Opinion
09-11-1905
OLIVER v. RAHWAY ICE CO.
N. C. J. English, for complainant. Cross & Hoe, for defendants.
Bill by Charles R. Oliver against the Railway Ice Company to foreclose a mortgage. On exceptions to master's report. Exceptions disallowed.
N. C. J. English, for complainant. Cross & Hoe, for defendants.
STEVENS, V. C. My opinion in this case is reported in 64 N. J. Eq. 596, 54 Atl. 460. The only question on the exception to the master's report is, what is the fair value of the stock sold by Oliver to the company? The master found it to be $12,500, and I think his valuation is as nearly correct as it is possible to make it in a case of this sort, where the stock has no known market value. The company issued 600 shares at $100 each, but on this only 50 per cent. was assessed. Oliver took one-half and paid into the company $15,000. He sold it to the company for this amount in August, 1899. All the money paid in on the stock issued was applied in the construction and equipment of an ice plant. It was first intended to manufacture ice by means of the water power. But, as the amount of power was probably overestimated, steam power was introduced. There was some loss in making the necessary changes, and the whole capital was not spent to the best advantage. This would naturally aid to lessen the value of the shares. On the other hand, Mr. Freeston's estimate of what the property was worth in August, 1899, appears on his own showing to be much too low. He was a man of large experience in the business, and we find him at the fall of the following year purchasing the capital stock at a valuation of $35,200. That is at more than par. It is true that this was not in any sense a cash purchase. By a transaction whose propriety is now in question he paid or secured the purchase money with the company's assets. But his figures show that it was worth much more than his estimate of its value the year before, and I do not gather from the evidence that any additional capital had been contributed in the interval.
I think the exceptions should be disallowed on both sides.