The sun. [volume] (New York [N.Y.]) 1833-1916, 1907-07-03

ho,der Begins suit for same
sunreme Court Justice Blanchard granted
ros,erday abe application OF bainorldge
Eolbv for an injunction pending trsai
,cs, aiming tho Equitable Trust company
80 ,bo Mercantile Trust Company from
'oLi,g any further steps toward completing
nr,rosed merger. Colby applied Tor the
i,i,nc,iop IA a stockholder OF the Equitable
Trust Company
Cnincident with the decision OF Justice
p,a ,,hard. Thomas ID. Adams. as counseI
e., rbarles W. Morse and others on behalf
81 ,he EQUITABLE Life Assurance society
st.,insd an order from Justice Platzek
lu.c,ing the Eauitable Life. the Equitable
ia, COMPANY and the Mercantile Trust
r,r,,anv 10 show cause why they should
80, he restrained from taking any further
,,,,s in the merger Of the two trust COM
no ri.s and restraining the Equitable Life
tr,m voting az any meeting Of the stock
bol1.r- IN favor of approving the agree
,nc. The order. which was obtained
,'s, h.fore noon. was made returnable at
- ,,clock in the afternoon before Justice
DAYTON in Special Term. Part H. supreme
Court.
When the case came up II was agreeu
tv consenr of counsel that an Adjournment
no taken 10 the August term OF the court
|, WAS Said that the ruling OF Justice bmn-
,bsrd would necessarily be followed. out
,h,, counsel for Morse n the Equitable
life had some new points TO raise. Inc
,ro,,sed merger will No held up at least
until October.
Iouis Marshall, of the firm OF Guggen-
toimer Intarmyer 4 Marshall. appeared
"a. one Of the counsel for Mr.. Morse. lie
,rc,sd that the Equitable Life Assurance
hoc,ety had no power to consent TO the
merger. as it would mean an investment
&C. ia funds contrary TO the provisions oil
Tho amended insurance avs of last year.
1bs section. Mr.. Marshall stated. prohibits
r, ,nsurance company from investing
IN stocks or bonds Of any corporation other
Than a municipal corporation. The merger,
Ie aid would constitute the organization
uf a new corporation.
Mr. Marshall said that he would also
contend that the statutes of New YORK
do MOI empower these two trust
- consolidate. as they were not organized
un1er the banking law and we're not corpo-
ra,,ons organized under any special act
-, The Legislature within the meaning
If he section Of the banking law covering
We shall argue the questions on the
hearing of the motion to continue our tenn
rorary Injunction" said Mr.. Marshall.
Tin order that we may get our record in
troper shape 10 go to the Appellate Di-
vision. expect both our appeal and that
of The trust companies in the Colby case
will be submitted contemporaneously TO
rho APPELLATE Division. Our injunction
- - fo-.o .,nt1 N AantaiAn has
been rendered on our application 10 con-
time the injunction pending the trial OF
In granting the injunction on the Colby
application Justice Blanchard said:
The plaintiff and his fellow stockholders
sye promised no more than their investment
has earned while in their own control and
that promise is made payable In earnings
based upon expectations rather than upon
gxperience The consideration Of this ex-
change Of earnings. based upon past per-
fotmances for an equal amount OF earnings,
is based only upon future contingencies. The
stockholders Of the Equitable Trust Company
are further asked 10 give over the complete
control which they now exercise over their
investment to a new corporation in which
they will he in hopeless minority, outnum-
Tered two 10 one. IL is not difiCult for the
court 10 perceive that the latter end of the
stockholders Of the Equitable Trust Company
may IN such event be worse than their present
condition.
Justice Blanchard further says that
both companies are virtually controlled
Nv the Equitable Life. "A single shareholder,
and that unless the status quo be preserved
the relief desired by the plaintiff n which
he may prove himself entitled to at the
trial would be lost by reason OF the merger
and the extinction Of the Equitable Trust
Company.