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Business Associations Keyed to Epstein, 5th Ed.
A.P. Smith Manufacturing Co. v. Barlow
Citation:
98 A.2d 581 (1953)Facts
The A.P. Smith Manufacturing Company was incorporated in 1896 and manufactures valves, fire hydrants, and special equipment for water and gas industries. The company had approximately 300 employees and operated plants in East Orange and Bloomfield, New Jersey. Over the years, the company had regularly contributed to the local community chest and occasionally to educational institutions. On July 24, 1951, the board of directors adopted a resolution to contribute $1,500 to Princeton University’s Annual Giving campaign. When stockholders questioned this action, the corporation sought a declaratory judgment to affirm its authority to make such a donation. At trial, the company’s president testified that the contribution was a sound investment that created goodwill and a favorable business environment. Other business leaders testified about corporations’ public responsibilities and self-interest in supporting educational institutions as essential to preserving the free enterprise system.
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