Evening star. [volume] (Washington, D.C.) 1854-1972, 1905-04-03
Opinion in the Merger Case
Handed Down.
FORFEITURE OF RIGHTS
ISSUANCE or MANDATE SET FOR
THE nth.
View Of the Supreme Court in the Cele-
brated Hartman Suit Given
by the Chief Justice.

In the Supreme Court of the United
States today the chief justice handed down
the opinion Of the court in the case of
Hartman against the Northern Securities
Company, the decision in which case was
announced several weeks ago. The motion
for the immediate issuance Of the mandate
was denied. the date for issuance being
fixed for April IT,
The Supreme Court of the United States
today announced its opinion in the decision
rendered several weeks ago in the Northern
Securities case. The court amended its
decree by directing the Circuit Court to dis
miss the bill and announced that the man
date would be stayed until April II.
1t was the understanding among lawyers
at the Capitol that this staying of the mani
date had no particular significance and was
sci to read the, opinien.- It is not expected
that any motions will be made for a rehear-
Ing, as the court was unanimous in Its
decision and the general belief is that the
Northern Securities trust has now ceased to
be an object Of litigation.
Chief Justice Fuller's Opinion.
Chief Justice Fuller filed the opinion OF
the court. The opinion goes at great length
into the history of the celebrated suit by
which the government destroyed the con-
templated merger of the two trans-conti-
mental trunk lines. The opinion closes in
these words:
I'm the present case compliments seek
the return of property delivered to the Sc
curities Company pursuant to an executed
contract of sale on the ground of the lille
gality Of that contract, but the record dis
closes no special considerations of equity,
justice or PUBLIC policy which would justify
the courts In relaxing the rigor of the rule
which bars recovery. The circuit court
DEGREES, and the action of the Attorney
General of the United States put at rest
any question that the ratable distribution
resolved upon was in violation of the pub
lie policy
and it is clear enough that the delivery
to the complainant of majority of the to-
tai Northern Pacific stock and a ratable
distribution2of the remaining assets to the
other Securities stockholders would not
only be in itself inequitable, but would di-
rectly contrarene the object of the Sherman
law and the purposes Of the government
suit. The Northern Pacific system, taken
in connection with the Burlington system,
is competitive with the Union Pacific sys-
TEN. and 1t seems obvious to US. the entire
road considered, that the decree sought by
compliments would tend to smother that
competition. while the superior equities
as against the compliments present claim
of the many holders of Securities shares
who purchased in reliance on the belief
that they thereby acquired a ratable inter-
est in all Of the assets of the Securities
Company are too plain to be ignored.
Forfeiture of Right.
"The illegal contract could not be made
legal by estoppeI. but the ownership of the
assets unaffected bys g. special interest in
compliments could be placed beyond dis
pute on their part by their conduct in hold
ing the securities company out to the world
as unconditional owner, and without repeat
ing in detail what has already. been set
out, it. is plain that right of rescssion of
the executed contract of November Is, 1901,
even if RECESSION could have other been
sustained, had been lost by acquieScence
and laches at the time this bill was filed.
1--WE regard the contention that complain
ants are exempt from the doctrine in pari
delicto, because the parties acted in good
faith and without intention to violate the
law as without merit.
with knowledge of the fact and of the
statute the parties turned out to be mis-
taken in supposing that the statute would
not be held applicable to the fact. Neither
the other and the defendants secured no
unfair advantage in retaining the consid-
Grafton voluntarily for the price agreed.
Object of the Bill.
perhaps it should be noted that the bill
sought the return of two parcels of North
ern Pacific common stock, the shares de-
livered to the securities company and the
shares received from the Northern Pacific
Company on the retirement of the first
stock Early in 1901 the Hill-Morgan party
held majority of the common stock and
had asserted the intention to retire the pre-
ferred stock without, as Mr.. Hartman
testified, affording the holders of the pre-
ferred stock the right to participate in any
that might he issued. With
full knowledge of that intention the pro-
ceedings of the two companies followed on
November l., 1901. and the absolute and
unconditional sale and purchase, as We
hold the transaction to have been.-
|. 1--WE find no evidence of any express
agreement that compliments should be en-
titled to the new common stock, and 1T was
certainly not the atural increase OF the
old stock, but the result of the exercise OF
the right of subscription. The purchase by
the securities company was on It's own ac-
count and not in trust, and cannot De dis-
turbed because of illegal purpose and the
ciamor of parties in pari delicto and there
is here no offer Of the restoration of the
status quo if that were practicable Doubt
less it became the DUTY OF the securltles
company to end "a situation that has been
adiudeed unlawful, and this could be eff
fectsd by sale and distribution in cash or
by distribution in kind, and the latter
method was adopted, and wisely adopted,
as we think. for the forced sale of several
hundred millions of stock would have mani
testify involved disastrous results.
'In fine. the title to these stocks having
Intentionally, been passed the former own
ers or part of them cannot reclaim their
specific shares and must be content with
their ratabIe proportion of the corporate
assets The decree Is affirmed, and the
cause remapded to, the circuit court with
direction to dismiss the BILL
Pleads Guilty of Larceny.
James O'BFien pleaded guilty to the