
chase had been consummated, one OF
the questions Of policy 90 be deter
mined would have been whether th'
company should pay money out OF lt'
treasury 20 acquire the benefits or
Transaction which while % then had al
the appearance OF being q profitable
one. sim had an element OF uncertainty
In the future value OF the stock; Othel
questions Of business policy present a
that time and siill remaining open nav
been discussed. The rights Of the dc
PENDANTS as stockholders are no less nov
because Of the circumstances that tn
transaction has ripened into a prohlaDl
one.
/ The question OF influence eNerie
, upon other stockholders through 90
! domination and control of the dalen
, dauis TO vote against Che resolution
and the question Of The effect upo
I. stockholders Of the letter sent To thci
. hv Nessrs. Barksdale. Haskell and PA
\ terson would involve an' inquiry p
the court into the motives which aclt
. aied each stockholder In dep0siung o.
: vote which Il Is beyond the power
:, policv OF the courts 20 pursue. Ever
% siockholder was fully Informed OF u
y, decree OF the court by the special mo
- ter and OF the questions involved.
A. had a right 20 give his proxy TO whol
,o soever ne desired and his motives
~ voting can no more be inquired ir
be now than they could prior 10 the sio'
he holders meeting 10 must be assum
80 that every siockholder was reasonal
IA capable of dccidlns questions Of bu
Is, ness policy for himself and u the COZ
5o could not have determined that
ri him In advance % cannot determine
~ for him now. Assuming, without
Of nnding. that the letter Of Mess
le Barksdale Haskell and Patterson
g. volved an improper use OF the opini
al md decree Of the court for which Z
. 90 q
he while the court might lave proven,
pr such improper use By the defendan
,e as in the case OF ROllmM Mfg. Co.
sd Universal Hardware Woi ks. 23S II
56s. the c0mplainanls DO fun oppc
ly tunily to bring the amatl r. Go me
e. tention Of the court priO. 90 tnc met
,k ing. No having done so they cam
.n now set up that act as 4 ground I
ld setting aside The action oi me stoc
ed holders at the meeting. F.r al that a
n pears In the petition. the facts We
IA as fully known 20 them 1t that tii
.i rs at the present.
M Il Is not necessary 20 d tide whcit
w. the holders Of the bonus 1ck were
.ol utled 10 vote that stock. IS the det'
H. minatlon Of that question would
.o- AFFECT the result Of the ballot at
l,. stockholders meeting.
-, In accordance with the foregoi
'r, views. IL IS concluded Oh 10 the eco
an ulaints' petition OF Noveu Der ii. is
does not set mp any suffic ent erour
..r Tor setting aside the int"r ocutory
~ cree nor for entering a decree IN ia'
~ OF The cOmplaInants.
The question raised by the compla
~, ants exceptions io the report of
h,. special Master. excepting ile isL 50
ilh and i2ih exceptions, are fully c
. !. ered hy the conclusions reached O.
I. ccrning The matters set oui 10 me co
IN claimants petition.
f,h The first exception 20 Tue mast
.r, report must hc dismissed, as the spe'
~, master was aciing under the author
of the intcrlocuiory decree, and
there was error in ordcrins the $40
3H holders meeting, % was not the er
'' of The master. The conclusions
tuc master in relation io tle votes
'nH joy various lducIarics. io which
n' iUlh. 18th and 18Th exceptions ap.
uil have been carefully examined.
Shi special masters conclusions are. m
ms opinion of the court correct,
lsi, An order will be entered vacatins
)m- order Of December ti, 1917, upon
de- defendants requiring them 10 ans
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