The Jersey City news. (Jersey City [N.J.]) 1889-1906, 1896-12-10

Injunction Proceedings
Against the Cigarette
Trust in Chancery
Today.
TOBACCO CoMpANY's ARGUMENT
Mr.. Lindabury Contends That the
Equity Court Has No Juris-
diction-Famous Cas- Cited

Mr.. Thomas NJ. McCarter closed his ar
gument this morning in Chancery chain
bers before Vice-Chancellor Reed in the
famous fight to break up the trust of the
American Tobacco Company by Attorney
General Stockton at the relation Of
Messrs. John R. Miller and Frank r. Mil
Ter, Of Newark, jobbers in the sale of
cigarettes.
With Mr.. McCarter for the Attorney
General We're these counsel:-T. N. Nc
Garter, Jr., B. f, Einetein, NJ. S. Ginter-
man and Felix II. Levy, of New York.
Against them for the Tobacco Company
We're Joseph H. Choate, the distinguished
New York lawyer; r. v. Lindabury, Of
Newark. and W. W. Fuller, of New York.
In closing for the Attorney-Genera this
morning Mr.. McCarter said
That the purpose of the combination
was to obtain the entire control Of the
cigarette trade, to suppress all COMPETE
ton, not only between the parties to 1t,
but also outside of it, and thus control
the price in the interest of the combina-
ton That it has completely accom-
plshed such purpose by means of the
agreement of October IA and the certificate
OF Incorporation under the laws Of New
Jersey; that by that Incorporation they
acquired no power whatever not previous
ly possessed by these parties, except to
carry into effect such purpose. That by
means of the franchise it has acquired
the entire control and mastery over the
cigarette trade in the United States.
we contend that the trade in cigarettes
cannot be successfully conducted without
the product of this combination, and so
impossible has it become to conduct that
business without the goods Of the COM
bination that those who would not yield
to it's power could not do business, and
that such great and important houses as
Park & Tilford in New York and William
Doulton & Company of Trenton found
themselves compelled to succurnb to it's
influence and power.
1T has thereby acquired for itself a
complete monopoly of the whole trade at
prices fixed by itself, and which admit of
no deviation, and the desperate struggle
which the National Cigarette and Tobacco
Company has been compelled to make to
get the least foothold in the market shows
the extent of its baneful influence and
power. and it has completely destroyed a
~ IL 1acAlttoS u
J. R.. Miller & Son for no other cause
than dealing in the goods of a rival con-
Germ, none of which could have been ac-
complished without the use of the fran
chise obtained by the Incorporation in
New jersey
MI. McCarter as to the probable nature
of a decree against the Tobacco Company.
Il don't contend that the Court of Cham
Gerry could take away its charter" said
Mr.. McCarter.
II suppose not" added the Court.
A II the Acknowledgement proposes to
do is to arrest the action of this trust by
showing that under the guise and cloak
of a corporation of New Jersey it is
throttling individual competition replied
MI. McCarter, winding up six hours of
talking with a formidable list of authori-
ties on that point from the House of
Lords and other courts in England, to-
gether with American authorities.
Mr.. Richard ". Lindabury, of counsel
argument. After reciting the statement
of the case, the ~pleadings, the proof and
the points in demurrer, counsel plunged
into the argument proper. His first point
was that the Court of Chancery is with
out jurisdiction to inquire or determine as
to whether or not the American Tobacco
Compony was organized for an unlawful
purpose or, "in an unlawful manner
Point No. 2 was that the Court is also
without jurisdiction to restrain the COM
from using its franchises Ito stif1e
competition in the business of manufac-
turing paper cigarettes or to injure or
destroy the business of the National
Cigarette Company or that of any job
bers or dealers who desire to become
This Court of Equity continued Mr..
Lindabury, is also without jurisdiction
to restrain the American Tobacco Com
pany from refusing to sell the cigarettes
which it manufactures to the complain
ants, ana no more can the Court re-
strain the company from disposing. of
ifc nrn6f1af aannrdinU m Tho aonotr,
ment plan of March l, 1892, no matter
what may be the motive of the company
for SO doing.
we insist thai no monopoly can be
illegal hat is obtained by a man in
the exercise of his legal rights, and
exercise Of his legal rights because such
exercise is prompted by bad motives"
AS an authority on the latter points
ms vs.. Fowler, "A Pa. ST. sos, which says
Malicious motives make a bad action
worse; but they cannot make that wrong
Again he said, in Phelps VS.. Norton. 70
N: Y, a.: Bad motives in doing an act
which violates no legal right of another
ton.
Proceeding to his next point that the
mpa could not be enjeined from
the firms composing the trust, Mr.. Lin
dabury. said Il had the right to do so
it had not this right. he argued the
act under which the American Tobacco
Company organized would be merely
ultra wires and could not be enioined
In equity. So too If 1t appeared that the
defendants other than the Tobacco Com
pany We're using the corporate organiz-
alton of that company In the conduct of
their business they could not. be enioiu-
ed from SO doing.
Mr.. Lindabury next turned to the proofs
without regard to questions of furIsdic-
ton and submitted this point:-That The
proofs do not show that the American
Tobacco Company was organized in an
unlawful manner as charged by the Attor-
ney-General. He said it was true that
the company had never established facto-
ries or depots in New Jersey, but 1t was
also true that no law requires it to do
so. The company has always had an of
flee in this State in compliance with the
law. No part of its capital stock was is
sued either ~fraudulently or without con-
sideration. The stock was issued for pro-
perty purchased at its fair value,
Further, Mr.. Lindabury commended, the
proofs fail to show that the American To-
bacco Company was organized for the
purpose of acquiring an Illegal monopoly
in the manufacture or sale of cigarettes.
The company was formed for the pur-
pose OF acquiring the businesses Of five
principal cigarette manufacturers in the
United States. They undoubtedly intend
ed he said, ito do as large a portion of
the pushes of the country as their COM
bined experience, capital and manufacture
ing facilities would enable them to do. and
they were actuated by q desire to do
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