Year: 1875

COMMON AND PREFERRED QUICKSILVER


STOCKS.


TIL. RIGHT or THR QUICKSILVER MINING COMPANY


TO CONVERT COMMON INTO PREFERRED STOCK


DOUBTFUL


Judge Daniels, sitting in Supreme Court,
Chambers has decided to contnue the injunction in the
suit OF Kent against The Quicksilver Mining Company
and Others restraining the issue Of new preferred
stock 1857 the present Company was formed. and
the property Of the older Pennsylvania Quicksilver Com
paoy transferred It, the stockholders TO receive
stock In the Company share for share The STOCK
. fixed at 100000 shares Of 500 each.


Mr. Rest in his complaint that In the Winter or
1862 20, the Company insoven and 1t was DOUBT
fuI whether the receipts would be sufficient to meet
even ITS working expenses and that to raise money IL
adopted the plan OF allowing each holder Of common
stock 10 convert preferred stock by paving S
share during the time directors should keep the
books open for that purpose The preferred stock was
10 receive seven per cent before the common stock and
OF the balance OF earnings receive the the
mon stock. On April Is 1S70 the books we're closed
s1sis shares Of the stock having been
verted into preferred and s2456 having been paid in
oIthis preferred stock the plaintiff has bought $500
shares and 200 shares OF the common stock. No div
aend has been paid either, but plaintiff charges that
there is now s70O,Ooo applicable to interest on
the preferred stock aud dividends, aud deiend-
ants admit that s7sOOO has been earned and received
~, a.
tiou adopted by of 5227s shares against AGO.
recommending the offer TO the rest OF the common
stock shareholders of the option OF changing their
shares into preferred stock on paying - per share ana
interest since Feb 1870 This suit is brought by Mr.
Kent to the carrying out Of this resolution He
claims that the offer the stockholders. in the very
darkest days OF the Company, TO risk their money,
formed contract with those who accepted the terms
that t unfair to those who pied great risk 10
place them equality with those who then re-
fused it, on the paying in sum by the latter which will
be returned to them in a dvi lend; that the
contract then made cannot be violated; that the
preferred stock was bought by hm at higher price
than the common stock the faith Of this contract
aud that the Company has no power 10 issue such pre-
ferred stock


Tue defendants answer that they have the same
power Tow to issue preferred stock that they had in
1870: that the issue Of such stock then unfair to
OF the stockholders who could obtain the pre-
ferred stock that at that time 1864 shares Of the old
Pennsylvania stock had not been changed into the
changed. and that all these entitled the
option granted TO the former holders of common stock
who elected 10 take preferred stock that placing all
the stock on an equality will not harm either class, but
proved By the holders Of shares Of preferred stock
sad OF A.750 shares OF common stock.


Judge Daniels doubts the right to create preferred
stock either in 1870 and therefore continues the
injunction He says: This action is commenced by the
the corporation for the purpose OF preventing the fur
ther conversion of common into preferred stock 1t is
power OF kind has been expressly conferred by it's
charter, whether the corporation can legally authorize
common stock. the plaintiff who never consented
10 the issuing Of preferred stock has the equitable
right to have that doubt solved. before such
authority shall be exercised by the Company Whether
the preferred stock held by the plaintiff be
tanned valid IL not necessary TO consider at this
time for he has a sufficient Interest the Of
stock 10 entitle him protection against the
further issue of preferred stock the Company has
change its common into preferred stock. 1t is
certanly difficult discover under the charter OF the
company source from which the power to Issue
esred stock be derived aud In that view Of the
the Injunction should be continued to the final hearing
In the cause An order OF that nature will therefore be
made c. r. Stone and q. p. Lowrey for plaintiff; j. NJ.
Van Cott aud j. L. Burrell for defendants.