[HM89AAJ], Letter from Sherburne Blake Eaton to Charles Henry Coster, March 26th, 1889
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Title
[HM89AAJ], Letter from Sherburne Blake Eaton to Charles Henry Coster, March 26th, 1889
Editor's Notes
Summary: Edison’s attorney, S.B Eaton, gives legal advice to C.H Coster, of the Edison General Electric Co. 1) He advises that a director is personally liable for signing a stock certificate which says the certificate is issued for cash under New Jersey law, when payment in property is intended. 2) Eaton advises Coster that two certificates of fully paid capital must be made, under sections 30 and 31, and that if property rather than cash is used as payment for stock, this must be set forth in the certificates. 3) Eaton describes “Agreement E,” by which one Mr. Decker receives stock from the General Co. on condition of selling the stock and paying priceeds into the Treasury of the General Co. Eaton opines that this stock may be used as security to borrow money on, but that a lender would hesitate to accept it as good security, and that the certificate that states that Decker’s stock has been paid for in cash is false. 4) Eaton opines that Directors who did not sign a false certificate would not be liable for the certificate signed by their co-directors. 5) Eaton opines that stockholders holding a certificate that purports to be cash stock might be legally forced to hand over the balance due on unpaid stock to a creditor. 6) Eaton advises to abandon the scheme for issuing the Decker Trustee Stock, and to stamp any certificates “issued for property purchased,” or else to abandon the entire scheme in New Jersey and begin again in another state. 7) Eaton advises incorporating in New York State under the Manufacturing Act of 1848, citing convenience, familiarity, and lower liability than under the laws of New Jersey. 8) Eaton offers a more lengthy opinion should one be requested.
Author
Recipient
Mentioned
Date
1889-03-26
Type
Subject
Folder/Volume ID
HM89-F
Microfilm ID
144:222
Document ID
HM89AAJ
Publisher
Thomas A. Edison Papers, School of Arts and Sciences, Rutgers University