Every evening, Wilmington daily commercial., 1921-05-07
RECEIVER WINS IN
SUIT ON BEHALF OF
FISHERIES COMPANY
Continued from page /.

part OF the officers ana difeetois VI th'
company, and In that suit Joseph -
Cahnll was appointed receiver OF the
I.ewea Fisheries Co. with instructions
to investigate the affairs OF the COM
pany and the conduct Of It's officers and
directors, and take such action as was
necessary to protect the interests oi
the stockholders. Az n result sol his
investigation the bin In this suit was
filled against the officers and directors
of the company and Robert Pennington,
purchaser of the property. and Lees OH
and Chemical Co. the present owner
thereof TO recover money alleged To he
due the company from the directors, ns
well al moneys and the property alleged
TO belong to that company from Robert
Pennington and Isewes oil and Chemical
Co.
The questions involved I'm the case. and
the order In which they were considered
10y the Chancellor. are as follows.
what Was Alleged.
/. Taking of fifteen shares of stock
| by each director. ON September Is,
! 1911. fifteen shares OF stock of the Bewes
| Fisheries Company were issued as full
J paid and nom -assessakie 10 each di-
rector, Lofland. Lauk. Joseph. Baylis.
| Bookhammer. Thompson. and David w.
/ Burbage. and September 81. 1911. "A res
| olution was adopted by the Board OF
Directors. that the directors lie voted
| fifteen shares of stock each for services
| in organizing the company and com-
missions for selling the stock David
! w. Burhage is not party TO this suit.
and retired as director OF the Company
in August 1919. The other six directors
served until 1916. when William II. Tun-
| nell. une of the defendants In this suit,
was elected a director. and these seven
persons served as~slirectors from that
time until dissolution Of the company
In October 1917.
At tho hearing the three directors who
testified in the case Brookhamuer.
Iank and Baylis. undertook 10 enlarge
the meaning of the word organization
(which. according to the Chancellor 8
opinion. in ordinarily limited t. the
formal acts taken by incorporatnra ta
start the legal entity 40 that Il can
transact husiness1 so as to. include scr
vices In securing a lease uf land. mai
ing plans and specifications for the
factory: supervising construction oi
the factory. making visits e. Milford e
urge speed in the construction Of baa y
for the company. and other matters
deemed 20 be- unconnected with the or.
ganization Of the company. These
! three defendants testified as 10 saiei
! Of stock by them and the other directors
! az well as hy a broker IN Philadelphia
/. but were unable 10 specify with any de
gree Of accurpteneas the amounts arr
persons 10 whom sales were made L0f
land. Hookhammer and Thompson ant
? Rurbsge were the parsons named II
: the certificate Of Incorporation of tn
Lcwez Fisheries Company as It's ineor
] pora tors. and fifteen aharee Of stool
I were voted 10 each Of the seven III
rectora.
Not Allowed Compensation.
Tho Chancellor held that directors .
a company arc presumed 70 Herve with
| out compensation. unless specincail1
authorized By ita charter or bylaws am
that courts will closely acrutinlze Husl
| claims and thst all of these service
! were rendered Immediately after incor
puration of the Lewes Fisheries Go. an
| At a time when such services we're tn
6 | natural and necessary duties Of thos
| who were managers Of the company {
r property start IL off. The issuance o
, | these fifteen shares OF stock 10 each di
rector was therefore declared invali
I and Illegal. and the six defendant di
. rectors who received this stock viii b
4 required 70 make reparation therefor a
n hereinafter stated.
5 . Payments TO the directors for ser
. vices. or salaries. Lofiand. Iank. JOSEPH
i Book hammer. Baylis and Thompson
9 were also charged with having vote
70 themselves 81 900 for services ren
Il dered the company in each OF the year
:; 1912 to 1917. and Il was not denied tha
!; credit therefor on notes given by ther
u for stock Of the Company. Tunnel
= who served as director In 1915 and 1871
also received 81 900 for his services dur
|, ing each Of those years. II was elaine
a. however, that the services rendered b
= the directors were Of a character on
= side the usual duties performed by an
= ordinarily required Of directors OF
corporation, and consisted in securin
= extra labor when needed: assisting
:. repairing machinery; shovelling or slit
/ ing fish; rescuing a stranded vess
- that had gone ashore: and endorsif
notes of the company in order to secu
N funds 10 properly finance II.
ls These payments were not authorize
90 bv the Charter and bylaws of Il
n Company. and the stockholders we
K not informed that the directors We
al receiving compensation for their Sc
TX | vices The testimony showed that
4 | fact some of the stockholders were !
formed By at least one of the directo
- that they were not TO receive. or. h
~ not received. compensa ton. The pre-
II ident. who was also general manag
Il of the company and treasurer we
Il authorized to- and did receive salari
Il The testimony showed that none of I
+ directors performed all of the serviC
Il above stated; that some performed
II few of these services, and others mor
but all of the directors received
Il same compensation for their services
In 1912 this compensation 10 the
II rectors was charged against operati
/, expenses OF the boats and factory
i equal proportions. but in other years
II was charged in one lump sum as i
rectors' salaries" and credited on
count of the notes given by the direct'
for stock or paid In cash. but no
Il port of such action was made to
II stockholders. and in two years, L
and 1915. they received compensat
II without authority of a resolution Of
board of directors.
II The Chancellor held that direct
may be allowed compensation for s
vices to the Company, which are clea
II and Enthusiastically outside the scope
their duties. and may enforce paym