Every evening, Wilmington daily commercial., 1921-07-16
FIRST DECISION BY
NEW CHANCELLOR
Chancellor Wolcott Today Cave
Opinion in the Italian Star
Line Case.


> Josiah o. Wolcott today rendered
!, his first decision as Chancellor of
, Delaware.
! ON June rs, Wilbur l.. Adams. rep
resenting Pasquaie Guiia, chairman of
the stockholders protective commit
tee of the Italian Star Line. Inc, pre-
! sented petition TO Chancellor Charles
NJ Curtis alleging there had been no
election of directors of the company
since February. 1920 that the presi-
dent OF the company was under in
dictment by the United States District
Court of New York, charged with the
commission of crimes in the tran
saction and management of the busi-
ness of the company. and asking for
the appointment OF n master TO call
and hold an election for directors. The
petition stated there are about $500
stockholders, nearly all of whom are
Italians. that the company had I'm
April, 1920 bought from the United
states shipping Board the steamer
Liberty Land, and was operating the
vessel between the United States and
Italy; that the steamer was bought
on the deferred payment plan. the
purchase price being in excess Of ST.
500 900 and ten per cent paid. Be
cause Of unpaid installments the
shipping Board had receiver ap.
pointed by the United States Court Of
New York. who is operating the yes
sci. The petitioner stated that under
regulations recently adopted hy the
board he believed II would be possible
to make A satisfactory agreement and
| save the assets of the corporation. In
order to do this, a large number Of
| stockholders had agreed 10 pay an as
| sessment and take additional stock in
amounts sufficient to finance the
operation.
On the petition, Chancellor Curtis
appointed Victor Barslty master to
hold an election. and he had given
notice by publication. etc. that ne
would hold an election on Saturday.
July %, in the city Of New York. On
July II. Sylvester y. Townsend. Jr..
md Aaron Finger repre- scnting r.
Paul Yasseli president of the rcrpo-
alton 10 the Chancellor pc
titlon denying allegations Of fraud.
and requesting that an order appoint
ing the master be held M and the df-
rectors be given opportunity to call
| an election and the matter was ar
gued July i2
Chancellor wolcott today handed
down an opinion In which ne said the
/ former Chancellor evidently thought
| that the facts as presented to him
justified immediate issuance of his
/ order IN the ex-parte application and
without notice. and added.
u shall not review the special cir /
cimstances alleged IN the original petit /
ton. ! arm not so much concerned
with them as I am with The fact that
tho former Chancellor deemed them
sufficient force 10 employ the aid ~
"a master in tho first instance without i
attempting to employ the ag sucv Of i
the old directors and without prior 4
notice 70 tho corporation OF the 4
directors
Under paragraph 1945. Of the Code 4
of 1915. providing where an election H
Is not held on the day provided b. the Il
bylaws the directors may call an
election on = day thereafter conven- 4
iently as soon maybe. the Chancellor
may summarily order an election 10 4
be held on the application OF any /
stockholder and punish the directors i
for contempt of court for failure to i
obey the order The Cha anceIIor Il
said:
Is IL true that under the section
the remedy must first be sought 4
through the old directors. who them
selves are the persons in default2 / II
think not. There are many instances
that may be thought of which would
defeat the summary remedy provided
for by that section If il were neces-
sary in every case TO seek relief
through the old directors before resort
ing to any other agency. II is not
necessary for me 10 catalogue such
circumstances. Each case must rest
on its own facts. Rule 80 of the Court
recognizes the diversity OF situations
which may exist in various cases. and
accordingly is so framed as to leave
in the discretion OF the Court the
question whether an order shall 90 10
the directors first before resorting 10
master or ignoring the directors TO
master Immediately.
Reason suggests the desirability Of
this rule, and / find nothing in the
statutes forbidding IT,
lie also said: But it is contended
that there is an implication that the
directors are meant by the statutes
to be the ones to hold the election
This contention, understand to be
founded on the provision that the
Chancellor may punish the directors
for contempt of court for failure to
obey the order The presence OF this
language does not conelusively argue
that the direcssrs must be the indi-
viduals sought by the court as agents
10 call a stockholders meeting for the
manifest reason that there may be
case where directors could be in cor ,
tempt of court, even though the order !
did not run tc them. For instance !
there could be supposed that the court +,
appointed a master 10 bold a meeting
of stockholders. For him n hold such ,
meeting, il would be necessary 10 oh
tain access TO the stock ledgers to as .
certain the stockholders TO whom ]
he should send notice. II the direc-
Tors in any wise obstructed the master. !;
then case could be presented where
the directors. even though they were
not the persons on whom the order
vas made, might he held-i IN contempt"
The original order in this matter
was permissible under rule 192. The 9
rule itself IS an aid OF and not in y
conflict with the code, and the chan
eellor. in the proper exercise of his
discretion. and authority to issue such !
an order L shall, not review the ex-
arcise Of his discretion. even il I were Z
disposed to do 50. The fact that the
master has fixed the date for a meet
ng OF the stockholders on July 2S
md has incurred some qxnangn vr,,,Ia / y