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"Whereas, this company has issued, and there are now outstanding, 3,954,000 shares of its own capital stock; and
"Whereas, this company desires and intends to comply with the decree in the said suit, fully and unreservedly, and without delay:
bination or conspiracy in restraint of trade | 193 U. S. 197, 48 L. ed. 679, 24 Sup. Ct. and commerce among the several states; Rep. 436. that the Northern Securities Company, its March 22, 1904, the board of directors of officers, agents, servants, and employees, be, the Northern Securities Company adopted and they are hereby, enjoined from acquir- the following preamble and resolutions: ing, or attempting to acquire, further stock "Whereas, in the course of its business, of either of the aforesaid railway com- this company has acquired, and now holds, panies; that the Northern Securities Com- 1,537,594 shares in the capital stock of the pany be enjoined from voting the aforesaid Northern Pacific Railway Company; and stock which it now holds or may acquire, 1,181,242 shares in the capital stock of the and from attempting to vote it, at any meet- Great Northern Railway Company; and ing of the stockholders of either of the afore- "Whereas, in a suit brought by the United said railway companies, and from exercising, States against this company, the said railor attempting to exercise, any control, direc-way companies, and others, this company tion, supervision, or influence whatsoever has been enjoined from voting upon the over the acts and doings of said railway shares of either of the said railway comcompanies, or either of them, by virtue of panies, and each of the said railway comits holding such stock therein; that the panies has been enjoined from paying to Northern Pacific Railway Company and the this company any dividends upon any of the Great Northern Railway Company, their shares of such railway company held by this officers, directors, servants, and agents, be, company; and and they are hereby, respectively and collectively enjoined from permitting the stock aforesaid to be voted by the Northern Securities Company, or in its behalf, by its attorneys or agents, at any corporate election for directors or officers of either of the aforesaid railway companies, and that they, together with their officers, directors, servants, and agents, be likewise enjoined and respectively restrained from paying any dividends to the Northern Securities Company on account of stock in either of the aforesaid railway companies which it now claims to own and hold; and that the aforesaid railway companies, their officers, directors, servants, and agents, be enjoined from permitting or suffering the Northern Securities Company, or any of its officers or agents, as such officers or agents, to exercise any control whatsoever over the corporate acts of either of the aforesaid railway companies. "Fourth. The capital stock of this comBut nothing herein contained shall be con-pany is hereby reduced to three million nine strued as prohibiting the Northern Securi- | hundred and fifty-four thousand dollars ties Company from returning and transfer- ($3,954,000), and shall hereafter be three ring to the stockholders of the Northern Pacific Railway Company and the Great Northern Railway Company, respectively, any and all shares of stock in either of said railway companies which said the Northern Securities Company may have heretofore re-stock shall be accomplished by each holder ceived from such stockholders in exchange for its own stock; and nothing herein contained shall be construed as prohibiting the Northern Securities Company from making such transfer and assignments of the stock aforesaid to such person or persons as may now be the holders and owners of its own stock originally issued in exchange or in payment for the stock claimed to have been acquired by it in the aforesaid railway companies."
The case was brought to this court, and March 14, 1904, the decree was affirmed.
"Resolved, In consideration of the premises, it is declared necessary and desirable for this company so to reduce its present stock as will enable it, without delay, in connection with such reduction, to distribute among its shareholders the shares of capital stock of said railroad companies held by it.
"Resolved, That the board of directors of this company hereby declares it advisable that article (4th) of this company's certificate of incorporation be amended, so as to read as follows:
million nine hundred and fifty-four thousand dollars ($3,954,000), divided into thirty-nine thousand five hundred forty (39,540) shares of one hundred dollars ($100) each. Such reduction of capital
of outstanding shares of this company's stock surrendering to the company, for retirement, ninety-nine (99) per centum of the shares held by him.
"Upon the surrender to this company, by any shareholder, of the entire number of shares, and parts of shares, of this company's stock, which he is hereby required to surrender, this company will assign to him, for each share so surrendered, thirtynine dollars and twenty-seven cents ($39.27) of the stock of the Northern Pacific Railway Company, and thirty dollars and seven
of the Great Northern Railway Company, to and amongst the shareholders of the Northern Securities Company, was assented to. Two million nine hundred and fortyfour thousand seven hundred and forty shares were represented, and all voted for the plan adopted by the directors.
teen cents ($30.17) of the preferred stock | tion of the stock of the Northern Pacific of the Great Northern Railway Company, Railway Company and of the preferred stock and proportional amounts thereof for fractional shares of the stock of this company. "The board of directors or executive committee from time to time shall make such rules and regulations as it shall deem necessary or convenient for carrying out the provisions hereof and all matters pertaining to the surrender and retirement of the stock of this company, or to the assignment and transfer of the stocks of the said railway companies, hereby contemplated, shall be under the direction of the board. For the purposes hereof, the stockholders of this company, and the number of shares held by them, respectively, shall be determined from the stock transfer books of the company, which, for such determination, shall be closed at a day and hour to be determined by resolution of the board.
"Resolved, That a meeting of the stockholders of this company, for the purpose of taking action upon the said alteration of the certificate of incorporation of this company, and also upon such other business as may come before the meeting, be, and is hereby called, to be held at the general offices of this company in the city of Hoboken, county of Hudson, and state of New Jersey, at 11 o'clock A. M., on April 21, A. D. 1904."
As has been stated, the second amended bill was filed after the hearing on the application for the preliminary injunction, and it was therein alleged, among other things, that the Northern Securities Company was incorporated and organized in pursuance of a combination in restraint of trade and commerce among the several states; that the said company was to "acquire and permanently hold a majority of the shares of the capital stock of said Great Northern and Northern Pacific companies and control the operation and management thereof in perpetuity, and that the then existing holders of such railway shares should deposit the same with said holding company and receive in lieu thereof share certificates of said holding company upon the basis of $180 par value of its stock for each share of Great Northern stock and $115 par value of its stock for each share of Northern Pacific stock, and that said holding company should act as custodian, depositary, or trustee of said railway shares on behalf of the cxisting stockholders of said railway companies and their assigns.
Notice was accordingly given that the meeting of the stockholders would be held on April 21, and a copy of the resolutions and an explanatory letter were sent to the "That prior to the incorporation of said Attorney General of the United States. Northern Securities Company your orator Early in April the three principal complain- Oregon Short Line Railroad Company had ants in the present suit presented to the acquired and at the time of the incorporacircuit court for the district of Minnesota tion and organization of said Securities their petition for leave to intervene in the company owned, $37,023,000 par value of suit of the United States against the North- the common stock and $41,085,000 par ern Securities Company, setting up sub- value of the preferred stock of the defendstantially the same grounds as in this suit, ant Northern Pacific Railway Company repand seeking similar relief. This applica-resented by certificates issued to and registion was heard at St. Paul April 12 and 13. The government appeared by the Attorney General, and filed a declaration that it was satisfied with the relief granted. April 19, 1904, the court rendered its decision, deny-said, your orators Harriman, Pierce, and ing leave to intervene. 128 Fed. 808.
Up to April 18, 1904, the Securities Company had issued 86,945 certificates of stock and there had been 16,000 transfers registered on the books of the company. At the closing of the transfer books on that day there were 3,953,971 shares of stock outstanding in the hands of 2,531 separate holders.
The meeting of the stockholders of the Northern Securities Company was duly held April 21, 1904; and at that meeting the stock of the company was reduced 99 per cent, and the proposed pro rata distribu
tered in the name of your orators Harriman and Pierce; and that after the incorporation of the said Northern Securities Company had been resolved upon as afore
Oregon Short Line Railroad Company agreed with the promoters and incorporators of said Northern Securities Company to transfer to and deposit with said Northern Securities Company, under the terms and conditions aforesaid, the said shares of said Northern Pacific Railway Company of the aggregate par value of $78,108,000 owned by said Oregon Short Line Railroad Company as aforesaid, and to receive in exchange therefor certificates of said Northern Securities Company representing an interest therein of $82,491,871 par value and $8,915,629 in cash, and in pursuance of said
agreement your orators Harriman and decreed that said proposed plan of distribuPierce, acting for your orator Oregon Short tion is illegal and contrary to law and in Line Railroad Company, did, on or about violation of the rights and equities of your the 18th day of November, 1901, transfer orators, and that the complainants are enand deliver to said Northern Securities Com- titled to the return and transfer to them pany certificates for $37,023,000 par value by the defendant Northern Securities Comof the common stock and $41,085,000 par pany of the shares of common stock of said value of the preferred stock of said North-Northern Pacific Railway Company which ern Pacific Railway Company owned by were so delivered by said Harriman and your said orator as aforesaid, and received in exchange therefor certificates of said Northern Securities Company representing an interest in $82,491,871 par value and said cash.
Pierce and the shares of common stock into which the preferred stock of the Northern Pacific Railway Company, delivered by them, were converted, in exchange for the certificates of stock of the Northern Securities Company so issued to and now held by your orators, and such sum in cash as may be just; and that the said defendant, Northern Securities Company, its directors, officers, and agents, may be ordered and directed to indorse the certificates now held by it for said stock of the Northern Pacific Railway Company to your said orator Oregon Short Line Railroad Company or in blank, and deliver the same to your orator the Equitable Trust Company of New York in exchange for the stock of the Northern Securities Company now held by it, to be held subject to its rights and lien as trustee aforesaid; and that the defendant Northern Securities Company, its directors, offi
"That at the time of such exchange, on said 18th of November, 1901, it was agreed between said Harriman and Pierce and said defendant, Northern Securities Company, that the said $41,085,000 par value of said preferred stock of the said Northern Pacific Railway Company should be converted into common stock of said Northern Pacific Railway Company; that said preferred stock was subsequently and in or about the month of December, 1901, converted by said defendant Northern Securities Company into common stock of said Northern Pacific Railway Company of the same par value; that certificates for $34,709,062 par value of such common stock registered in its name on the books of said railway company were sub-cers, agents, and employees, be perpetually stituted in lieu and place of the certificates for said preferred stock; that said Northern Securities Company caused said original common stock to be transferred into its name upon the books of said railway company so received from your orators Harripany, and that said Northern Securities Company now holds within the jurisdiction of this court certificates registered in its name on the books of the Northern Pacific Company for said common stock so originally received from your orators Harriman and Pierce, and for said common stock into which said preferred stock was so converted and certificates substituted as aforesaid."
"Your orators are advised by counsel, and, therefore, aver, that the effect of said decree of April 9, 1903, as affirmed by the Supreme Court of the United States, was to adjudge that the Northern Securities Company was not a purchaser or owner, but simply a custodian, of the shares of stock of said railway company acquired and held by it as aforesaid; that it acquired and held possession thereof in violation of said anti-trust act; that it acquired no title thereto, and cannot transfer any rights in respect thereof; and that the legal and equitable owners of said shares of the stock of said railway companies were and are the several parties who originally exchanged the same for stock of the Northern Securities Company or their assigns."
enjoined and restrained from in any manner parting with, disposing of, transferring, assigning, or distributing, any part of said stock of the Northern Pacific Railway Com
man and Pierce as aforesaid, or any common stock into which the preferred stock received from them may have been converted, or the certificates now representing the same or any part thereof, except to return the same to your orators in exchange for its own stock so issued as aforesaid and said cash; and that your orators have such other or further or general relief against said Northern Securities Company as shall be proper and just under the circumstances of the case.
"Your orators further pray that the defendant, Northern Securities Company, may be enjoined and restrained from parting with, disposing of, transferring, assigning, or distributing, said stock of the Northern Pacific Railway Company, or any part thereof, during the pendency of this suit, or any certificates now representing the same."
The proofs embraced the pleadings and decrees in the suit of United States v. Northern Securities Company; the ex parte affidavits of Harriman, Hill, and others; the deposition of Harriman taken before the Interstate Commerce Commission at Chicago in January, 1902; the deposition of The prayer of the bill was "that it be Harriman taken in the suit of Minnesota
v. Northern Securities Company in Decem- | company became the owner of the Northern ber, 1902; extracts from the minutes of pro- Pacific Railway shares, and assert, to the ceedings of the board of directors of the contrary, that the company held the shares Northern Pacific Railway Company, and of as a trustee or a bailee for complainants. the executive committee and board of di- And the principal ground on which this rectors of the Northern Securities Com-contention is rested is that it was so adjudipany.
Messrs. William D. Guthrie, D. T. Watson, R. S. Lovett, Maxwell Evarts, John F. Dillon, R. V. Lindabury, and Bainbridge Colby for petitioners.
Messrs. Elihu Root, John G. Johnson, Francis Lynde Stetson, John W. Griggs, W. P. Clough, and Thomas Thacher for respondent.
cated by the circuit court for the district of Minnesota in the government suit, by the decree of April 9, 1903, affirmed by this court.
It may be said in passing that complainants were not parties of record to that suit, and that they were not parties by representation, if the effect of the transfers as between the parties thereto had been in issue and the vital conflict between complainants and the corporation, now set up, then exist
Mr. Chief Justice Fuller delivered the ed which would destroy the community of opinion of the court:
Great Northern company and the Northern Pacific company, acquired by this defendant, has been, and so long as it remains the property of the defendant will continue to be, held and owned by it in its own right, and not under any agreement, promise, or understanding on its part, or on the part of its stockholders and officers, that the same shall be held, owned, or kept, by it for any period of time whatever, or under any agreement that in any manner restricts or controls to any extent any use of the same which might lawfully be exercised by any other owner of said stocks."
interest on which the rule of representation In applying to this court for the writ of is founded. And, on the other hand, in that certiorari counsel for complainants insisted suit the Northern Securities Company, at that the circuit court of appeals had prac-a time when complainant Harriman was a tically disposed of the entire controversy director, answered that "every share of the on the merits, although its decree only reversed the order of the circuit court granting the preliminary injunction. We accepted that view and granted the writ, in the circumstances, notwithstanding the decree was not final. In our opinion the record presented the whole case to that court in such wise that it might properly have been finally disposed of in terms by its decree, in accordance with the well-settled rule upon that subject. Mast, F. & Co. 7. Stover Mfg. Co. 177 U. S. 495, 44 L. ed. 860, 20 Sup. Ct. Rep. 708; Castner v. Coffman, 178 U. S. 183, 44 L. ed. 1027, 20 Sup. Ct. Rep. 842; Knoxville v. Africa, 77 Fed. 501. In Western U. Teleg. Co. v. Pennsylvania R. Co. 195 U. S. 540, 547, 25 Sup. Ct. Rep. 133, 49 L. ed. 312, the circuit court had granted a preliminary injunction (120 Fed. 981), which was reversed by the circuit court of appeals. 59 C. C. A. 113, 123 Fed. 33.
The telegraph company moved that the decree be modified so as to direct the dismissal of the bill. The motion was denied, and the telegraph company took an appeal to this court. Subsequently the circuit court sua sponte entered an order dismissing the bill, and the telegraph company appealed therefrom to the circuit court of appeals. 195 U. S. 547, 25 Sup. Ct. Rep. 133, 49 L. ed. 312. We then granted a certiorari, and, considering both appeals together, affirmed the decree of dismissal.
But we are of opinion that the circuit court did not determine the quality of the transfer as between the defendants themselves, nor was that the purpose of the government proceedings.
The decree of April 9, 1903, adjudged that defendants had theretofore entered into a combination or conspiracy in restraint of trade and commerce; that all stock of either of the railway companies then held or owned by the Securities company was acquired and held in virtue of such combination; and enjoined the Securities company and the two railway companies from receiving, or permitting the exercise of, any control by the Securities company over either railway, or any exercise of the voting power of the railway shares, and the payment or reception of dividends upon the railway shares held by the Securities company; and the Securities company was forbidden from acquiring further stock of either of the railway companies.
In the present case we granted the certiorari, at the instance of complainants, before the case had gone back to the circuit court, and shall do what the circuit court of appeals might have done, that is, finally And it was provided that nothing should dispose of the case by our direction to the be construed as prohibiting the Securities circuit court. company from returning and transferring Complainants deny that the Securities' the railway shares to the original railway
This did not involve a decision that any original vendor of the railway shares was entitled to a judicial restitution thereof, and such was the view of the circuit court itself, for in its opinion of April 19, 1904, the court said:
stockholders who had delivered their shares | substance, that nothing therein contained to the Securities company for shares of its should be construed as prohibiting the Sestock; or to such person or persons as might curities company from returning to the be the holders and owners of its own stock stockholders of the Northern Pacific Railoriginally issued in exchange or in pay-way Company and the Great Northern Railment for the stock claimed to have been ac-way Company any and all shares of stock in quired by it in the railway companies. either of said railway companies which the Northern Securities Company had acquired in exchange for its own stock, and that nothing therein contained should be construed as prohibiting the Securities company from making such transfer of the stock aforesaid to such person or persons as had become owners of its own stock originally issued in exchange for the stock in the two railway companies; but this provision was purely permissive. It did not command that the stock should be so returned or to exclude other methods of disposition of it that, in view of all the circumstances, might appear to be more equitable. The fact that the directors of the Securities company have proposed to its stockholders a plan of distributing the stock of the two railway companies in a manner somewhat different from that which was tentatively suggested by the decree, but not commanded, cannot be regarded as a failure to obey the decree. It was said in argument that one purpose of the intervention is to have that clause of the decree which is now merely permissive made mandatory. But this would be to modify the provisions of a decree which has become final by affirmance, and make an order which we expressly and on full consideration declined to make when the decree was entered. This we must decline to do."
"The decree was wholly prohibitory. It enjoined the doing of certain threatened acts, and so long as these acts are not done it enforces itself, and no further action looking to its enforcement is deemed essential. In its bill of complaint the United States prayed, among other things, for a mandatory injunction against the Securities company requiring it to recall and cancel the certificates of stock which it had issued, and to surrender the stock of the two railway companies in exchange for which its stock had been issued. This prayer for relief was denied. The court doubted its power to compel stockholders of the Securities company, who had not been served with process, and were not before the court otherwise than by representation (if, indeed, they were present by representation), to surrender stock which was in their possession, and to take other stock in lieu thereof. It accordingly contented itself with an order which rendered the stock of the two railway companies, so long as it was in the hands of the Securities company, valueless for the purpose of carrying out the objects of the unlawful combination in restraint of interstate trade. The government was satisfied with the relief obtained, and expresses itself as fully satisfied therewith at the present time. When the decree was entered it was assumed by the court that when the stock was thus rendered valueless in the hands of the Securities company the stockholders of that company would be able, and likewise disposed, to make a disposition of the stock which, under all the circumstances of the case, would be fair and just, and would restore it to the markets of the world, where it would have some value, instead of being a worthless commodity. It was thought that the duty of thus disposing of it could be safely left to the stockholders of the Securities company, and that, if any controversy arose in the discharge of this function, | in view of the situation that had been created by the decree, it would be a controversy that would properly form the subjectmatter of an independent suit between the parties immediately interested. It is true that the decree contained a provision, in
The decree of April 9, 1903, was affirmed by the judgment of this court, which, of course, went no further than the decree itself. We We did, indeed, by our judgment. leave the circuit court at liberty "to proceed in the execution of its decree as the circumstances may require," but this did not operate to change the decree, or import a power to do so not otherwise possessed.
Counsel argue, however, that certain expressions in the opinion of Mr. Justice Harlan so enlarged the scope of the decree as to give it the effect now attributed to it by complainants.
This suggestion is inconsistent with the settled rule that general expressions in an opinion, which are not essential to dispose of a case, are not permitted to control the judgment in subsequent suits. Cohen v. Virginia, 6 Wheat. 399, 5 L. ed. 290; Carroll v. Carroll, 16 How. 279, 14 L. ed. 938. But we do not think that the opinion of Mr. Justice Harlan is open to the construction: put upon it. In speaking of the situation as between the government and the defendants, the Securities company is sometimes referred to as the custodian of the shares