The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1885-11-04
A SENSATIONAL LAWSUIT.
Serious Charges Against the Business Integ-
rity of a WelI-Known Kentuckian.

LOUISVILLE, Nov.3-A sensational. suit charg-
ing wholesale fraud against Richard Monarch a
well-known distiller and property owner, of
Greensboro. was filed in the United States Court
this afternoon. The style of the suit is Simon
j. Flanagan and wife, Virginia Magale, Joseph
F. Magale and Lillian Magale vs. Richard Mon
arch, John Callaghan, and the Daviess County
Distillery Company" The petition states that
the plaintiffs live in Galveston. Tex and that
on the 18th of April, 1873. partnership was en-
tered into between Richard Monarch, J. F. Ma
gale and r. E. Burnham as distillers. Monarch
was to furnish one-half of the means bear one
half the losses, and receive one-half the profits;
Magale was to receive three fourths Of
the other half. and Burnham ope-fourth;
Monarch was to manage the business. and receive
81 600 per year salary. The partnership was to
continue until November 1883. but dissolved
by Magales death in June, 1880. Magale's
widow afterwards married Simon j. Flanagan,
one OF the plaintiffs. The petition states that
the profits of the business were $780, 624 This,
it is alleged, was received by Monarch and con-
verted to his own use except $l2 453 which
Burnham received. Magale paid more that ST.
O82 into the business. The petition states that
plaintiffs are entitled. first, to the of the
capital stock over his part; second to half of
the net profits earned and received by said firm
or received by Monarch from its profits; third, to
One-half of all the assets of said firm, Burnham
having been settled with, his part paid. and hav
ing gone out of the firm before it dissolved.
Richard Monarch. it is charged, caused one
eighth OF the profits. $l2, 453 to be paid to Burn
ham, In whisky, out of whisky made by and be-
longing to the firm, and he fraudulently caused,
it is asserted to be entered on the books charge
OF $l5, SAL 80 therefor, and deducted the same
from Magales interest The petition charges that
Monarch sold to Monarch 6 Millett whisky at
less than the market price, and also sold large
quantities to Maga!e 81 Burnham, charging
more than the market price. 1t charges that he
kept other members of the firm in ignorance,
and by this and other methods made the firms
books show the interests and profits Of ]. F. Ma
gale to be less than they were by more than
$50, 900. Furthermore, it states that he appro-
priated to his own use and not accounted for,
more than $4,000 belonging to Magale. 1t is al
legged that when the firm dissolved it owned
property amounting to $170, 900 over its indebt-
edness.
The petition then gives number of alleged
fraudulent entries made by Monarch. One in
stance is as follows 1t is thought that he made
Magale present of ten barrels of whisky. upon
which the taxes amounted to $446. Is, and
charged that amount to the latter. He then, it
is affirmed, credited himself with like sum-
thus making Magale pay the taxes twice. The
document also states that in July 1880, Monarch
induced Mrs Magale to enter into partnership
with him under the name of r. Monarch & Co.,
as dlstlers. The firm to last five years,
and so, 900 was to be paid in by each as the cap
ital stock. 1t is alleged that she paid into the
firm more than $40. 600, and he transferred as
sets of the firm of Monarch, Magale & Burnham
to S;tn the new firm and cred, credited himself ssf
capital stock. He furnished no money,
it is claimed, but used the assets of the old firm
and credited himself with payment of his part of
the capital stock. On Dec 16 1880, the assets
belonging to j. F. Magale and R. Monarch as
members of the old firm, amounted to $27O 900,
all of which, it is stated, Monarch received and
never accounted for From 1880 to 1885, the pc
tition says, Mrs Flanagan paid into the firm of
r. Monarch 81 Co. $4,000. During the first year
of the new firm the petition charges that Mon
arch credited himself with $6, 900 salary, and $5,
300 for each succeeding year. It alleges that he
has bought lands and property with the assets of
the firm and taken titles IL his own name. A
list is esuen of houses and lots pur-,
chased. Nearly all of the property is near
Owensboro. He also bought a steamboat and
another distillery in the alleged way 1t
says he purchased groceries for his family's use
and paid for them in whisky belonging to the
firm 1t says he made entry the books
showing that he had traded whisky for groceries
at more than the market price. and credited
himself with the difference claiming to be enti-
tied to 1t on account of superior trading ability
1t charges that he also bought three fourths in
terest in the Kentucky Club distillery and formed
a partnership with John Collaghan. He paid
$40, 600 for his interest In the business, taking
deed in his owa name. It further charges that
Monarch and Collaghan had also entered into
conspiracy to cheat plaintiffs out of their rights;
it states that Monarch had used the old firms
trade marks which we'll established in
new enterprises. Some time ago, it is alleged,
he represented to Mrs. Flanagan that her in
terests were small, and offered to buy her share
for 81, 800. The petition claims that the assets
of the firm of r. Monarch & Co. will amount to
over $500 0O0 and prays for a complete settle
ment of the partnership.