New-York tribune., 1901-05-11
A STOCK CONTRA CT ILLEGAL.
THE APPELLATE DIVISION CONDEMNS A
SCHEME TO BEAR WHISKEY
TRUST SHARES
TRUST SHARES.

The Appellate Division OF the Supreme Court
yesterday handed down decision which deals
with the matter of compensation for tips on
Wall Street operations. The case was that of
James y. Veazey. of Cincinnati. against Henry
Allen and Edward L. Norton. In 1893 Veazey
was trying to bring about a Congress investiga-
ton Of the Whiskey Trust. He declared that he
made an agreement to give advance information
to the firm and that Allen & Co. made large
profits through selling the stock of the whiskey
Trust short he received S6237 81 as his
share of the profits. but he says that the amount
should have been much larger. and he sued for
an accounting.
The case was thrown out on the report of the
referee. The Appellate Division afirms the
judgment, and says the contract in question lis
condemned by every principle of public policy
and morality
Justice Ingraham writes the opinion of the
court, and says in part:
. There is not allegation IN this complaint that
It was understood that the defendants TO
deal IN these stocks in any other way than as pure
which they dii not have with the expectation OF
DrS in H back Ike at CHEAPER price ana e 9ne
to be obtained by purchase OF the stocks at less
price than that at which they had been sold
The Justice then reviews the testimony to
the information given by Veazey. The latter
had been a travelling salesman for a firm of
Trust had made his own business a poor one,
and after considerable effort he was able to
bring about Congress inquiry 10 the meth
DDS Of the trust. The immediate result was
fall in the price of the Whiskey Trust securities.
In view Of all the testimony Justice Ingraham
says that tbs transaction contemplated
illegal If not a criminal. combination con-
spiracy. 1t intended to procure action by
Congress which would injure the corporation
ana depreCiata the value of its securities IL
was also 4 gambling transaction. pure and
simple. the court declares
NeaZey persuaded Representative Burrows of
MlchlEan, TO Introduce a resolution providing
Tor the investigation. but he told the Congress
man nothing about the speculative contract. In
the instiGa'or prosecutor and principal witness.
Justice lngraham discusses the law in the case
and sums up follows:
1t is quite clear that the parties contemplated
mat the plaintiff should procure a legislative in
tstgatlon or this corporation by personal Soicita
non or by some other means. and having procured
Such an investigation. should push II . the
extent: and for the purpose OF maintaining a
pecuniary advantage for this legislative action, the
u't"hdat should speculate in the securities OF the
Non 10 b. divided between the parties to the ac-
ton. That this contract directly contemplated the
procurement OF legislative action b. the plaintiff
ana that the profit of the paintm
upon his success in procuring such legislative ac-
lon. is perfectly apparent. and comes directly
within the principle 10 which attention has been
every principle Of public policy and morality and
that the learned referee quite CORRECTLY refused 10
90 on with the case after the ma turc OF the CON
tract was disclosed
The Judgment is affirmed with costs HamIl-
ton Odell was the referee