Los Angeles herald., 1890-06-25
CORPORATE DEATH.
A Decision Against the Sugar
Trust.
The Court of Appeals Delivers
An Opinion.
The Judgment of the Lower Court
Fully Sustained,
The North River Refinery Forfeits Its
Franchises-The Trust People Not
Alarmed.
Associ ated Press Dispatches. |

ALBANY, N. Y, June 24.-The de-
cision of the court Of appeals in the case
of the people VS.. the North River Sugar
Refinery Company, written by Judge
Finch, was handed down today. 1t
says "The judgment sought against the
defendant is one of corporate death.
The state which created, asks us to de-
stroy, and the penalty invoked repre-
sents the extreme rigor of the law
Two questions open before us {:
First, has the defendant corporation
exceeded or abused it's powers and Sec
ond, does that excess or abuse threaten
or harm the public welfare. We find
that it has become an integral part and
element of a combination which possesses
over it absolute control and dictates the
extent and manner and terms of it's en-
tire business activity. The defendant
corporation has lost the power to make
a dividend, and is compelled to pay
over its net earnings to the mas
ter whose servant it has become.
Under the order of that master, it is re-
fused the privilege to refine sugar, and
upon the market. 1t cannot stir unless
the master approves, and yet is entitled
to receive from the earnings of other
refneries, amassed as profits in the
treasury of the board, its pro-
portonate share for subdivision
among its own stockholders who
now own substitute certificates.
In return for this advantage it has be-
come liable to become mortgaged; not
{or its own corporate benefit alone, but
to supply with funds the controlling
board when that board reached out for
other coveted refneries. All of this is
admitted by the defendant
The decision, after further considering
the formation OF the trust, says: ''The
defendant could have prevented it being
founded by refusing to register or recOg-
nize the legal transfer of stock. They
should have appealed to the law, thus
shattering the trust at the outset. The
question to be determined is whether
the conduct of the defendant in aiding
to form the trust was illegal. In all
these points which have been reviewed,
it is found that the corporation was doing
the public an injury, and in avoiding
the state law which compels the reser-
vation of corporate rights, proved I'M
faithful to it's owners. The present cor
poration or trust puts upon the market
capital stock, proudly defiant of actual
values and capable of unlimited eXpan
sion. 1t is one thing for the state to re-
spect rights of ownership, and quite an
other thing to add to the possibly
further extension of their consequence
by creating artificial authorities in
the management of all such
aggregations. If corporations could
combine and mass their forces in
solid trust with little added risk to the
capital already in, without limit to mag
nitude, a tempting and easy road is
opened to enormous combinations vastly
exceeding in number and strength any
possibilities of individual ownership.
The state seeks to protect individuals,
rather than combinations.
Concluding, the opinion says:
"The defendant corporation has
in the performance of its corporate
duties, and that in respect so material
and important as to justify a judgment
of dissolution. Besides that in this state
there can be no partnerships of separate
and independent corporations, whether
direct or indirect, through the medium
of a trust-no substantial consultations,
which avoid and disregard the statutory
provisions and restraints but that man
ufacturing corporations must be and
remain separate as they were created, or
one under the statute. The Judgment
appealed from is affirmed with costs"
New YORK, June 24.-Supreme Court
Justice Barrett, referring to the decision,
said: "This is matter in which have
taken greater interest, | think, than in
any other which has come before me.
This question of trusts is, think almost
of as much consequence as slavery"
On the street the sugar people and
those interested in the trust, appeared
to be more amused than disconnected by
the decision of the court. They say the
trust has not received its death blow,
but will still continue. Only the
"method" of doing business will be
affected