Tutt and Mr. Tutt - Arthur Train
Thus, when Greenbaum called upon Mr. Elderberry for advice, it savored
strongly of Koko's consulting Pooh-Bah and was sometimes almost as
confusing, for just as Pooh-Bah on these occasions was won't to reply,
"Certainly. In which of my capacities? As First Lord of the Treasury,
Lord Chamberlain, Attorney-General, Chancellor of the Exchequer, Privy
Purse or Private Secretary?" so the financial and corporate Elderberry
might equally well ask: "Exactly. But are you seeking my advice as
secretary of Horse's Neck, of Holy Jo, of Cowhide Number Five, or as
vice-president of Hooligan Gulch and Red Water, treasurer of Amphalula
or president of Blimp Consolidated?"
Just now it was, of course, obvious that he was addressing the company
in his capacity of secretary of Horse's Neck.
"It goes without saying, gentlemen, that this property is pretty nearly
down and out. You will recall that most of the insiders sold out on the
tail of the Goldfield Boom and waited for the market to sag until we
could buy in again. The mines are full of water, work was abandoned over
four years ago, and the property is practically defunct. The original
capitalization was ten million shares at one dollar a share. We own or
control at least four million shares, for which we paid ten to fifteen
cents, while we had sold our original holdings for one dollar sixty to
one dollar ninety-five a share. While Horse's Neck represents a handsome
profit--in my opinion"--he cleared his throat again as if deprecating
the vulgarity of his phrase--"it is good for another whirl."
"You say it's full of water?" inquired Hunn.
"It will cost about fifty thousand dollars to pump out the mines and a
hundred thousand to repair the machinery. Then there's quite an
indebtedness--about seventy-five thousand; and tax liens--another fifty.
Half a million dollars would put Horse's Neck on the map, and if the
Amphalula vein crosses the property it will be worth ten millions. If it
doesn't, the chance that it is going to will make a market for the
stock."
Mr. Elderberry swept with a bland inquiring eye the shore of the glassy
sea about which his associates were gathered.
"I've been over the ground," announced Greenbaum "and it's a good
gamble. We want Horse's Neck for ourselves--at any rate until we are
confident that it's a real lemon. Half a million will do it. I'll
personally put up a hundred thousand."
"How are you going to get rid of the fifty thousand other stockholders?"
asked Mr. Beck dubiously "We don't want them trailing along with us."
"I propose," answered Mr. Elderberry brightly, in his capacity as chief
conspirator for Scherer, Hunn, _et al._, "that we organize a new
corporation to be called 'Lallapaloosa Limited' and capitalize it at a
million dollars--one million shares at a dollar a share. Then we will
execute a contract between Horse's Neck and Lallapaloosa by the terms of
which the old bankrupt corporation will sell to the new corporation all
its assets for one hundred and twenty-five thousand dollars. We
underwrite the stock of Lallapaloosa at fifty cents a share, thus
supplying the new corporation with the funds with which to purchase the
properties of the old. In a word we shall get Horse's Neck for a hundred
and twenty-five thousand and have three hundred and seventy-five
thousand left out of what we subscribe to underwrite the stock to put
it on its feet."
"That's all right," debated Hunn. "But how about the other stockholders
in Horse's Neck that Beck referred to? Where do they come in?"
"I've thought of that," returned Elderberry. "Of course you can't just
squeeze 'em out entirely. That wouldn't be legal. They must be given the
chance to subscribe at par to the stock of the new corporation on the
basis of one share in the new for every ten they hold in the old; or, as
Horse's Neck is a Delaware corporation, to have their old stock
appraised under the laws of Delaware. In point of fact, they've all
written off their holdings in Horse's Neck as a total loss years ago and
you couldn't drag 'em into putting in any new money. They'll simply let
it go--forfeit their stock in Horse's Neck and be wiped out because they
were not willing to go in and reorganize the property with us."
"They would if they knew about Amphalula," remarked Beck.
"Well, they don't!" snapped Greenbaum, "and we're under no obligations
to tell 'em. They can infer what they like from the fact that Horse's
Neck has been selling for ten cents a share for the last three years."
"Is that right, Chippingham?" inquired Beck of the attorney who was in
attendance. "I mean--is it legal?"
"Perfectly legal," replied Mr. Chippingham conclusively. "A corporation
has a perfect right to dispose of its entire assets for a proper
consideration and if any minority stockholder feels aggrieved he can
take the matter to the Delaware courts and get his equity assessed.
Besides, everybody is treated alike--all the stockholders in Horse's
Neck can subscribe pro rata for Lallapaloosa."
"Only they won't," grinned Scherer.
"And so, as they are wiped out--the new corporation--that is us--in fact
gets their equity, just as much as if they had deeded it to us."
"That is, we get for nothing about one-half the value of the property,"
agreed Elderberry. "Now, I've been over the list and I don't think
you'll hear a peep from any of them."
"He's got 'em on the list--he's got 'em on the list;
And they'll none of 'em be missed--they'll none of 'em be missed!"
hummed Mr. Beck. "It looks good to me! I'll take a hundred thousand."
"Mr. Chippingham has the papers drawn already," continued Elderberry.
"Of course you've got to give the old stockholders notice, but we can
rush the thing through and before anybody wakes up the thing will be
done. Then they can holler all they want."
"Well, I'll come in," announced Hunn complacently.
"So will I," echoed Scherer. "And the firm can underwrite the last
hundred thousand, and that will clean it up."
"Is it all right for us to underwrite the stock ourselves at half
price?" inquired Mr. Beck. "I mean--is it legal?"
"Sure!" reiterated Mr. Chippingham. "Somebody's got to underwrite it;
why not us?"
"Move we adjourn," said Mr. Greenbaum. "Elderberry--the usual."
Mr. Elderberry removed from his change pocket five glittering gold
pieces and slid one across the glass sheet to each director.
"Second motion. Carried! All up--seventh inning!" smiled Mr. Scherer;
and the directors, pocketing their gold pieces, arose.
If, as it has been defined, ethics consists of a "system of principles
and rules concerning moral obligations and regard for the rights of
others," it may be interesting to speculate as to whether or not these
gentlemen had any or not, and, if so, what it may have been. But in
considering this somewhat nice question it should be borne in mind that
Messrs. Scherer, Hunn, Greenbaum & Beck were bankers of standing, and
were advised by a firm of attorneys of the highest reputation. On its
face, and as it was about to be represented to the stockholders of
Horse's Neck, the proposition appeared fair enough.
The circular, shortly after sent out to all the names upon the list,
stated succinctly that financial and labor conditions had been such that
it had been found impossible to operate the mine profitably for several
years, that it had depreciated greatly in value owing to the water which
had accumulated in its lower levels, that it had exhausted its surplus,
that a heavy indebtedness had accumulated, that the corporation's
outstanding notes had been protested and that the property would be sold
under foreclosure unless money was immediately raised to pay them, the
interest due and taxes; that half a million dollars was needed to put
the property in operation and that there was no way to secure it, as
nobody was willing to loan money to a bankrupt mining concern. That
under these circumstances no practical method had been proposed except
to organize a new corporation capitalized at one million instead of ten,
to the stock of which each shareholder in Horse's Neck might subscribe
in proportion to his holdings, at par, and to which the assets of the
old corporation should be transferred practically for its debts. That
this, in a word, was the only way to save the situation and possibly
make a go of a bad business, and that it was a gamble in which the old
stockholders had a right, up to a certain date, to participate if they
saw fit. Those that did not would find their stock in Horse's Neck
entirely valueless as it would have no assets left which had not been
transferred to Lallapaloosa. Stockholders who were dissatisfied could
protest against the enabling resolution to be offered at the annual
meeting of the stockholders of Horse's Neck to be held the following
week at Wilmington, Delaware, and could avail themselves of the right to
have their equity assessed under the laws of Delaware, but as the
liabilities practically equaled the present value of the property that
equity would naturally be highly problematical.
Now, as a matter of morals or of law the only thing that made the
proposed reorganization unethical or inequitable was the single trifling
fact that those responsible for it were the only ones who knew of the
existence and proximity of the Amphalula vein. When a mining company, a
railroad, an oil well or any other enterprise is down and out it is only
fair that the majority stockholders, who are obliged to protect their
investment, should have the right to call upon the rest to come forward
and do their share or else drop out. A minority stockholder cannot
appeal to any canon of fair play whereby he should be entitled to sit
back and let the majority take all the risks and then claim his share of
the profits.
The imponderable element of injustice in the situation consisted in the
suppression of a fact which the directors concealed but concerning
which, however, they made no representation, false or otherwise. They
were going to risk half a million dollars of their own money and they
wanted the whole gamble for themselves. They sincerely felt that nobody
else was entitled to take that risk with them. Once they had floated
Horse's Neck they had come to look upon it as their own private affair.
The minority had no rights which they, the majority, were bound to
respect. The minority were nothing but a lot of piking gamblers, anyway,
who bought or sold for a rise or fall of a few cents. They knew nothing
of the property and cared less for its real value. They were merely
traders and if they lost they forgot it or tried to. On the other hand
Scherer, Hunn, Greenbaum & Beck were promoters, who contributed
something to the economic advancement of the nation.
* * * * *
"Regarding my hat, which you suggested this morning should be pressed at
a cost of fifty cents," remarked Mr. Tutt to Miss Wiggin when he
returned to the office upon the adjournment of court in the afternoon
and replaced that ancient object in its accustomed resting-place
--"regarding that precious hat of mine"--he eyed it affectionately
--"I can only say that I would as soon send myself to a dry-cleaning
establishment as to permit its profanation by the iron of a
haberdasher."
Miss Wiggin laughed lightly.
"That doesn't explain your cryptic statement that it would probably cost
you a hundred thousand dollars," she replied. "Still--"
Mr. Tutt turned suddenly upon his heel and held her with an upraised
hand, the bony wrist of which was encircled, after an intervening space
of some five inches, by a frayed cuff confined with a black onyx button
the size of a quarter.
"Behold," he cried in the deep resonant voice that he used in addressing
juries at the climax of a peroration, "the integuments of my
personality--the ancient habiliments of an honorable profession--the
panoply of the legal warrior. Here, my corslet"--he touched his dingy
waistcoat with his left hand; "my greaves"--he brushed the baggy legs of
his pantaloons; "my halberd"--he raised his old mahogany cane with its
knot of yellow ivory; "my casque"--he indicated his ruffled stove-pipe
"Arrayed in these I am Mr. Ephraim Tutt, attorney and counselor at
law--the senior partner in Tutt & Tutt--a respected member of the bar
duly accredited and authorized to practise before the Supreme Court of
the State of New York, the Court of Appeals, the District Court of the
United States, the Circuit Court of Appeals, the Supreme Court of the
United States, the Court of Claims--"
"--the Police Court and the Coroner's Court," concluded Miss Wiggin,
making him a mock curtsy.
"Without these indicia of my profession and my individuality I should be
like David without his sling or Samson without his hair. I should be
merely Tutt, a criminal lawyer--one of a multitude--regarded perhaps as
a shyster. But in these robes of my high office I am a high priest of
the law; just as you, my dear girl, are one of its many devoted and
worthy priestesses. Can you imagine me going to court in a bowler hat or
arguing to the jury in a cutaway coat or bobtail business suit? Can you
picture Ephraim Tutt with his hair cut short or in an Ascot tie, any
more than you can envisage him in riding breeches or wearing lilacs? No!
There is but one Mr. Tutt, and these are his only garments. He who
steals my hat may steal trash, but without it I should be like a
disembodied spirit unable to return to my earthly dwelling-place.
"A paltry hundred thousand?
"Nay, without my hat--my helmet!--I should be valueless to myself and
everybody else; so estimate my worth and you can assay the value of my
hat. What am I worth in your opinion?"
And then Miss Wiggin, having glanced cautiously if quickly round, made a
most astonishing declaration.
"Just about a million times more than anybody else in the whole world,
you old dear!" she whispered and rising upon her toes she kissed his
wrinkled cheek.
"Dear me! You really mustn't do that!" gasped Mr. Tutt.
"Well," she retorted, "you can discharge me if you like. But first sit
down, light a cigar and let me tell you something."
Mr. Tutt did as he was bid, chuckling.
"Well," said Miss Wiggin, "there is such a thing as Horse's Neck
Extension after all!"
"Um--you don't say?" he answered, struggling to make his stogy draw.
"And it has an office with about a hundred other corporations of various
kinds--most of them with names that sound like the zoo--Yellow Wildcat,
Jumping Leapfrog, and that sort of thing. It seems Horse's Neck is
played out and they are going to reorganize it--"
"Who are?" demanded her employer, suddenly sitting erect.
"Scherer, Hunn, Greenbaum & Beck."
"The dickens they are!" he ejaculated. "That bunch of pirates? Not if I
know it!"
"Why not?"
"Reorganize! Reorganize? Reorganization is my middle name!" cried Mr.
Tutt. "So Scherer, Hunn, Greenbaum & Beck are going to reorganize
something, are they? Let 'em try! Not so long as I've got my hat!"
"This is all very enigmatical to me," replied Miss Wiggin. "But then,
I'm only a woman. Aren't they all right? Why shouldn't they reorganize a
mine if it's exhausted?"
"If it's exhausted why do they want to reorganize it?" he demanded,
climbing to his feet. "Let me tell you something, Minerva! All my life
I've been fighting against tyranny--the tyranny of the law, the tyranny
of power, the tyranny of money."
He drew fiercely on his stogy, which being desiccated flared like a
Roman candle.
"You don't need to tell me what this plan of reorganization is; because
they wouldn't propose one unless it was going to benefit them in some
way, and the only way it can be made to benefit them is at the expense
of the other stockholders. _Quod erat demonstrandum_."
Mr. Tutt seemed to have become distended somehow and to have spread over
the entire wall surface of his office like the genie which the
fisherman innocently permitted to escape from the bottle.
"There isn't one reorganization scheme in a hundred that isn't crooked
somewhere."
"According to that, if a business is unsuccessful it ought to be allowed
to go to pot for fear that somebody might make a profit in putting it on
its feet," she countered. "I think you're a violent, irascible,
prejudiced old man!"
"All the same," he retorted, "show me a reorganization scheme and I'll
show you a flimflam! What's this one? Bet you anything you like it's as
crooked as a ram's horn. I don't have to hear about it. Don't want to
read the plan. But I'll bust it--higher than Hades. See if I don't!"
He spat the remaining filaments of his stogy from the window and fished
out another.
"How do we come into it, anyhow?" he demanded.
"Doctor--I mean Mister Barrows," replied Miss Wiggin.
"Oh, yes. Of course. Well, you send for him to come down here and sign
the papers."
"What papers?"
"The complaint and order to show cause."
"But there isn't any."
"There will be, all right, by the time he gets here."
Miss Wiggin looked first puzzled and then pained.
"I don't understand," she said rather stiffly. "Do you mean that the
firm of Tutt & Tutt is going to engage in the enterprise of trying to
break up a plan of reorganization without knowing what it is? Won't you
lay us all open to the accusation of being strikers?"
Mr. Tutt's ordinarily brown complexion became slightly tinged with
purple.
"Let the court decide!" he cried hotly. "You say Scherer, Hunn,
Greenbaum & Beck are proposing to reorganize a mining company? You admit
we hold some of the stock? Well--as the natural-born and perennial
champion of the outraged minority--I'm going to attack it, and bust it,
and raise heck with it--on general principles. I'm going to throw that
damned old hat of mine into the ring, my child, and play hell with
everything."
And with a cluck Mr. Tutt leaned over, produced a dingy bottle wrapped
in a coat of many colors and poured himself out a glass of malt extract.
* * * * *
When Mr. Greenbaum was summoned to the telephone and informed by Mr.
Elderberry in disgruntled tones that somebody had just served upon him
an order to show cause why the proposed reorganization of Horse's Neck
should not be set aside and enjoined, he not only became instantly
annoyed but highly excited.
"What!" he almost screamed.
"I'll read it to you, if you don't believe it!" said Mr. Elderberry.
"'United States District Court, Southern District of New York, Edward V.
Barrows, Complainant against Horse's Neck Extension Mining Company,
Defendant.
"'Upon the subpoena herein and the complaint duly verified the
nineteenth day of February, 1919, and the affidavit of Ephraim Tutt
and--'"
"Who in hell is Tutt?" shouted Greenbaum, interrupting.
"I don't know," retorted Elderberry; "or Barrows either."
"Well, skip all the legal rot and get to the point," directed Greenbaum.
"'Ordered--ordered, that the defendant, Horse's Neck Extension Mining
Company, show cause at a stated term to be held in and for--'"
"I said to cut the legal rot!"
"Um--um--'why an injunction order should not be issued herein pending
the trial of this action and enjoining the defendant from disposing of
its assets and for the appointment of a receiver of the assets of the
defendant corporation; and why the complainant should not have such
other, further and different relief as may be equitable.'"
There was a long pause during which Mr. Elderberry was under a
convincing delusion that he could actually hear the thoughts that were
rattling round in Mr. Greenbaum's brain.
"You there?" he inquired presently.
"Oh, yes, I'm here!" retorted Greenbaum. "This is the devil of a note!
Have you spoken to Chippingham?"
"Yes."
"What does he say?"
"He says it's awkward. They have got hold somewhere of one of our old
circulars of 1914 in which the property is described as worth about ten
million dollars--that was during the boom, you remember--and they claim
we are selling it to ourselves for less than one million and that on its
face it's a fraud on the minority stockholders who can't afford to buy
stock in the new corporation--as of course it would be if the mine was
really worth ten million or anything like it."
"Did we really ever get out any circular like that?" demanded Greenbaum
in a protesting voice. "I don't recall any."
"That was when we were making a market for the stock," Elderberry
reminded him. "We couldn't say enough. Honestly, to look at the thing
now is enough to make you sick!"
"Well, it's just a hold-up--that's what it is. Some crook like this
Tutt or this Barrows has found out about Amphalula and is bringing a
strike suit. You'll have to call a meeting right away. I'd like to
strangle all these shyster lawyers!"
And it never occurred to Mr. Greenbaum that the possible existence of
the Amphalula vein was what in fact made the order to show cause
justifiable--his actual ground of complaint being that anybody should,
as he assumed, have found out about it in defiance of his plans.
* * * * *
"Yeronner," said Attendant Mike Horan as he helped Judge Pollak into his
black bombazine gown in his chambers in the old Post-Office Building on
the morning of the return day, "there's a great bunch out there in the
court room waitin' for ye, an' no mistake!"
"Indeed!" remarked His Honor. "And who are they? What is the case?"
"Hanged if I know," answered Mike, snipping a piece of fluff off his
judgeship's shoulder. "There's a white-bearded old guy, two or three
swell gents with tall hats, Counselor Tutt and an attorney named
Chippingham, besides that pretty Miss Wiggin; and they ain't speakin'
none to one another, neither."
"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 assets, 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 title 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.