Iron County register. [volume] (Ironton, Iron County, Mo.) 1867-1965, 1890-07-03
BADLY FLOORED.
The Sugar Trust Receives It's
Death Blow.
Decision of the New York Court of APP
peaIs Sustaining Those of the Lower
Courts Declaring the Inegan-
~ of the Sugar Trust.

ments of the lower courts dissolvlng the
trust are fully affirmed by the Court OF
Appeals. This fact was not apparent
in the first decision handed down at ten
O'Clock, the decision being so clouded
with technicalities that its true in
tent was not apparent to one
not familiar with every phase of
the case. At eleven o'clock. however,
Clerk Parks announced to the anxious
group of correspondents that there had
been a mistake in preparing the de-
cisiOn, his deputy clerk, or some one
else, had left out the most important
feature of the decision, viz: The fact
that the court had affirmed in toto the
decisions of the lower courts. The de-
cision was written by Judge Finch, in
which he says:
The Judgment sought against the defend
ant is one of corporate death. The State
which created asks US to destroy it, and the
penalty invoked represents the extreme
rigOr of the law. Its infiiction must rest
upon grave cause and be warranted by
material misconduct The life of a corpo-
ration is indeed less than that of the hum
blest citizen, and yet it enveIops great ac-
cumui alton of property, moves and carries
in large volume the business and enterprise
of the people, and may not be DESTROYED
without clear and abundant reasons This
would be true even If the Legislature should
debate the destruction of the corporate life
by repeal of the corporate charter. but is
beyond dispute where the State summons
its defender before its judicial tribunals, and
submits its complaint to their judgment
and view. BY that process it assumes the
burden of establishing the charges which it
has made, and must show warrant in the
facts for the relief whic it seeks. Two of
the charges preferred in the complaint have
.dEOpDed out of sight. They were little
Importance. and have been prudently dis
missed from the inquiry for that reason;
and we are left to consider the one grave
and serious accusation to which alone the
proofs and argument have been directed.
That accusation is adequate for the purpose
for which it is framed. but upon two cOndi-
tions, which dictate the line of inquiry and
limit the area of discussion. 1t appears to
be settled that the tate as prosecutor must
show on the part of the corporation accused
some sin against the law of its being which
has produced, or tends to produce, injury to
the public The tranSgression must not be
merely formal incidental. but mate
ri al and serious; and such as to harm
menace the public welfare. For the
State does not concern itself with the
quarrels of private litigauts. 1t furnishes
for them sufficient courts and remedies, but
.intervenes as party only where some pub
lie interest requires it's action. Corpora
-tions may, and often do, exceed their au-
thority. wherein their private rights are af-
fected. When these are adjusted all its care
ends and all harm is averted. But where
She transgression has a wider scope and
threatens the welfare of the people, they
may summon the offender to answer for the
abuse of its franchise or the violation of its
corporate duty. The code of civil proceed
'ure authorizes an action for that purpose
when the corporation has violated any
provision of the law whereby it has forfeit
ed its charter become liable to be dis
solved by the abuse of it's powers"
A number of recent decisions in keep
ing with this line of policy are quoted.
He continues:
Two questions therefore open before us
First, has the defendant corporation ex-
.ceeded or abused its powers; and, second.
does that excess or abuse threaten or harm
the public welfare. We find disclosed that
it has become an integral part and element
of a combination which possesses over it
an absolute control and d dictates the extent
and manner and terms of its entire business
activity. All its stock is in the central cor
poration dominated by a board consisting
of only eleven individuals, who took and
distributed to its own stockholders certifi-
Gates of the board, carrying a proportionate
interest in what it describes as it's capital |
stock. 1t has lost the power to make divi- |
s3end. and is compelled to pay over its net
earnings to the master whose servant it has |
become. Under the order of that master |
it has refused to refine sugar, and by so |
much has lessened the supply upon the |
market. It not stir unless the master |
approves, and yet is entitled to receive from |
the earnings of the other refineries, amassed |
as profits in the treasury of the board, its |
share for division among it's |
own stockholders, owning the substituted |
certificates. In return for this advantage it |
has become liable to be mOrtgaged, not for |
its own corporate benefit alone, but to sup
ply with funds the controlling board when
that board reaches out for other coveted re-
fineres. All of this is admitted by the de-
PENDANT. The question to be determined, is
whether the corporation became the servant
of the board by it's own voluntary action, or
the will and power of others. II what has
happened is ascertained to be that the
of this corporation one or
many, sold absolutely to the board their
entire stock, and the latter has merely
chosen directors in their own interest and
are handling the property as absolute own
ers may, then it is difficult to wherein
the corporation has sinned or what it has
done, more than for time to omit to do
business. This is the appellants theory.
On the other hand it is commended that
there never was sale, but a trust consti-
tuted by mutual agreement; that they who
agreed were the whole body of stockhold-
senting and bonding the corporation itself; |
that they transferred their shares to the
board upon the trusts declared in the deed;
that the certificates, issued by the board were
corporate stock holders parted with the |
legal title to their stock to the chosen trus-
tees with the power to vote upon it, but re-
tanned its beneficial ownersh ip through the
operation of the cert iticates, and the !
corporations entered partnership with
the board in control In constructing these
two theories, the court says that in con-
tracts the buyer, which in this case was the
board, should bind itself to Il term of sale,
but according to the stockholders. this was
not done, the board making no price. In
shis case the stockholders alone fixed the
price and the vendors did not sign the con
tract, but left it to be supplied by inference
of their action. They allowed the board, |
however. to fix the personal property price.
in the light of these events the board was
simply an agent which is the characteristic
Of n trust The action which placed the
stock in the hands of a trustee shows that no
sale was intended but simply a transfer in
trust This is also proved by the mortgage
CLAUSE. No absolute owners require per-
mission to mortgage, but here the supposed
buyers are authorized to put mortgage on
ishe stock. Notwithstanding that the board
had no capital or power to mortgage prop
xsrty, we find twenty refineries willing to put
themselves in its control 1t is conceded by
she best authority that this is a trust.
The growth of the trust is then
Sketched:
The history shows that there was corpor-
ate action on the part of the North River
Sugar Refinery Company which bound it.
THE corporation thus became an element of
she trust The way the companies could
have prevented the trust being formed was
by refusing to register or recognize the ille-
gal transfer of stock and could have refused |
to register the transfer upon the books, ap-
peafing to the law to sustain them, thus
ali "a ttertno the trust at the outset of it's ca