United States v. Northern Securities Co.

• Citation: 128 F. 808
• Parties: UNITED STATES v. NORTHERN SECURITIES CO. et al.
• Decision Date: 19 April 1904
• Court: U.S. District Court — District of Minnesota

128 F. 808

UNITED STATES v. NORTHERN SECURITIES CO. et al.

United States Circuit Court, D. Minnesota.

April 19, 1904

William D. Guthrie, R. S. Lovett, Maxwell Evarts, and John N Baldwin, for petitioners.

Elihu Root, John G. Johnson, Frank B. Kellogg, and C. A. Severance opposed.

Jas Hamilton Lewis, for Continental Securities Co.

Before SANBORN, THAYER, VAN DEVANTER, and HOOK, Circuit Judges.

THAYER Circuit Judge.

This is an application by Edward H. Harriman and Winslow S. Pierce and the Oregon Short Line Railroad Company for leave to intervene pro interesse suo in the case of the United States v. The Northern Securities Company and others. The case in which they seek to intervene has already passed to a final decree, and the decree has been affirmed lately by the Supreme Court of the United States. 24 Sup.Ct. 436, 48 L.Ed.-- .

The petitioners recite as the grounds of their application that Harriman and Pierce, as trustees for the Oregon Short Line Railroad Company, are the registered owners of $82,491,871 in par value of the stock of the Northern Securities Company which was originally issued to them in exchange for common and preferred stock of the Northern Pacific Railway Company; that since the decree was affirmed by the Supreme Court the directors of the Securities Company have formulated a scheme for the reduction of the capital stock of that company to the extent of 99 per cent, and are about to submit the scheme for approval to the stockholders of the company; that the plan so proposed contemplates that the stockholders of the Securities Company shall surrender 99 per cent. of the stock of that company which they respectively hold, each stockholder receiving in exchange $39.27 in stock of the Northern Pacific Railroad Company and $30.17 in preferred stock of the Great Northern Railway Company, for each share of the Securities stock so surrendered; that the petitioners, Harriman and Pierce, are able to return the shares of stock in the Securities Company which they originally received from that company in exchange for Northern Pacific stock, and as they verily believe that the proposed plan of distribution, if carried out, will vest a majority of the stock of the Great Northern and the Northern Pacific Railway Companies in the same individuals who co-operated in forming the Securities Company, and would continue the common management of the two competing railway companies and render the decree of this court ineffectual and defeat its true purpose.

Applications for leave to intervene in a case after the entry of a final decree are very unusual. They are never granted as a matter of course, and, owing to the tendency of such applications to occasion delay and prolong the existing litigation, they ought not to be granted unless it is necessary to do so to preserve some right which cannot otherwise be protected, or to avoid some complication that is liable to arise.

The principal ground, as it seems, on which the petitioners, Harriman and Pierce, base their application to intervene, is that it is necessary to the due enforcement that they should be admitted into the cause as parties and be allowed to raise further issues and obtain further orders. It is undoubtedly true that a supplemental bill may be filed in a case after a final decree for the purpose of fully executing it, when, after the decree is entered, some action has been taken or unforeseen events have occurred which will prevent its enforcement unless some further orders or directions are given. Root v. Woolworth, 150 U.S. 401-411, 14 Sup.Ct. 136, 37 L.Ed. 1123; Minnesota Company v. St. Paul Company, 2 Wall. 609, 17 L.Ed. 886. But we fail to perceive that further orders are necessary in the case at hand to insure the due execution of the decree according to its terms. 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 contended 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...