The preliminary injunction asked for was gra the hearings of May 20-23, in the circuit cour States for the district of New Jersey, by J July 15, 1904.73 Justice Bradford stated that for in the petition or bill was in some particu that granted in the final decree of the trial co this to be not without significance, "althoug now to discuss the point" With respect leged facts, important in their bearing upo: case, the affidavits and exhibits were char ing on substantial points, and "the fina! will involve the consideration of grav questions of law." The judge did not for a final decision," the present applica liminary injunction. The granting of tion will not interfere with the opera Pacific Railway Company and the Gr Company, or either of them, or other to the interests of the public. While holders for some time from receiving can be provided for their protection.7 on the pro rata plan, leaving only on of the outstanding stock of the Nor or $3,954,000, consisting wholly, or erty other than stock of both or companies 76 would not only del from any relief to which they

Comith the April 21,

the court; were no dis

ang to decision

Untitled to View of the

ut not man

s of stock br tion of counsel

e opinion of Justhe scope of the ed to it by the com rized as a suggestion general expressions in

dispose of a case, are ent in subsequent suits." ne, it seemed to the court ese parties, the transaction In this connection the sution of the circuit court of apnad distinctly testified that the :estion was sold, that he, princind that there was not attached to tion except as to price. And these me court, Harriman should not now s a statement of fact. By the prohe Securities Company had power to stock, and, in the discretion of its diolders of two-thirds of its capital stock, e, to dissolve and to wind up the corporaits assets. Harriman subjected himself en he accepted the shares of the Northern ny as part payment for his Northern Pacific

ent case complainants seek the return of prop

CHAPTER IX.

THE FINAL DECISION OF THE SUPREME COURT.

The final decision, as was stated above, was rendered on March 6, 1905. Generally speaking it upheld every important contention of the Northern Securities Company, and the Company has since distributed its stock in accordance with the plan adopted by its stockholders at the meeting of April 21, 1905. Chief Justice Fuller delivered the opinion of the court; and, unlike the decision of March 14, 1904, there were no dissenting opinions.

Taking up the chief contention of the Harriman party, that the Northern Securities Company did not become owner of the Northern Pacific shares, but simply trustee or bailee, and that this claim is justified by the decree of April 9, 1903, the decision of the trial court, Chief Justice Fuller says that the Harriman interests "were not parties of record to that suit, and that they were not parties by representation, if the effect of the transfer as between the parties thereto had been an issue and the vital conflict between complainants and the corporation, now set up, then existed, which would destroy community of interest on which the rule of representation is founded. And, on the other hand, in that suit the Northern Securities Company, at a time when complainant Harriman was a director, answered that: 'Every share of the 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."" The opinion further states 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." After commenting upon certain features of the decree and referring to its terms, he says further: "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." The decree was permissive but not mandatory in its reference to a return of the shares of stock by the Northern Securities Company. The contention of counsel for Harriman that certain expressions in the opinion of Justice Harlan of March 14, 1904, so enlarged the scope of the decree as to give it the effect now attributed to it by the complainants (Harriman, etc.) was characterized as a suggestion "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." Treating the question as an open one, it seemed to the court "indisputable that, as between these parties, the transaction was one of purchase and sale." In this connection the supreme court confirmed the position of the circuit court of appeals that Harriman himself had distinctly testified that the Northern Pacific stock in question was sold, that he, principally, negotiated the sale; and that there was not attached to the negotiations any condition except as to price. And these statements, said the supreme court, Harriman should not now be permitted to deny as a statement of fact. By the provisions of its charter, the Securities Company had power to buy and sell shares of stock, and, in the discretion of its directors and of the holders of two-thirds of its capital stock, at any time, on notice, to dissolve and to wind up the corporation and distribute its assets. Harriman subjected himself to this power when he accepted the shares of the Northern Securities Company as part payment for his Northern Pacific

shares.

"In the present case complainants seek the return of prop

erty delivered to the Securities Company pursuant to an executed contract of sale on the ground of the illegality of that contract, but the record discloses no special considerations of equity, justice or public policy, which would justify the courts in relaxing the rigor of the rule which bars a recovery.

"The circuit court decrees put at rest any question that the ratable distribution resolved upon was in violation of public policy.

"And it is clear enough that the delivery to complainants of a majority of the total Northern Pacific stock and a ratable distribution of the remaining assets to the other Securities stockholders would not only be in itself inequitable, but would directly contravene the object of the Sherman law and the purposes of the Government suit.

"The Northern Pacific system, taken in connection with the Burlington system, is competitive with the Union Pacific system, and it seems obvious to us, the entire record considered, that the decree sought by complainants would tend to smother that competition.

"While the superior equities, as against complainants' present claim, of the many holders of Securities shares who purchased in the reliance on the belief that they thereby acquired a ratable interest in all of the assets of the Securities Company, are too plain to be ignored.

"The illegal contract could not be made legal by estoppel, but the ownership of the assets, unaffected by a special interest in complainants, could be placed beyond dispute on their part by their conduct in holding the Securities Company out to the world as unconditional owner.

"And without repeating in detail what has been already set out, it is plain that right of rescission of the executed contract of November 18, 1901, even if rescission could have otherwise been sustained, had been lost by acquiescence and laches at the time this bill was filed.

"Since the transfer of that date Securities stock had passed into the hands of more than 2,500 holders, many of them in Great Britain, France and other parts of Europe; nearly a year after the filing of the government bill 75,000 shares were sold for cash, complainant Harriman concurring; some months