The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1899-05-03
BLOW AT A BIG TRUST
COURT OF APPEALS DECIDES
AGAINST NATIONAL LEAD COMPANY.
A "Combinev In Restraint of Trade
Cannot Cloak Its Object Under the
Form of q Corporation.

ST. LOUIS, Mo-, May I'm the Circuit
Court of Appeals to-day. with Judges Bland.
Biggs and Bond on the bench, a unanimous
decision was made in an appealed case to
the effect that a trust cannot cloak its OBJ
ject under the form of a corporation and
evade the penalties provided for violations
of the Missouri antitrust law of 1891. In
der this decision. accounts with trusts oper-
ating as corporations in Missouri are not
collectible.
In 1857 the S. E. Grote Paint Store Com
pany owed the National Lead Company
81, 700 for white lead. Suit was brought to
recover the s.700 and, incidentally. it is
claimed. to harass the company. The de-
Tense was that the National Lead Company
trust. formed to control prices. in vio-
lation of the provisions of the antitrust
law of 1891 one section of which reads:
ANY purchaser of any article COM
modify from any individual, company or
corporation, trapsacting business contrary
TO the preceding sections of this act, shall
not be liable for the price or payment or
such article or commodity and may plead 10
act as a defense to any suit for such price
or payment.
The case was tried before Judge HirzeI and
a jury in the Circuit Court at Clayton. A
verdict was returned in favor of the Ma
uonal Lead Company. The S. Z. Grote
Paint Store Company appealed. To-days
decision reverses and remands the case for
retrial. The evidence showed that the Ma
tional Lead Trust was organized in 1887 TO
control the lead business of the country. 1t
continued under the trust from organization
until 1891, at which time it had absorbed
thirty companies in the United States and
Mexico. engaged in the paint and lead bust
ness. In 1891, following the enactment in
this State Of legislation adverse to trusts, 1t
was reorganized in the form of a corpora
ton, under the name of the National Lead
Company.
The attorneys for the National Lead Com
pany commended in the trial of the case, that
the defense set up by the attorneys for S. E.
Grote Paint Store Company cannot stand
because the National Lead Company was a
corporation, not trust. They argued to
the Court of Appeals that the trial court
had erred in admitting evidence of the OBJ
Jects of the corporation: in other words
evidence tending TO show that it was cor
poration organized TO control prices as a
trust 1t was also claimed that the company
having charter from the State, could only
be proceeded against in the name of the
State and not by an individual. In its de-
cision. the Court of Appeals says:
The crucial question in this case is
whether the plaintiff corporation, either in
Its organization or business operations in
this State, has offended any of the pro-
visions OF its laws. That the predecessor of
the plaintin-the National Lead Trust-waS
an unlawful combination, both in purpose
and fact, is sufficiently established by the
nature OF the agreement under which il was
created and the methods and practices re-
sorted TO in furtherance of that agreement"
The Court of Appeals decision goes on to
say that the record shows that the bene-
fetal owners of the stock in the National
Lead Company were the same persons or
companies which were subscribers to the
National Lead Trust, and declares that the
corporation was professedy organized TO
acquire the assets of the trust and its char
ter authorized II to acquire the stock of
other firms in the same line of business.
Judge Bond, who wrote the decision, says:
"A combination which is illegal under the
antitrust law cannot be operated under the
cloak OF a corporation by its constituent
members or governing bodies"
The Importance of the case may be judged
from the array of legal talent. The Ma
tional Lead Company has been represented
by Elmer b. Adams, now judge of the Fed
eral Court of the Eastern district of Mis-
souri,: ex-Judge III. S. Priest +. w. Lehman,
ex-Judge Wilbur T. Boyle, F. A. Heidorn,
j. l.. Horsby, Virgil Harris. all of st. Louis;
William G. Gulliver. special counsel for the
United States government in the tncome-tax
cases; Alexander e. Green, of New York
The Grote Company has been represented
by s. T. G.. Smith and Thomas S. Meng.