The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1904-05-24
ARGUMENTS CLOSE Elm
SECURITIES SUIT
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Among other things. he. said the bill
of complaint was insufficient because
It made no averment of title. The bill
violated the settled principles of equity
that the complainants were guilty of
laches and that. at any rate they
could not claim interest in new shares
OF common stock which they had never.
owned.
Mr.. Johnson was rather eaustic in
HIS references to Mr. Hartman. who
he said. became a director of the
Northern Securities company, and the
stock acquired by the Northern Sc
curities company was acquired with
the aid of Harriman's vote. The stock
held by Hartman and Pierce in the
Northern Pacific. he said, was sold to
the Northern Securities company. and
from that time Hartman could have
no possible right in it other than the
interest In common. with the stock
holders of the Northern Securities com
pany In property belonging to that
company.
Forego Their Rights.
When the Northern Pacific stock was
sold to the Northern Securities com
pany. Hartman and Pierce, with their
eyes open, forewent any further rights
in the stocks disposed of by them
Their present idea was to secure for
cific which had gone up and to leave
all other stockholders of the Securi-
ties company to- serve themselves as
best they could out of what was left
and out of what Hartman and Pierce
In their bill had claimed had depre-
ciated in value.
Mr.. Johnson read some testimony
given by Mr.. Hartman, in which the
latter stated that the negotiations for
the sale of his Northern Pacific stock
had. been conducted with J. P. Morgan
& Co. Mr.. Johnson argued that there
We're no contractual relations between
Hartman and the Securities company.
He quoted from Harriman's testimony
to show that at the time the sale was
agreed upon Hartman only knew
vaguely that the stock was to go to
a holding company, and he read Har-
riman's answers to the effect that in
the negotiations Hartman was not in
fiuenced by the fact that the stock was
to go to such a company.
Mr.. Johnson read a resolution from
the proceedings of the directors of the
Northern Securities company showing
that this stock, $37, 600, 600 common and
. SAL 10000 preferred, should be ac-
quired. by, about $92,000,000, with pay
ments in $82,000,000 of the Northern
Securities stock and by about $9,000,-
600 in cash. The purchase was au-
sthorized and this, Mr.. Johnson said,
constituted a complete sale, leaving
Hartman with absolutely no rights
with respect to the stock.
A long crOSS-fire followed between
opposing counsel and the court as to
the exact point upon which the COM
plainants based their case. Mr.. John
son insisted that the contract of Har-
riman to sell his stock was a complete
one in itself and not a continuing one,
as maintained by the compliments,
and that the obligation of the North
ern Securities company to hold the
stock of the Northern Pacific was not
one in which Hartman had any right.
This prompted Judge Bradford to
remark that he understood Mr.. john
sonsss point to be that the continued
holding of the Northern Pacific stock
by the Northern Securities company
was one of expectation by Hartman
rather than a contract. Mr.. Johnson
replied that so far as the records were
concerned there was nothing to justify
an expectation.
For the CompIainants.
Mr.. Johnson closed his argument
and was followed by w. D. Guthrie, OF
New York. for the compIainantS. Mr.
Guthrie's argument bore largely on
the line that fair Interpretation OF
the decree of the supreme court of the
United States was to the effect that
Mr.. Hartman and Mr.. Pierce were en-
titled to have returned to them the
stock of the Northern Pacific company
which they surrendered at the time OF
the consolidation. Mr.. Guthrie held
that the Northern Securities company
in the face of the decision dissolving
the company, only held the Northern
Pacific stock as custodian for the orig
inal owners.
Judge Bradford interrupted Mr.
Guthrie and asked him If he meant
that the decree in itself settled this
point. Mr.. Guthrie answered that the
return of the stock to Hartman and
Pierce was a necessary result of the
decision that the Securities company
was an illegal combination. Judge
Bradford asked If Mr.. Guthrie held
that as matter of equity pleading the
citing of the decree was sufficient. Mr.
Guthrie said that he would take this
matter under advisement with his as
sociate counsel and If deemed neces-
sary application would be made for the
amending of the bill Of complaint. The
decree, Mr.. Guthrie contended, should
be construed in the light Of the lam
guage of Justice Harlans opinion in
connection with the deciding of the
case. Justice Harlan, Mr.. Guthrie
said, had referred to the Securities
company as the custodian of the stock
of the two companies, that is, the
Northern. Pacific and the Great North
ern.
Judge Bradford asked if the decree