The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1900-04-29
HILL NAMED AS RECEIVER
Every Contention of the Trust Sus-
tanned by the Court.
QUESTION OF TRUSTS IS NOT DISCUSSED
Judge Simonton Thinks Maj Guthrie's Inter-
view in the News and Observer Was
Threat That Was Calculated to En-
danror Tho Good Will of Co
danger the Good VIII Of Co.


The decision of Judge Simonton in
the Blackwell Durham Tobacco Com
pany case was received here yester-
day.
1t is in favor of the Trust on every
point--maIing the receivership per-
manent and ordering the sale of the
property.
This is suit, it will be remember
ed, brought by officers, directors and
employees of the American Tobacco
Company, who are also large stock
holders in the Blackwell Company. to
have a receiver appointed for the
Blackwell Company and close up its
business.
The suit was against Blaclwell's
Durham Tobacco Company and the
minority stockholders in it, and was
based on an interview with Mai. VIM.
\. Guthrie, one of the minority stock
holders. published in the News and
Observer some months ago. In this
interview Major Guthrie declared his
intention to ask the Legislature to re-
peal the charter of the Blackwell
Company on the ground that it was
trust.
AS soon as the interview appeared
the president. yice-president. secreta-
ry, treasurer and several directors and
employees of the American Tobacco
Company went before Judge Simonton
at Charleston and asked that 4 re-
ceiver be appointed. The petition was
granted and F. S. Hill. secretary of
the American Tobacco Company. was
named as temporary receiver, and
April 18th at Charleston was fixed
as the time for hearing argument as
to whether the appointment of the re-
ceiver should be made permanent.
The case was duly argued at the
time set. The opinion of the court
rendered yesterday makes the receiv-
ership permanent and orders sale of
the property. The opinion is quite a
long one, making seventeen typewrit
ten pages.
The first ten pages reviews the bill.
setting forth the facts in the case and
stating the reasons why the court
should intervene and grant the relief
prayer for Two pages are deyoted
to Maj. Guthrie's answer and the con-
tentiOns therein.
On the issues thus raised Judge ST.
monitor delivers the following opin-
ion:
The Blackwell Durham Tobacco Com
pany is solvent going corporation. Can
this court under the circumstances stated,
appoint a receiver for this corporation
and take proceedings looking to its final
dissolution?
The general rule as laid down by text
writer's is that the general jurisdiction of
equity over corporations does not extend
to the power of dissolution of the cOrpo-
ration or to the winding up of its affairs,
sequestrating the corporate property and
effects and in that connection appointing
a receiver, unless such jurisdiction is eX-
pressly conferred by statute. (Beach on
Modern Equity Juris. sec. 967. Cook on
stockholders vol. ], sec. 629).
The reason of the rule is stated in Re-
publican Mountain Silver Mines VS.. Brown
ct al. 10 L. S. Appeals 209; C.C.A. 412:
"A court Of equity, however, has no
power to interpose it's authority for the
purpose of adjusting controversies that
have arisen among the shareholders or
directors OF q corporation, relative to the
proper mode of conducting the corporate
business, as it may do in case of a SINH
lar controversy arising between the mem
bers of an ordinary partnership. Corpora
lions are in certain sense legislative
bodies They have a legislative power
when the directors or shareholders are
duly convened that is fully adequate to
settle all questions affecting their bust
ness interests or policy, and they should
be left to dispose of all questions of that
nature without applying to the courts
for relief. shareholder in a corporation
cannot successfully invoke the power of
chancery court to control it's officers or
board of managers, or to wrest the cor
porate property from their charge through
the agency of a receiver, so long as they
neither do nor threaten to do any
fraudulent or ultra wires acts. and so
long as they keep within the limits of by
laws which have been prescribed for their
governance. If in either of the cases last
specified shareholder is nevertheless dis
satisfied with the business policy that is
being pursued or the methods of corpo-
rate management, he must seek redress
within the corporation, in the mode pre-
scribed by its charter and bylaws, rather
than by an appeal to the courts"
But this statement of a general rule
does not meet the question made in the
bill upon the circumstances admitted in
the answer. This is not: an application
to stop a going corporation in a success
full career, wind up it's business and dis
tribute its assets among the corpora
Continued on Tenth Page)