The morning call., 1890-06-11
END OF THE SUGAR FAMINE.

The decision of the Supreme Court in the
case of the American Refinery settles
point of law for this State. The facts were
these: The American Refinery became a
member of the Sugar Trust aud assigned
its property to Messrs. Havemeyers & Elder
of New York in trust. On this an applica-
>tion was made by the Attorney General on
behalf Of the State to forfeit the company's
charter, on the ground that its partieipa-
ton in the trust defeated the object for
which it had been clothed with corporate
power. Tho application was granted by
Judge Wallace. Judge Wallace then ap-
pointed receiver for the property. At
this the refinery people rebelled, and re-
sisted the courts pretension that it could
place their property in the hands of its off
GERS. The Supreme Court decides that the
point is well taken and vacates the receiv-
ership.
1t appeared on the argument that in ap-
pointing the receiver the Superior Court
viewed the step as sort of penalty on the
company for violating the conditions of its
charter. 1t said to the American Refinery:
You have been derelict to the function you
Undertook to perform when you became
corporation, and the court will punish you
for your misconduct by taking your prop
erty out Of your hands and placing it for
safe keeping in the hands of an officer OF
its own. The laws Of California do not
warrant this action. There is no authority,
in fact, in the code for the appointment of
receiver for corporation except on the
application of a creditor or stakeholder
who alleges by affidavit that his property is
in danger. Chief Justice Beatty, who drew
the opinion, is very clear on the point. he
says:
The assumption which forms the basis Of the
entire argument in favor Of the receivership is
that the appointment of a receiver to administer
its assets is one Of the penalties designed and in
effect prescribed by the Legislature as part of
the punishment TO be visited upon the stock
holders OF corporation which by any mtseon-
duci.of its own has incurred forfeiture of Its
charter. There is. in our opinion. little TO justify
this assumption IN the statutes OF New York.
upon the supposed construction OF which so
much reliance Is placed. But ii such were the
declared or plainly implied policy OF that State
the significant fact remains that our statutes not
only contain no semblance OF such declaration,
but that our Legislature, In framing the law of
this State, while looking to the statutes and
codes OF New York for model and guide, has
deliberately rejected every provision from which
such an Implication might arise, and in place
thereof has substituted one Of the opposite i'm
port
The transfer of the property of the Amer
lean Sugar Refinery to the Sugar Trust was
a wrongful act, done in violation of the
company's charter, and calculated to defeat
the purpose for which the company was or
ganized. But it does not appear that the
company's property stood in danger of be-
ing wasted, nor that the people Of the State
at large had any interests which required
the Intervention of court for their protec.
ton.
As matters now stand, the American Re-
finery is again in the hands Of its owners,
and consumers are rejoicing over the fact
that the 5000 barrels of sugar which were
locked up in the receivers hands are going
into consumption; and better still, that
when we again begin to receive liberal sup
plies of raw sugar from the Islands and
from Manila, there will be two refineries
to handle 1t instead Of one. How the pros
pecI will affect those branches of industry in
which sugar constitutes leading raw ma
terial may be inferred from the fact that
since the American Refinery was closed
most grades of sugar have advanced nearly
a cent pound.