New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1905-05-27
A HYDE TRUSTEESHIP.
THE ONLY MUTUAL" HOPE
Decision in Lord Equitable Salt a
Victory for Stockholders.

.,yor % Franklin s. Lords sppncation for an In
sanction restraining the Equitable from becoming
.,rsutuslzed." recently planned, II was declared
last night that the only way in which part rnu-
.rsHzation could be effected would be through
a. Hy6es placing his stock majority in the hands
- trustees. with power to vote for portion OF
-. directors which Mr.. Hyde might indicate, and
a. the ether portion might be designated by the
voIcyholoeFs or oy a proxy committee OF national
rspuznon
for example. Mr.. Hyde would have the right to
-, his stock in the hands OF trustees under a
Isn 70 be outlined in trust agreement whereby
sTcyhoders might vote for. say, twenty-eigh. d.
.ssors and SIr. Hyde for the remaining twenty
fegr
This it is said. would be effective regardless OF
s present. litigation. and the majority of the stock
~ HYDE now controls would have right TO con-
+,ol IL that way. in any other.
This n fne. is the plan outlined by supporters OF
~ Evde conditional. probably. the resigna-
,,rs Of President Alexander and Gage E. Tarbell.
T-,s decision is considered a striking victory for
~ 8vde g sweeping defeat for naturalization, and.
- rstaiued by the Appellate Division will appar-
-, -,aks naturalization impossible without the
,7nssrt Of every share o: the stock. the decision
bs,nr that the majority cannot consent away the
,pbts Of the minority. Already, it is said. the
re, COMMITTEES is redrafting its report in the
light Of the decision
POINTS IN THE DECISION.
According 10 the Hyde faction the following
we're points in the decision:
Thai The scheme Of part naturalization is CON
tra-y 70 the State and federal constitutions on
Two eo~TSt II violates the obligations imposed by
oonfract between the stockholder and the COM
pany the time the stock was issued pecaIss ~,
deprives him Of his right TO vote for a! the nIog
two directors, which was reserved to him as part
O ss1co no the Hight of the stock control
ne corporation 10 the exclusion OF every other
interest is gssSs' Wiz ta right woad Violate
provision OF the Consti ~, ma ,I1t An.
T+i5s Maddox holds that the right TO the
asement and control Of the corporation, which
6 vested IN the stock is property right ihhefen'
The effect Of The decision is to render Impossible
any action by the directors or even by the stock
holders unless every stockholde- consents or by the
legislature itself which would affect the present
right Of the stock 70 control =, -.
The right reserved in the CHARTER by thFee-
fourths vote Of the directors 10 permit the policy
holders Of SSgo 9a 3or the reoson hat at the
;iroe The charter was fled g life insurance COM
sgy could he 2s11 o 4o 6 include e fh9ch The e0 eq
tny right to policyholders to vote in any event
Nr Lord in his injunction sought to restrain the
T-oyitsble from becoming ''rnutualzed" under the
Man recently adopted by the board Of directors
-rbe,etr the hoard contemplated giving the policy
holders the right 70 elect twentyeight Of the fifty
two directors and permitting the stockholders to
elect only tVenty-four.
Justice Maddox grants all Mr.. Lord asks in the
way OF restraining the Attorney General from
sng the Superintendent Of Insurance from fling the
new charter.
I have been able TO read Judge Maddox's opin-
son only hUrriedlv said Mr.. Lord. but II appears
10 sustain the contentious of the plaintiff and the
stockholders who interviewed as defendants and
holds explicitly that the right Of stockholder TO
vote his holdings is a property right, and that
the contemplated change of the charter by the
Equitable would deprive the stockholders of prop
erry~
Several lawyers said that il was a sweeping de-
cison in favor Of the stockholders and that 1t
appeared 70 prevent naturalization except by an
unanimous vote Of the stockholders
II vas taken for granted that the decision would
be appealed TO The higher courts
Mr.. HYDE has already offered TO put his stock in
the hands Of trustees. TO be voted for directors
under the former charter plan. This can be done
without the consent Of the other stockholders who
could preserve their property rights in the stock
as outlined BY The court. and as they pleased
il is understood that the Equitable has between
taSa@fo and $4,000 coo invested in railroads banks
insurance and trust companies. In the main body
of the petition for leave intervene in the Lord
suit, Messrs Hyde and Mcintyre. trustees OF the
Hyde stock. say:
i It shall be determined by this court that by
reason OF the constitutional other objections
urged by the minority stockholders the right "a
vote Tor directors OF the society cannot be taken
rom the stockholders and transferred to the policy.
ere stir I 81 PioPosGo S1Er Pelluohers
arrangement made with the board of directors pu--
charter.
TO that end they are willing that the majority Of
ihe stock shall he transferred for a term of vea-e
q trustees with power to vote for twenty-eght
directors as determined by the Policyholders, and
mated by your petitioner, Hyde, subject the ar
Tangement Of details and conditions.
Jacob u. SchiT authorized a denial OF a printed
Statement that William Nelson Cromwell had been
retained by him in the Equitable controversy
Ar. HYDE il said by of his supporters
last nght. is perfectly willing that with the ex-
ception II some 100000 the Equitable surplus
snail be distributed among the policyholders
Senator Depew was quoted saying If Justice
Maddox thought. as some Of contend" tina
three-ff1hs vote Of the stockholders would be
Sufficient 10 amend the charter, we could call
meeting ~ the stockholders and still pass the
amendments