The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1905-04-04
DECISION IN THE
HARTMAN CASE
Opinion Handed Down by Chief JUS
tice Fuller.
BILL ORDERED DISMISSED
CONCLUSIONS ARRIVED AT BY
THE COURT.

Washington, April 3.-In the supreme
court of the United States today the
chief justice banded down the opinion
Of the court in the case of Hartman
vs.. The Northern Securities company
the decision which was announced sew
eral weeks ago. The motion for the i'm
mediate issuance of the mandate was
denied the date for issuance being fixed
for April Is.
After stating the case at length, the
chief justice said:
In the present case compliments
seek the return of property delivered to
the securities company. pursuant to an
executed contract of sale or the ground
of the illegality of that contract, but
the record disclOses no special con-
Elderations Of equity, justice or public
policy. which would justify the court
i'm relaxing the rigor of the rule which
bars a recovery. The circuit court de-
creeS and the action of the attorney
general of the United States puts at
rest any question that the ratable dis
tributiOn resolved on was in violation
of public policy, and it is clear enough
that the delivery to compliments of a
majority OF the total Northern Pacific
stock and a ratable distribution of the
remaining assets AtO the other Securi-
ties stockholders would not only be in
itself inequitable, but would directly
contTavene the object of the Sherman
law and the purposes of the govern
ment suit.
Would Smother Competition.
The Northern Pacific system. taken
in connection with the Burlington sys-
TEN. is competitive with the Union
Pacific system and it seems obvious TO
US, the entire record considered. that
the decree sought by complanants
would tend to smother that cOmpeti-
ton.
While the superior equities. as
against compliments present claim of
the many holders of securities shares
who purchased in reliance on the be
lief that they thereby acquired a rata
bic interest in all Of the assets of the
securities company, are too plain TO be
ignored.
The illegal contract could not be
made legal by estoppeI but the owner
ship of the assets, unaffected by a
special interest in complainants. could
be placed beyond dispute on their part
by their conduct in holding the Sc
curities company out to the world as
unconditional owner. And. without
representing in detail what has been
already set out it is plain that right
of recession Of the executed contract Of
Nov. IS. 1901. even if recession could
have otherwise been sustained. had
been lost by acquiescence and laches at
the time this bill was filed.
Legion or Holders.
since the transfer of that date Sc
curities stock had passed into the
hands of more than $500 holders. many
of them in Great Britain. France and
other parts of Europe. nearly a year
after the filing of the government bill
-. 900 shares were sold for cash. com
plainant Hartman concurring, some
months after. Hartman and Pierce and
the Oregon Short Line company pledged
their S24, 900 shares to the Equitable
Trust company. Notwithstanding the
degree Of April Q. 1908. they stood on
their rights ~ shareholders, and il was
not until after March %. 1894 when
defendants board of directors re-
solved upon distribution that complain
ants undertook 70 change an election
also pronounced to be irreversibIe
in itself in view of the rights Of 9TH
ers- We regard the contention that
complaints are exempt from the doc
trine in parti delictO because the par
ties acted in good faith and without in
tention to violate the law as without
merit With knowledge of facts and of
the statute the parties turned out TO
be mistaken in supposing that the
statute would not be held applicable to
the facts.
Ignorance Excuses No Man.
Neither can plead ignorance of the
law as against the other, and defend
ant secured no unfair advantage in .
tanning the consideration voluntarily
delivered for the price agreed. With
full knowledge of that intention the
proceedings of the two companies fol-
lowed in November, 1901 and the abso-
Lutte and unconditional sale and pur-
chase. as we hold the transaction to
have been. We find no evidence of
any express agreement that complain
ants should be entitled to the new
common stock. and it was certainly not
the natural increase of the old stock.
but the result Of the exercise of the
right of subscription. The purchase by
the securities company was on its oWu
account and not in trust, and cannot
be disturbed because Of illegal pur-
pose at the ciamOr of the parties in
parti deicto. And there is here no
offer of the restoration of the status
quo if that were practicable. Doubt
less il became the duty Of the securi-
ties company to end Situa ton that
had been adjudged unlawful and this
could be effected by sale and distribu-
ton in cash or by distribution i'm kind
and the latter method was adopted and
wisely adopted. as we think. for the
forced sale of several hundred thouS-
and shares of stock would have mani
testify involved disastrous results. In
fine the title to these stocks has in
tentionally been passed, the former
owners or part of them cannot reclaim
the specific shares and must be content
with their ratable proportion of the
corporate assets.
Decree affirmed; case remanded to
circuit court with a direction 10 dis