by Facts: The A. P. Smith Manufacturing Company was incorporated in New Jersey in 1896 for the purpose of manufacturing and selling valves, fire hydrants, and other equipment. Over the years, the company made occasional contributions to local charitable and educational institutions.. 13 N.J. 145 (1953) 98 A.2d 581 THE A.P. SMITH MANUFACTURING COMPANY, PLAINTIFF-RESPONDENT, v. RUTH F. BARLOW, WILLIAM B. CAMPBELL, WILLIAM M. BRENN, EUGENE M. SMITH AND JOSEPH P. HALPIN, INDIVIDUALLY AND AS REPRESENTATIVES OF THE HOLDERS OF THE PREFERRED AND COMMON SHARES OF THE A.P. SMITH MANUFACTURING COMPANY, DEFENDANTS-APPELLANTS, AND THEODORE D. PARSONS, ATTORNEY-GENERAL OF NEW JERSEY.
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A.P. Smith Manufacturing Company made a donation to Princeton University. According to the president of the company, the donation was “good” business” because it helped to produce an educated citizenry from which the company could hire. The president further stated that such donations were a “reasonable and justified public expectation.” The company’s shareholders sued on the.. Brief Fact Summary. Defendant stockholders, Ruth Barlow et al., questioned the legality of a donation made by Plaintiff corporation, A.P. Smith Manufacturing Company. Synopsis of Rule of Law. Corporate gift-giving is an allowable method of increasing goodwill, but the gift should be less than 1% of capital and surplus and directed to an institution owning no more than 10% of the company stock.
