Pittsburg dispatch. [volume] (Pittsburg [Pa.]) 1880-1923, 1891-01-18
TOO GREAT FOR THE LAW.


The reorganization of the Suga. Trust un-
der a charter, such as the obliging laws of
New Jersey furnish to corporations in other
States who desire to escape the restrictions
of more carefully drawn legislation, makes
a remarkable example of the lame and i'm
potent conclusions that follow upon at
tempts to restrain the great masses Of capi-
tai. This case brings into prominence the
very clear and authoritative declaration of
principles that are violated. Judge Bar
rett's decision against the Trust held it was
illegal as an organization in restraint of
trade. The decision of the Court of Appeals
went further in declaring that "the agree
ment, association, combination, or arrange
ment, or whatever else it may be called,
having for its objects the removal of compe-
tition and the advancement of prices OF nec-
essaries of life, is subject to the condemna-
tion of the law, by which it is denounced as
O criminal enterprise In the teeth of that
declaration the public is confronted with the
spectacle of the illegal enterprise taking
shelter under the charter of another State to
carry on its business in the State whose high
est court has declared its illegality. Judge
Roger A. Pryor is quoted by the New York
Times as declaring that, under the validity
given by New York to foreign charters, it
cannot interfere with the new organization
OF monopoly.
This is remarkable state of affairs if
true. But beyond the doubt whether any
theory of interstate comfy can give valid
ity to charter granted in one State to carry
on business in another which the law of
that State declares to be criminal, there is
the very emphatic question whether the re-
organization under this New jersey corpora
tion had under the New York decision any,
thing to reorganize. To understand this
point it is necessary to remember what the
decision affirmed. 1t was decided that
the transfer of the North river sugar refin-
cry, and as a corollary all the other re-
fneries belong to the trust, was illegal and
null. Even more, its illegality was so rank
that the charter of the corporation was for
feited. The inevitable consequence is that
the certificate holders who reorganized the
trust the other day. had nothing to reor-
ganize-provided the decision of the New
York Court of Appeals is enforced.
If A obtains property of D under a con-
tract that is prohibited by the law, the de-
cision of that fact leaves the property in the
hands of B. A may have an equitable claim
on B for the money which he paid; but the
decision means nothing if, after the illegality
of the transfer is declared, he can continue
to hold the property. If in the mean time
he has formed a stock company or issued
certificates of part ownership in the prop
erty be can transfer no title beyond what he
has under the law, namely, the equitable
claim to receive back the consideration on
contract which could not be fulfilled.
Now this is exactly what was done in the
case of the Sugar Trust. The decision of the
courts, if it was anything more than a mere
form of words, wiped out all the transactions
by which the control of the property was
concentrated in the trust. Ali the contracts,
sales. bargains and payments by which the
monopoly was organized were illegal, null
and void. If the decision stopped there the
refneries under the control of the trust
must go back to the original corporations.
and the certificate holders of the trust own
nothing except claim for the return of the
consideration. But the decision did not
stop there. The charters of the original
corporations were forfeited by the ille-
gality and fraud upon the public
involved in the transaction. Conse-
quently those corporations must be
wound up and their assets distributed
among the shareholders as they existed pre-
vious to the illegal and nulliied transfers
With this property the certificate holders of
the trust have no legal connection. The
inevitable consequence of the decision is
that all they can transfer to the New Jersey
corporation is their claim upon the legal
owners of the property for the return of
whatever consideration was paid on the ille-
gal bargain. This state of affairs leaves the
new corporation without any ownership
whatever of the refneries which it now