The Stark County Democrat. [volume] (Canton, Ohio) 1833-1912, 1905-04-07
OPINION OF SUPREME
COURT, NORTHERN
SECURITIES
HANDED DOWN Ar WASHINGTON
BY CHIEF JUSTICE FULLER.
Decision Of the Court Below Is Sus-
tained, and the Direction Made
to Dismiss the Bill.

washington, April 3.-Chief Justice
Fuller in the supreme court this af-
ternoon handed down the opinion Of
the court in the case of Hartman
versus the Northern Securities Co,
which is voluminous document, COW
ering 10 printed pages.
In sustaining the decision of the
court below, and the order of distri-
button, the chief justice says: .
I'm the present case, complainants
seek the return Of property delivered
to the Securities company pursuant to
an executed contract of sale on the
ground of the illegality of that con-
tract but the record discloses no spe-
cial 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 public policy.
livery to complainants of a majority Of
the total Northern Pacific stock and
ratable distribution of the remaining
assets to the securities stockholders
would not only be in itself inequitable,
but would directly contravene the OBJ
ject of the Sherman law and the pur-
pose of the government suit.
hn
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 complai9ants
would tend to smother that competi-
ton.
while the superior equities, as
against complainants present claim, of
the many holders of Securities shares
who purchased in reliance on the be-
lief that they thereby acquired a rat
able interest in all of the assets of the
Securities company are too plain to he
ignored.
THE illegal contract could not be
made legal by estopel, but the own
ership of the assets, unaffected by a
special interest in complainants, could
be placed beyond dispute on their
part by their conduct in holding the
Securities company out to the world
as unconditional owner.
And, without repeating in detail
what has been already set out, it is
plain that right of rescission of the
executed contract of November IS, 1901
even if rescission could have otherwise
been sustained, had been lost by ac-
quiescence and laches at the time this
bill was filed.
EARLY in 1901, the Hill-Morgan
party held a majority of the common
stock, and had asserted the intention
to Te,ire the preferred stock without
as Mr. Hartman testified, 'affording
the holders of the preferred stock the
right to participate in any new secur-
! tiles that might be issued
With full knowledge of that intenn
tion, the proceedings of the two COM
panies followed in November, 1901 and
the absolute and unconditional sale
and purchase, as we hold the transact
tlOn 10 nave Deen.
I'VE find no evidence of any express
agreement that complainants should
be entitled to the new common stock,
but the result of the exercise of the
right Of subscription. The purchase
by the Securities company was on it's
own account and not in trust. and can
not be disturbed because of illegal
purpose at the clamor of parties in
pari delicto. And there is here no offer
of the restoration of the status quo,
if that were practicable.
Doubtless it became the duty of the
securities company to end a situation
that had been adjudged unlawful, and
this could be effected by sale and dis
tribution in cash, or by distribution in
kind, and the latter method was adopt
ed and wisely adopted, as we think for
the forced sale of several hundred mil
lions of stock would have manifestly
involved disastrous results.
I'm fine, the title of these stocks,
having Intentionally been passed the
| former owners or part of them cannot
reclaim the specific shares, and must
be content with their ratable propor-
| tion OF the corporate assets.
Decree affirmed; cause remanded to
circuit court with a direction to dis
miss the bill"
|