, 1890-11-06
SUGAR TRUST DECISION
A Receiver VIII Be Appoint
ed by The Court.
EFFECT OF NEWS ON CHANGE
Heavy Selling by Frightened Hold
ers OF Trust Certificates
Prices Drop.

New York, Nov. 3.-Judge Pratt
banded down decision in the sugar
trust case in which he says receiver.
ship is necessary, and two receivers
should be appointed. The receivers will
take possession of all the properties and
all.moneys ofth trust. 1t is understood
that no person Identified directly with
the trust will be appointed.
The cases involved are known as the
Cameron against Havemeyer and Have
meyer against the Brooklyn Refinery
Company. The judge justified the orig
inal injunction plan OF reorganization,
but says 1t had been supposed that there
would be a publication of the plan under
the consent of both parties. lfplaintifls
say their own bill of original trust agree
incnt be void, certainly they ought not
attempt duties which Its language i'm.
poses upon them, because such acts
would constitute further oiienses against
the law, which would subject corpor-
ations composing the trust to forfeit
ure of charters.
The court holds that the original
stockholders Corporation, having deliv-
cred their certificates to the trustees,
"iNh "hNHohity W issdc trust
representing their undivided interests,
the original stockholders are stopped
from questioning the title of the pur-
chasers, and holders of certificates de-
rive title from the stockholders OF
the corporation, not from the trustees,
who have merely authority derived
from stockholders 1t is not necessary
to determine where the legal title is, be-
cause the trustees concede in their bill
that they hold IL for the benefit of GER
tihcate holders. The defendants are
therefore in possession of property be-
longing equitably to others, which came
into their hands under an agreement
void as to the main purpose for which it
was made, and which they can not le-
gally use for the purposes for which it
was placed in their hands. They are
utterly powerless to convey and give
good title or distribute It TO the rightful
owners. The object of the trust having
failed, each certificate holder has the
right to demand that the affairs of the
trust be wound up, and he have his
share of the joint property.
His honor knows no way by which
this can be accomplished except by un-
unanimous consent of certificate holders
or application to the courts. Meantime
the disposition of the property is the vital
question. Shall it be used SO as to en-.
danger the corporations or bo taken by
the court and held intact for all those
interested? Shall this vast amount of
property be left in the hands OF board,
acting without defined duties or restric.
tion, without legal authority, and sub
jeCt to only the Will or discretion of a
majority of its members? 1t Is con-
ceded at the same time the court must
appoint some person to dispose OF the
property and divide the proceeds. Ger
titCate holders ask an immediate
settlement of the trust. The trustees
claim the proper time has not arrived.
The answer IL a receiver will not inter
fere with the proper plan of organiza-
ton. Indeed, in case a satisfactory
scheme of reorganization Is proposed,
his honor saw no reason why the certiti-
cate holders composing 1t may not have
their share turned over to them, always
leaving enough property in the
hands of the receiver to meet the de-
mands of creditors and certificate hold
ers who do not come into the new
scheme. The court continues that both
parties may submit nominations for the
appointment of receivers, with proposed
orders or decree, on or before Thursday
next, nominations to be left with the
clerk, the amount of bonds to be fixed
Il the II me of naming the receiver.