State v. American Cotton Oil Trust

40 La. Ann. 8

• Court: Supreme Court of Louisiana
• Decided: January 15, 1888
• Docket: No. 10,016
• Status: Published

Opinion

The opinion of the Court was delivered by

Fenner, J.

The State is appellant from two judgments, with which the main defendant in the case has no concern, and which are exclusively in favor of a subordinate defendant, the firm of Glenny & Violett. The first judgment is one dissolving the preliminary injunction, in so far as it concerned Glenny & Violett, and the second is one maintaining their exception of no cause of action and dismissing the suit as to them. A similar exception interposed by the American Cotton Oil Trust was overruled and the case, as to it, must pass to • trial on the merits in the court below. The Oil Trust is not a party to this appeal and it is important that we should not trench upon the merits of its important controversy with the State further than the necessities of the case before us absolutely require.

The suit, as against the Oil Trust, has a two-fold object; first to restrain it from carrying on business, violating as is alleged, the Constitution of the State; secondly, to have it adjudged guilty of unlawfully usurping the franchises and privileges of a corporation without being duly incorporated.

Amongst other things, the petition alleges that the Oil Trust “has issued some $34,000,000 of stock certificates and has sold or exchanged the same for property less than $10,000,000 in. value.”

The solitary allegation connecting Glenny & Violett with the matter is the following: “That Glenny & Violett, a commercial firm domiciled and doing business in the city of blew Orleans, are engaged in selling and dealing in so-called shares of stock issued by the said American Cotton Oil Trust.”

This allegation does not import that, in their dealing, Glenny & Violett act, in any manner, as the agents of the Oil Trust, or that they enjoy any exclusive privilege of selling and dealing in these certificates, or that they are doing anything which any number of other persons may not also be engaged in doing.

We are at once confronted with the inquiry as to how the purposes of the State in this suit are to be advanced by enjoining G-lenny & Violett from dealing in these certificates, while leaving all the rest of the world at liberty to do so.

But a still more pertinent suggestion presents itself, which is this : If, as alleged, these certificates have been taken as the price or in exchange for $10,000,000 of property transferred to the Trust, then, whatever be tlieir validity and effect as shares of stock, whether or not they confer on the holders the privileges of corporate stockholdets, and whether or not they confer any right to participate in the carrying on of any illegal business — yet, they undoubtedly do represent an interest in tbe property referred to and, as such, have a legal and real value, and we cannot understand bow such property rights can be placed hors de commerce by an inj unction.

Judgment affirmed.