Evening journal., 1921-07-16
COMPANY MUST
Hold ELECTION
Chancellor Wolcott Up
holds Predecessor In
Steamship Case
QUOTES LAW THAT
GIVES AUTHORITY

ion since assurning the chancellor
ship. The opis ion refuses the petit
non of E. Paul Yasseni. president
OF the Italian $ ar Line. Inc. for a
modification Of an order appointing
a master to hold an election OF di-
rectors OF the line. The petition
was dismissed with the costs on the
petitioner who was represented by
Sylvester d. Townsend. Jr., and
Aaron Finger.
Wilbur L. Adams, representing
Pasquale Gullal chairman OF the
stockholders protective committee
Of the Italian Star Line, presented
petition to Chailcellor Curtis on June
Is. alleging that there had been no
election OF directors of the company
since February. 1920; that the presl-
dent OF the company was under in
dictment Of tho United States District
Court OF New York on charges Of
commission tf crimes in the trans
action and infringement OF the com
pany's business. The petition of Mr..
Adams asked for the appointment
of a master % cali and hold an cleo
ton Of directors.
It was setl forth IN the petition
that there ar,e about $500 stockhold-
ers Of the company, nearly all OF
whom are italians; that the cor
poration had, In April. 1920, bought
from the United States Shipping
Board the steamer Liberty Land. ="
and was operating It between this
country ard Italy; that the boat
was purchased on the deferred pay
ment plan for a sum in excess OF
one and half million dollars, 10
per cent Of which was paid down.
It is alleged that, because OF the
unpaid fnstRllments. the Shipping
Board had a receiver appointed for
the company in the United States
District Court of New York; that
the receiver is now operating the
vessels; that under the regulations
recently adopted by the Shipping
Board, the petitioner believed that it
would ibe possible to make satis-
factory agreement and save the as
Gets OF the company; that. in order
TO do this. large number OF stock
holders had agreed TO pay an as
sessment and to take additional
stock sufficient to finance the trans
action.
On the petition. Chancellor Curtis
appointed Victor BarslSy as master to
hold an election OF directors. Mr..
BarslJy had given notice by publica-
ton and directly to stockholders
that the election would be held in
New York on Saturday, July 2s.
On July IL. Mr.. Townsend and
Mr.. Finger. representing Mr. Yas-
SELL. president Of the boat line. pre-
sented a petition to Chancellor VOL
colt denying the allegations OF fraut
and requesting that the order ap.
pointing a master be held up and
the directors given an opportunit,
- call the election. This petition
WAS argued before Chancellor VOL
cott on July ~ and this morning
the chancellor handed down his
opinion.
In the opinion, the Chancellor saws
the former Chancellor from the facts
as presented before him justified the
Immediate issuance OF his order on
The cx-parte application and without
notice He further states:
Il shall not review the special cir
cumstances alleged in the original
petition. l am not so much con-
cerned with them as am with the
fact that the former Chancellor
deemed them of sufficient force e
move him to employ the aid OF a
maser in the FIRST instant without
attempting 10 employ the agency OF
the old directors and without prior
notice to the corporation or it's di.
rectors."
Under paragraph 1s45 OF the Cod,
of 1915. it is provided that where al
election is not held on the day de
signated by the bylaws or to bl
held as soon thereafter as conven
iently may be. the Chancellor ma,
summarily order an election be hel,
on application Of any stockholde
and may punish the directors 70
contempt Of court for failure to ODE,
the order.
The Chancellor states:
rs il true that under this sectioi
the remedy must first be sough
through the old directors. who them
selves are persons In default?
think not. There are many circum
stances that may be thought o
which would defeat the summar
remedy provided for by that section
if it we're necessary in every case L
seek relief through the old direc
tors before resorting 10 any othe
agency. 1t Is not necessary for m
10 catalogue such circumstance
Each case must rest on its own facts
Rule 10 Of this court recognizes tn
diversity OF situations which may ex
ist in various cases. and accordingl,
is so framed as to leave It in the dis
erection Of the court the question
whether an order shall 60 to the di
rectore first. before resorting to
master or ignoring the directors I,
master Immediately Reason sug
gests the desirability Of this rule. ans
find nothing In the statute forbid
ding it.
But II is contended." the chan.
cellor proceeds. that there Is an i'm.
plicauon that the directors nr,
meant by the statute 10 be the onel
10 hold the election. This conten,
ton ] understand to be founded OF
the provision that the Chancellor
may punish the directors for con
tempt of court for failure to ODE,
the order.
"The presence OF this languag
does not conclusively argue that tn
directors must be the individual
first sought by the court as agents I
call a stockholders meeting for tn
manifest reason that there may be