New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1902-04-04
TOBACCO TRUST IN COURT,
PLAINTIFF CHARGES FRAUD - NlCOI1L
TELLS OF NEW FORM OF LEGAL
ADVENTURE.

4
! Court yesterday by Coudert Brothers, attorneys
| fer Charles c. Davis. who has brought suit
| against the Consolidated Tobacco Company the
American Tobacco Company. the Morton Trust
| Company and other defendants to recover 4VV
| shares of the common stock of the American To-
bacco Company, to vacate two orders mace ps hii'
| the motion of the defendants to the SUIT lof
| the examination of Davis as to the persons asso-
ciated with him in the action and for the exafnhd
| ton of Harry and Waiter Content touching the
persons who the real owners of the american
| Tobacco Company's stock, which Davis claims 10
| own and for the production of all the books ana
| papers of the firm of II. Content IL 90. WHICH
| could throw any light upon the matter
After extended argument by De Lancey -NlcoLI'
who appeared for the defendants, and by +. H.
Coudert IT, representing the Davis and Content IN
terests. Justice Greenbaum said that ne od not
wish to act hastily. and would therefore give couh-
sci until Saturday hand up briefs
Mr. Nicol said that Davis was merely paper
plaintiff, having real interest in the suit anu
that his stock was owned by few persons repre-
scented by II. Content e. Co, who had comp1ed 10
acquire the small remnant of the American To-
baccos stock outstanding. and who had &C
quired Davis's stock and put him forward us d
plaintiff in the suit 1t appeared from the al
fdavits Mr. Ncoli continued, that Davis was
travelling salesman who formerly in the
employ of the American Havana Tobacco" COM
pany He was a man of means, having been
adjudcated bankrupt on May IA. l9H ana uls-
charged in October of that year.
PURCHASES FOR DAVIS.
Mr. Nicoll said that Davis, in June, 1901. having
a balance of $3.50 with Rolston & Hooley. stock
brokers. gave them 500 more, and ordered them
to purchase for his account 400 shares OF the
American Tobacco Company's common stock Oh
the par value of so Rolston & IIooley executed
the purchase but no stock ever transferred to
Davis on the books of the company; no certificates
were ever issued him, and he was never
stockhoder OF record. declared the lawyer
All the holders. of the stock of the American To-
ton of the holders of 1851 shares out of total
issue 100000 shares, had deposited their STOCKS
with the Morton Trust Company and received Ger
ticates of deposit for them. Mr.. Nicoll continued
BY January q 1902. more than "a per cent OF All
the bonds called for by the certificates OF deposit
had delivered the hoLcrs OF the certllcates
and had been actually accepted by them, so thit
less than per cent in amount OF such certlhcateS
were still outstanding on that date, upon wlich
the bonds had then been actually delivered ana
accepted Among them the Davis certhca'e
II. Content * Co. who had not been stockholders
in the American Tobacco Company about January
10 1902 became active bidders on the Ne"-f9rk
stock Exchange for the remnant of about twelve
thousand shares of the common St3Gh 81 me
deposited with the Morton Trust COMPANY and. as
result ths prize ON the n'4 th fHTrning com
mittee OF the Exchange struck from the list the
SAID HE WAS DEFRAUDED.
Davis began his suit last February. hasins it on
the ground that he had been defrauded
Mr.. Nfcou said that the afidavts on which
Justice Greenhaum's orders had been granted al
legged that he persons behind Davis and II. Con
tent q Co. We're entirely familiar with The earn
ings Of the American Tobacco Company and me
Continental I"1accn Hdi'pa tiI; tbc,, %onId not
ailege hat they had been deceived In any W.! .h
case were simply that the directors Of the Ameri-
can Tobacco Company combined mat SonpamyI
no1q to AXE over the stock Of the companies
Information which they had az 20 NE eh%
would accrue from the repeal Of the war tax ana
from other trade conditions. they sent out letter
to the stockholders oneTnE men, uou , ~ ~
holding company in exchange Tor jhSir s,oSK Snd
his per shares for double their par EaI4c
in per cent bonds ana thnt a. IRee the
"The question is Mr.. Coudert went on. whether
directors are licensed to conceal information IN
regard to the business Of the company IRON Inc
and despon them Now. like cuttlcish. they come
into court and seek 10 cloud AMI obscure IN
court 10 harass and the plaintiff IN this
justice Creenbaum remarked that he was IN
cl!ned to deny the motion to VSfate me ofGeF rms,
action form Of legal adventure which
was becoming popular Mr SouGeTI reIoriTd tn@.
in which the President Of he United States was
engaged in in the Northern Securities suit.
NEW FORM OF ADVENTURE
In describing what he meant by the new form
of legal adventure Mr.. Nicon said that it was
becoming a rather common thing for groups OF men
TO start litigation similar to this. He continued:
What means are necessary for those who engage
i'm such enterprise?
First-They must have a moderate sum Of money
in order enable them to acquire tho few out
standing shares which for one reason OF another.
have accepted the terms to which the great
m iOrity have asSented.
SeCOnd-IStCaUSe they cannot auOrd. Tor various
reasons, appear IN their proper persons and
under their names, they procure firm of
brokers to purchase fer them ana with their own
money the small number of shares outstanding.
Third-They must then find convenient plaintiff
one so situated viii enable them put him
forward as a wrOnged and injured sutton who is
entitled audience in court of equity.
Fourth-And they must find some lawyers, the
reputable the better. whom they able
o persuade that a great wrong has been done.
These arrangements having been made, little
combine equipped for its work. and notice of
its existence is served upon the managers of the
combina ton by the service of summons and
complaint: or better still. by procurement of pre-
liminary injunction or other summary remedy. tn"
combine enters the field Of litigation with conf
tereStS of the promoters to quiet the litigation at
almost any price. for they believe that if any
Spouse comes from the other side great injury may
ensue and the structure now in course of erection
may tonpc TO pieces
Mr. Ncoll said Yesterday afternoon that he knew
the people behind Davis-English capitalists with
New York allies-but they miscarried their
"devilish good business. and to their great
prise ne carried the fight into their camp. and
now they will have to into the open and
show themselves"
AIMED PARTY 4 Fact.