Evening journal., 1921-02-15

the contract for the purchase Of the
steamers and plant. on August 2. he
requested Lofiand 10 go TO New
York, for the purpose OF making a
resale Of the Henlopen. and ne fur
ther admits that William c. Lonand
acted as his agent in the manage
ment OF the factory from August 10
until the date the property was
turned over to Lewes Oil and Chem
ical Company. and. in so doing.
was well within his rights to employ
Lohand as an individual in any ca
pacity he might require his services.
There is absolutely no evidence,
however. that Robert Pennington
ever combined with any one, or
took part in any concerted action for
the purpose OF acquiring these prop
critics
Rodney Defends Directors.
Richard S. Rodney, OF counsel for
the defendant directors, followed
Mr.. Davis, after the luncheon recess
He challenged Mr.. Ridgely's charge
that witnesses had been called to
show the services performed by the
directors. Such witnesses, he said.
could have been called by the com
plainant, but were not. He also con-
tended The issue OF 20 shsfes Of stock
70 each six directors was legal and
that the notes given for the stock
were valid. A bonus stock issued by
a solvent corporation was legal, said
Mr.. Rodney, and the only question
was that OF payment. There could
be no case, therefore, he added, ex-
J cept unless for fraud
The Chancellor, at this iuncture,
held that such issues Of stock could
not be made legally II the interests
OF the stockholders were not fully
protected
Continuing his argumnt, Mr.. Rod
, ney admitted Mr.. Ridgely's conten-
ton that there were two rules OF
principles OF law 10 be applied the
"very strict" and strict" under
which directors ran be compensated
for services. II was the business
rule. ne added, which he sought 10
q uphold.
The Chancellor questioned n there
/ was any evidence OF any contract
- under which the dirertors were en-
- ployed in services outside their usual
% duties.
Mr.. Rodney quoted three witnesses
81 IN support Of his contention that the
directors had done such extra worl
e as to justify them in receiving extr'
e compensation. lie reviewed tesii'
r mony TO show the directors had gon'
4 out on the boats and otherwise hat
n assisted in increasing the profits o.
A the company. IL was misleadlnS
, said Nir. Rodney. for counsel for tn
= complalnants 10 say only three di
rect0rs had given testimony.
Former Attorney-General Rein
hardt. also OF counsel for the de
7 fendant directors, followed Mr.. Rod
ney in emphasizing the services per
Il formed by the directors outside thei
n regular duties. He declared Buck
IL hammers work as a "etevedore" %
n one day resulted in a profit OF 800
g for the company. He also contrnde
Ie that the directors had sold stock ]
the company, Tor which tey Wer
l. entitled to compensation.
Is Here il was Mr.. Reinhardt referre
e 20 the smoking chimney and n
a. "nshinr excursion" In the bill
NJ complaint. Il is charged on In char
,s ter 3 mage 8. that on September 2
1914 these defendants wrongful
id appropriated si0JOO 10 themselve
~ sThat is utterly false exclaimed NJ
=, Reinhardt. who said the sum resi.
4. was the $500 each in stock voted
" the seven directors by tnemse We
u Mr. Reinhardt scored Receiver cans
for not "long since having retracte
this charge" =,
n n also was alleged continue NJ
We Relnhardt that the directors TOO
I'd divers other sums OF money
at divers times There was no test
OF mony. he maintained, to prove sue
ed an allegation.
OF referring 10 the sale OF the stean
by ers and company. Mr.. Reinhardt wa
he ed sarcastic toward Receiver cans
and his counsel. Mr.. Ridgely, ais
n attacking the charge that all me
or Attendants maid the United Stat
rr government $4,000 in Federal neon
N taxes thev didn't have 10 pay.
,n Mr.. Reinhardt declared such charg
- had caused deep anguish TO a
'a ao,used. "You can't expect he co
duct OF these gentlemen down me
in Lewes TO be as impeccaDle as VI
~ OF the directors OF the United otal
ne steel Corporation. They ran sho
ell M capital and in 1919 we're faced WI
'r- the necessity Of selling more sto'
OF Then the directors bought So
les stork themselves 10 keep the conce
If running and gave their own nol'
a They did all this to aid the compan,
m The notes, Mr Reinhardt went z
were given TO the treasurer or !
his company. and were put in the COZ
snt nanv's strong box. All salary pa
on ments were recorded in me books
,b- the company where any stocknolo
he might see them.
.ho "If these directors were trying
4, fool anybody, which they were NJ
then the recording OF such entries
the hooks was certainly me
ire clumsy way TO do #. Al no time
ms should be noted, did the directo
on have the stock control There W
ms not acsial fraud shown. The pan
be refused TO take the notes ana IN
in Law in the treasury Of the compai
lth that IS all"
rhe Here Mr.. Reinhardt questioned
led, n note was personal property, a
ice asked leave 10 submit special OF
To- giving decisions on the question
nal contend" he said. that n good nj
rht is good personal property
on - fair and impartial examinau
od- OF tho entire record in this acu