New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1907-07-03

be worse off than at present. OF the capital
he says:
The capital, surplus and undivided profits of the
Equitable Trust Company aggregate $1S.H2n7 90
According to the proposed merger agreement, $1,000
600 Of the capital stock be retired in order to
effect the merger 1t understood that the retire
n;ent OF such stock assured by the announced in
ten'ion Of the Equitable Life Assurance Society to
retire 100000 OF stock which it holds. The
payment for the stock thus retired will diminish
the aggregate capital and surplus above mentioned
in the sum of S350Oo1 For the Purposes OF the
merger. therefore. the capitalization of the Equta
mately 100000
He closes his decision by saying
The examination which the court has sub
jected the proposed merger has been especially
close. and the structures which il has made upon
II have been particularly definite. because Of the
close INTERPOLATION of the defendant corporations
having nine directors in common and also because
OF the virtual domination of both corporations by
single stakeholder, the Equitable Life Assurance
Society Under the authority of the decisions above
mentioned II is the duty II court of equity under
sucn circumstances TO scrutnize with vigilant
a contract between TWO corporations. especially
When the contract has the effect OF cxtingulshing
me me corporate lie OF ore OF the contracting parties
The court IS not convinced that the proposed
merger agreement was conceived in fraud.
hot prepared 10 say that the agreement is one
which, If entered into b. two corporations not so
inter-related as the defendants, dominated by a
single interest, would necessarily, and matter
able. ---' - " &c '''' ''''' ''''-
II holds, however. that under all the crcum-
stances here presented agreement is proposed
which Is so unfair TO the interests OF the plaintiff
and his fellow stockholders that court Of equity
may wen hesitate before denying q prayer for in
terposition
ANOTHER PHASE OF MERGER.
Another phase Of the merger suit came up on
Monday before Justice Platzek when Charlew w
Morse obtained an injunction until further order
OF the court restraining any further action the
proposed merger. By consent OF counsel the APP
plication of Mr.. Morse TO have his order con-
unued Went until the August term of the
court.
Louis Marshall. Of Guggenheimer Untermyer
q Marshall, said that the chief point raised by
his client against the proposed merger was as to
the power Of the Equitable Life Assurance So
ciety to consent TO the merger as II would con-
stitute an investment OF its funds under the pro
visions OF section 100 Of the insurance law rs
amended by the act Of 1906 This section he
said, prohibited any insurance. company after
June l, 1906 from investing IN stock or bonds !
OF any corporation other than a municipal COR |
poration. The merger, he said. would constitute !
the organization of a corporation and the |
Equitable Life would be without authority to i
make an investment In the securities OF such a |
corporation.
He added that he would contend that there !
was no power under the statutes Of New YORK |
empowering these two trust companies to con- |
sclidate. as they were not organized under the |
banking law and not corporations organ |
lied under any special act Of tho Legislature I
within the meaning of Section "a Of the bank
ing laws
1t was announced that appeal would be
taken from Justice Blanchard's decision to the
Appellate Division in October
Mr.. WINS said last evening regarding the de-
cisioD for his client:
The decision OF the court proceeds upon the tho
DRY, hrSt, that the proposed plan of merger itself
is unequitable and improper. and. second that in
asmuch as the same parties have control of both
boards there is an added reason for permitting
the actual extinction Of company for the beue-
1T Of the other the hands of a body Of men who
constitute a virtual majority OF directors in both
boards and Will remain in control OF the joint
sets acquired by the new company, but at the
Of the extinction Of one OF the merged companies
and of the entire sacrifice of its goodwill. well
as the sacrifice 20 its shareholders of large part
Of the value of their property.