The New York herald., 1879-08-05

HOUSE.
BY TELEGRAPH TO THE HERALD.
NEWPORT, II. l.. August 4. 1879.
very important decision was rendered to-day IN
the United States Circuit Court. 1t was the long
looked for decision in the equity case of William s.
Hoyt, OF New York, versus Amasa Sprague ct al and
Charles G. Francklyn, of New York, ct al. versus
same. which was originally heard by Judge Shipley
and after his death by Judges sewell and Fox.
WHAT WAS ALLEGED.
The plaintiffs are the grandchildren of William
Sprague, the elder. who the junior partner in
the original firm OF A. x W. Sprague. They allese
in their brief that Fanny Sprague. the widow Of
Amasa sprague, the elder. who appointed ad-
ministratrix of her husbands estate upon his de-
cease. and Mary Sprague the widow of William
sprague the elder, who was appointed his admins
tratrix failed of administration. Moreover they
allege that no settlement of the accounts of the
original firm of A. * W. Sprague was ever procured
In the meantime however the business of the original
firm carried on and extended by William Spragu
the elder. who. in 1856. took into copartnership
his son Byron and his nephews Amasa and William;
but after William ST., died, i'll 1856. Byron Anasa
and William his and nephews, still carried
the business, and in 1862 obtained charter author
izng them to form a corporation under the name
of the A. 4 w. Sprague Manufacturing Company.
Inc alleBe that lOrluatlOu tue CUT
poration with other acts which they name in their
brief, was part of o scheme the part of the de-
PENDANTS for keeping possession of the assets Of the
original firm and preventing the plaintiffs from
coming into possession of the property which is
rightfully theirs as heirs OF William Sprague the
elder, and it is in order obtain the share which
William the elder had in the original firm that they
brought suit.
SUPPORTING EVIDENCE.
The decision of the Court would ill nearly two
COLI of the HERALD. The hardships of the
on one side that the comp1ainants should have lost
d large estate by bad investments not originally
made by them, and on the other that the creditors
of the manufacturing company should lose large
part OF the property to which they gave credit were
brought the notice OF the Court by able counsel,
and as these considerations balanced each other
there was the difficulty in considering the
in its purely legal aspects. The Court decided
that it found no evidence to support the
numerous charges of fraud, over persuasion of the
admnstratrix &C.. but that. the contrary it was
clear that had been of those not nrequent
family arrangements by which property in trade
manufacture has been kept together for the sup
port and benefit of all concerned. 1t was the opin
ion of the judges that it was the probable purpose
of the complainants grandfather in forming the CO.
partnership his deathbed to have the business
continued precisely it had been continued but.
as he had not the knowledge requisite for carrying
out his wishes in a legal manner, the property OF
the complainants. while they were minors, could
not lawfully be kept in the business.
NO FRAUD APPARENT.
Numerous authorities were cited to show that Q bill
could not be supported il the charges not main
tanned. The Court did not understand that there
was absolute rule i'll equity that tho bill should
be dismissed il the charges OF fraud were not sus-
tained and it the opinion that much of the
fraud charged was intended to be considered legal
result of admitted lacts. The bill, and more
esps cially the briefs and the arguments III
its support, attribute to surviving partners more
onerous relation OF trust than was supported by
any authority cited by counsel which they (the
Judges) able to find Partners were quasi trus-
tees for each other both before and after dissolu-
ton, and when partner retired or became bank
rupt died both parties or their representatives
still remain quasi trustees, Which means scarcely
l ens;ty. Upon the death of William Sprague 1T was
l.sruty of the surviving partners to pay to his adj
ministratrix the actual value OF his share OF the
realized by due vigilance and without undue
sacrifice They also decide that the administrators
had power settle with the surviving partners on
i'll the exercise OF good faith she chose
to accept. The argument, therefore. that there is
| some specially legal mode OF accounting not
| sustained The administrator the personal rep
resentave of the deceased partner and had all his
power of settlement except that being trustee for
| the next OF kim he can give away nothing. The
charges OF fraud and concealment were not sus-
tained nor was it true that both OF the referees
were attorneys for a. Il W. Sprague, they repre-
sentng different interests. and |. was the opinion
Of the Court that the share assigned the guar dan
assigned with good taith care and diligence and
with full opportunity for investigation and was as
large as larger than. the amount which q
court OF equity would have given.
THE APPOINTMENT OF GUARDIANS.
The Court dwelis at great length upon the law of
nations in regard to the appointment OF u guardian
TOR non resident minors. the latter residing New
York Mr.. Hoyt being at the time "a member of the
now bankrupt, house OF hoyt. Sprague Co. A
law was passed by the Rhode Island Legisla-
certain stocks from being the proper subjects
of such investment. 1t was passed to meet this
especial case but had it passed at later period than
the general law then the Court would strongly in
cline the opinion that 1t would be void AS making
special exception to general law. The settle
ment, therefore, both lawful and honest; it
gave full share to the guardian, and the deed con-
veyod to the corporation title free from trust to
account further the complainants. In conclusion
the Court remarked that the fact was not without
Importance that the losses and disasters which have
brought the corporation to bankruptcy appear to
have happened long after the settlement of ,o65 and
in all probability after the youngest of the COM
planants OF age. The bill charges the fault
to have been III the management of the corporation
in which each OF the complainants was an ownor
than six years after becoming sut 5tt,ts
Defendants attribute the misfortune to the revuision
of business which occurred in 1873, but whichever
party right in respect to the causes OF msfor-
tune the Court thinks 1t very doubtful whether a
court of equity could permit stockholders to ex-
change their position for that of secured creditors
statute OF limitations in the The Court there
fore dismissed the bill with costs.
EFFECT OF THE DECISION.
What effect the decision will have upon the gen.
be eagerly discussed tomorrow in financial circles
in tins State also liz New York. where the greater
part of the paper OF the firm is held. The decision
will enhance the value of the paper, for whine the
suit pending it was hard work to dispose of it
a. any price. 1t sold as low as sixteen
cents, and it has gone beyond twenty-five
cents since the firm became embarrassed. The
plaintiffs in the above suit inherited onesxth of tho
immense estate hers at law, anu 1t generally
conceded that they would gain what they desired
viz the payment of their claim in priority to all
Others and further that the rate deed effect,
,vit truul t,,f flai flp a..nr ,At. al
in value and the receiver of the property unable
to dispose of IT requested. Tor the benefit of the
general creditors, he not being able to give
clear title. II is evident that the Arm, well
the creditors, who. for long time,
announced in the HERALD have been demand
ing their claims will be benefited by the unex-
pectcd decision The Spragucs through secret nts
purchased q large amount OF the paper while it
selling at it's lowest figure, and they will be able
TO realize something handsome by the transaction.
Other parties who purchased the stock will also bo
benefited. and thore will be general rejoicing among
the great of creditors representing
SS.n0O.0O0 OF Indebtedness The future movements
of the creditors who have been cndeavoring to OBJ