The morning call. [volume] (San Francisco [Calif.]) 1878-1895, 1890-11-04
THE SUGAR TRUST.
Property and Money to Be Placed in he
Hands Of Receivers.

New YORK, Nov. 3.-Judge Pratt has
handed down IA decision in tile Sugar Trust
case, in which he says a receivershp is
necessary and two receivers should be
appointed. The receivers Will take pos
session of all the properties and moneys of
the trust 1t is understood no person
identified directly with the trust will be
appointed The Judge gives the two parties
to the suit until Thursday to agree upon the
two persons to be appointed receivers.
The cases involved were known as
Cameron against Havemeyer, and Have
meyer against the Brooklyn sugar Refinery
Company. The Judge jus.fies the original
injunction retaining the plan of reorganlz-
publication under consent by both parties.
If, us the plaintiffs say in their own
bill, the original trust agreement be void,
certainly they ought not to attempt 10 per-
form the duties which its language imposed
upon them, because such acts would const-
tute offenses against the law which would
subject the corporations composing the
trust to forfeiture of their charters"
The court holds that the original stock
holders of the corporation having delivered
their certificates to the Trustees with au-
thority TO issue trust certificates repre-
seDting the undivided interests of the orig-
nal stockholders are estopped from ques-
tioning the title Of purchasers and holders
of certificates who derive title from the
stockholders of the corporation and not from
the Trustees, who merely have authority
derived from the stockholders. But it is
not necessary 10 determine where the legal
title is, because the Trustees concede in
their bill that they hold it for the benefit Of
the certifcate-holders. The defendants,
therefore, are 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 cannot legally use for the
purposes for which it was placed in their
hands. They are utterly powerless to con-
vey and give good title, or distribute 1t to the
rightful owners. The object of the trust
having failed each certificate-holder has the
right to ask 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
the unanimous consent of certificate holders
or by an application to the courts. Meantime
the disposition of the property is the vital
question. Shall it be used so as to endanger
corporations, or be taken by the court and
held intact for all those interested? Shall
this vast amount OF property 6e left in the
hands of a board, acting without defined du-
ties or restriction, without legal authority,
and subject to only the will or the discre-
ton of a majority of its members? 1t is
conceded, at the same time, the Court must
appoint some person to dispose of the prop
cate-holders ask an immediate settlement OF
the trust The Trustees claim the proper
time has not arrived, as there is a plan for
reorganization. The answer is the receiver
will not interfere with q proper plan of or
ganiZation. Indeed, in case a satisfactory
scheme of reorganization is proposed his
Honor saw no reason why the certificate
holders composing it may not have their
share turned over to them, always leaving
enough property in the hands of the receiver
to meet the demands Of creditors and GER
tificate-hoders who do not come into the
new scheme. The Court continues: Both
parties may submit nominations for the APP
pointment of receivers with the proposed or
der or decree, on or before Thursday next,
the nominations to be left with the Clerk.
The amount of bonds will be fixed at the
time of naming the receivers"
EFFECT ON THE MARKET.
The news that the Sugar Trust case had
been decided against the trust was not gen.
orally known until nearly noon, but before
the Stock Exchange opened rumors were
freely circulated that receiver would be
appointed. There was a large crowd of
brokers waiting to execute selling orders
received since Saturday. The rumors of
probable receivership frightened off buyers,
and as result heavy selling caused sharp
decline. In the first few minutes the price
dropped to S62, then rallied to S64 ON reports
that no decision had been handed down,
and when the official news of the adverse
decision was published the price fell from
S64 to $50 S71a. Sales in the first three
hours were very heavy, amounting to one
fourth OF the entire capital of the trust.
While the declin was in full force the rest
OF the market became stagnant, and during
the greater part of the day transactions in
the sugar trust absorbed all Interest.