Hudson—I met a man there who was the owner of a hundred thousand shares of Horse's Neck, and we agreed to exchange."
The judge tried to hide a slight smile.
"I see," he replied pleasantly. "And what was the man's name?"
"Oscar Bloom, sir."
The gentlemen with the tall hats exchanged agitated glances.
"Do you know how he got his stock?"
"No, sir."
"That is all. Go on, Mr. Tutt."
Doc sat down while Mr. Tutt again unhooked his lank form.
"To resume where I was interrupted, Your Honor, the directors controlling a majority of the stock of this corporation, the capital of which is ten millions of dollars, have made a contract to sell all of its properties to another corporation, organized by themselves and capitalized for one million, for the sum of one hundred and twenty-five thousand dollars!
"It is true that in their plan of reorganization they offer to permit any stockholder in the old corporation to subscribe for stock in the new at par—thus at first glance placing all upon what seems to be an equality; but any stockholder who does not see fit to subscribe or cannot afford to do so is wiped out, for there will be nothing left in the way of assets in Horse's Neck after the transfer is completed.
"Now these gentlemen have underwritten the stock in the new Lallapaloosa Company at fifty cents upon the dollar, and if this nefarious deal is permitted to go through they will thus acquire a property worth ten millions for five hundred thousand dollars, of which they will use only one hundred and twenty-five thousand in payment of old indebtedness. In effect, they confiscate the equity of all the minority stockholders in Horse's Neck who cannot afford to subscribe for stock in Lallapaloosa." He turned upon the uncomfortable tall hats with an arraigning eye.
"In the criminal courts, Your Honor, such a conspiracy would be properly described as grand larceny; in Wall Street perchance it may be viewed as high finance. But so long as there are courts of equity such a wrong upon a helpless stockholder will not go unrebuked. Have I made myself clear to Your Honor?"
Judge Pollak looked interested. He was a man famous for his protection of helpless minorities and his court had been selected by Mr. Tutt on this account.
"If the facts are as you state them, Mr. Tutt," he answered seriously, "the plan on its face would seem to be inequitable. If the property is worth ten million the consideration is palpably inadequate. Your client's equity, worth on that basis at least one hundred thousand dollars, would be entirely destroyed without any redress."
"Your Honor," burst out Mr. Chippingham, whose bald head had been bobbing about in excited contiguity with the tall hats, "this is a most misleading statement. The assets of Horse's Neck aren't worth a hundred thousand dollars. And if any of the minority don't want to come into the reorganization—and I assure Your Honor that we would welcome their participation—they can have their equity appraised under the laws of Delaware and the finding becomes a lien on the assets even after they have been transferred."
"What relief does that give a man like Mr. Barrows?" shouted Mr. Tutt. "He can't afford to go down to Wilmington with a carload of books and a corps of experts to prove the value of Horse's Neck. It would cost him more than his stock is worth!"
"That remedy is not exclusive, in any event," declared the judge. "If this complainant is going to be defrauded I will enjoin this contract pendente lite and appoint a receiver."
"Your Honor!" protested Chippingham in great agony. "It is not the fact that this mine is worth ten million. It isn't worth at the most more than one hundred thousand. It is, full of water, the machinery is rusted and falling to pieces and the workings are practically exhausted. The only way to rehabilitate this property is for everybody to come in and put up enough money by subscribing to the stock of the new corporation to pump it out, buy new engines and start producing again. Is it fair to the majority, who are willing to go on, put up more money, and make an attempt to save the property, to have this complainant—an ex-convict who never paid a cent for his stock, dug up from heaven knows where—enjoin their contract and throw the corporation into the hands of a receiver? This is nothing but a strike suit. I repeat—a strike suit!"
He glowered breathless at his adversary.
"Oh! Oh!" groaned Mr. Tutt in horrified tones.
"Gentlemen! Gentlemen!" expostulated the court. "This will not do!"
"I beg pardon—of the court," stammered Mr. Chippingham.
"Your Honor," mourned Mr. Tutt, "I have practised here for thirty years and this is the first time I have ever been insulted in open court. A strike suit? I hold in my hand"—he waved it threateningly at the tall hats—"a circular issued by these directors less than five years ago, in which they give the itemized value of this property as ten million dollars. Shortly after that circular was issued the stock sold in the open market at one dollar and ninety cents a share. In two years it sank to ten cents a share. Will a little water, a little rust, a little trouble with labor reduce the value of a great property like this from ten millions of dollars to one hundred thousand—one per cent of its appraised value? Either"—he fixed Chippingham with an exultant and terrifying glance—"they were lying then or they are lying now!"
"Let me look at that circular," directed Judge Pollak. He took it from Mr. Tutt's eager hand, glanced through it and turned sharply upon the quaking Chippingham.
"How long have you been attorney for Scherer, Hunn, Greenbaum & Beck?"
"Twelve years, Your Honor."
"Who is Wilson W. Elderberry?"
"He is the secretary of the Horse's Neck Extension, Your Honor."
"Is he in court?"
From a distant corner Mr. Elderberry bashfully rose.
"Come here!" ordered the court. And the Pooh-Bah of the Scherer-Hunn-Greenbaum-Beck enterprises came cringing to the bar.
"Did you sign this circular in 1914?" demanded Judge Pollak.
"Yes, Your Honor."
"Were the statements contained in it true?"
Elderberry squirmed.
"Ye-es, Your Honor. That is—they were to the best of my knowledge and belief. I was, of course, obliged to take what information was at hand—and—er—and—"
"Did you sign the other circular, issued last month, to the effect that the mine was practically valueless?"
"Yes, sir." Elderberry studiously examined the moldings on the cornice of the judge's canopy.
"Um!" remarked the court significantly.
There was a flurry among the tall hats. Then Mr. Greenbaum sprang to his feet.
"If you please, Your Honor," he announced, staccato, "we entirely disavow Mr. Elderberry's circular of 1914. It was issued without our knowledge or authority. It is no evidence that the mine was worth ten millions or any other amount at that time."
"Oh! Oh!" choked Mr. Tutt, while Miss Wiggin giggled delightedly into her brief case.
Judge
