Tutt and Mr. Tutt Part 36

"It must be that mining-reorganization case," answered the judge. "Well, it's time to go in."

They walked down the dirty marble corridor and entered the court room, while the clerk rapped on the railing.

"Hear ye! Hear ye! Hear ye! All persons having any business to do with the District Court of the United States draw near, give your attention and you will be heard," he intoned with unctuous authority.

The "bunch" rose and made obeisance.

"Good morning," said the judge pleasantly, sitting down with a side switch of the bombazine. "Barrows against the--er--er--Horse's Neck Mining Company. Do you represent the complainant, Mr. Tutt?"

"I do," answered Mr. Tutt with great dignity. "Your Honor, this is a motion for an order to show cause why an injunction _pendente lite_ should not issue restraining the sale of the a.s.sets, of this corporation to another in fraud of its minority stockholders--and for a receiver. My client, an aged man living upon his farm in the northern part of the state, is the owner of one hundred thousand shares in the Horse's Neck Mining Company of the par value of one hundred thousand dollars. He has owned these securities for many years. They represent his entire capital. He is a bona fide stockholder--"

"May I be pardoned for interrupting?" sneered Chippingham, springing to his feet. "I think the court should be informed at the outset that this man, Barrows, is a notorious ex-convict."

Judge Pollak raised his eyebrows.

"This is an outrage!" thundered Mr. Tutt, his form rising ceilingward.

"My client--like all of us--has had his misfortunes, but they are happily a thing of the past; he has the same rights as if he were an archbishop, the president of a university or--a judge of this honorable court."

"We are sitting in equity," remarked His Honor. "The question of _bona fides_ is a vital one. _Is_ the complainant an ex-convict?"

"This is the complainant, sir," cried Mr. Tutt, indicating old Doc, now for the first time in his life smartly arrayed in a new checked suit, red tie, patent-leather shoes and suede gloves, and with his beard neatly trimmed. "This is the unfortunate man whose honest savings of a lifetime are being wrested from him by an unscrupulous group of manipulators who--in my opinion--are more deserving of confinement behind prison walls than he ever was."

The gentlemen with the tall hats bit their lips and showed signs of poorly suppressed agitation.

"But _is_ your client an ex-convict, Mr. Tutt?" repeated the judge quietly.

"Yes, Your Honor, he is."

"When and how did he become possessed of his stock?"

Mr. Tutt turned to Doc with an air of ineffectually striving to master his righteous indignation.

"Tell the court, Mr. Barrows," he cried, "in your own words."

Doc Barrows wonderingly rose.

"If you please, sir," he began, "it's quite a long story. You see, I was the owner of all the stock of The Chicago Water Front and Terminal Company--there was a flaw in the t.i.tle deed which I can explain to you privately if you wish--and when I was--er--visiting--up on the 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 a.s.sets 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 a.s.sets 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 a.s.sure Your Honor that we would welcome their partic.i.p.ation--they can have their equity appraised under the laws of Delaware and the finding becomes a lien on the a.s.sets 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.