St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1888-06-20
SUIT AGAINST A SENATOR.
Action Taken Against the Minnesota
Thresher Company.
RENEWING AN OLD FIGHT.
A Paper That Will BE Served at the
Meeting of the Stockholders nj, IS
To-Day. sbrG;2

An order was issued yesterday by the
supreme court of Minnesota on the
Minnesota Thresher Company to show
cause, the 9th inst, why they Should
not be ousted of their franchise as a
corporation, receiver appointed and
the business wound up. Messrs., Cor,
don, E. Cole, ii. G.. Stone and jan.
Castle will assist the attorney general
in the prosecution of the case, whichlis
based upon the following statements
in the information: 81 ~ !.
In 1874 Seymour. Sabin & Coz was
organized and succeeded to the business
done by the firm of the same name, and
Senator Sabin was its principal and
managing stakeholder.
In the spring of 1882 the company was
largely indebted and Sabin organized
new company called the Northwestern
Manufacturing and Car Company, whose
stock might be sold to new parties for
cash, and which new company might as
sumo Seymour, Sabin & Co.'s debts.
Seymour, Sabin IL Co. sold all its as
sets May 10. 1882. to the car company,
and received in full payment car COM
pany's stock, except 1888, 900, which the
car company sold for cash. But the
car company did not assume any of
Seymour, Sabin q Co.'s debts, so that
the car company started with over
5000. 900 of assets and no debts what
ever. Sabin took about half the car
company's stock owned by Seymour,
Sabin & Co.. which, with other stock,
enabled him to control the car company
until its failure two years later. May 10.
1884. AT that time the car company
owed about So, 100000, on which its Sc
cured creditors realized about 81 ,000, 600,
leaving S2,500,000 unsecured debts still
unpaid. on which the holders will rea-
lie not over 10 to ID per cent. The car
company'S receiver added to the assets
100000 profits and S7150,000 borrowed
money, and the whole was bought by
the threSher company for S1,100.0O0.
The threSher company now claim to
have bought at this sale the right to sue
many prominent citizens of Minnesota,
who were stockholders in the car com
pany, or Seymour. Sabin 81 Co.. and who
lost all they invested. They have sued
some and threaten to sue others on
various preteXts. 1t is charged that the
thresher company has no authority.as
manufacturing company to buy Such
stale claims and sue them, or to buy
other things which they attempted to
buy.
About the time both companies failed,
in 1884, he charged the notes Outstand-
ing bearing the car company'S indorse-
ment to Seymour, Sabin 81 Co. and thus
accounted for 81, 100000, and accounted
to Seymour, Sabin & Co. for part of this
extraordinary charge by crediting him
self large amount for worthless car
company stock at its face.
During the two years that the car
company existed SaDin caused it to is
sue false statements, among which was
the annual showing March l, 1888, alleg-
ing that its profits for the nine months
prior thereto had been 1888, 900. after
charging off S105,000 for depreciation.
The facts, as testified to by j. G. OaIor-
man in October, 1886, copy of which
evidence is given, were that the profits
were only $4,000, and at Sabin'S diree-
ton he had falSified the books so saS to
make the profits appear to be $500, 900. 3.
Sabin started to organize numerous
smaller corporations and firms, all of
which are inSOlvent, to float whose paper
he Endorsed the car company's name.
Among them was the Chicago Railway
IL Equipment company upon whose
notes the National German-American
Bank of st. Paul, loaned over $50, 900.
The bank in the Saltwater suits says:
And the officers and agents of said bank
believed the representation and state
mentS made on said note that ''all of said
notes are given for the purchase of $50
railway freight cars. manufactured by
the payee to the maker hereof, which
cars are numbered from $4,000 to Is, 249
inclusive and marked on the side
thereof with the words and letters
Blue Line C. 81 /. e. r. r. CO.. was
wholly false and fraudulent and the
bank and its officers believed the same
and advanced said money to the North
western Manufacturing and Car com
pany, relying upon said statement and
representation, and said bank was de-
ceived and defrauded thereby"
Nov. 26, 1884, Sabin caused the Min
neSOta ThreSher company to be organ
lied under the manufacturing act. 1t
filed its articles, but never filed its GER
tificates, required by law, before it COM
menced business.
The threSher company has issued about
s., 100000 of stock for property worth
about S150.000, most of which stock was
issued to Sabin for the car company
stock he received from Seymour, Sabin
81 Co. and others.
He has issued 100000 bonds and
taken in payment half cash and half in
its own stock and has issued 100000 in
bonds for less than so cents on dollar.
Seven of the thirteen directors of the
thresher company own only $3.50 of its
preferred stock.
Seymour, Sabin & Co, now owe over
s.. zoo, 900, and have assets OF less than
100000; that the total losses to stock
holders and creditors of the Sabin COM
panies exceed S5,O0O.000. The threSher
company, in order to pay for the car
company assets, mortgaged them for
100000 more than they paid for them,
and have since been selling such mort
gagged property, including engines,
threSherS, sash, doors and blinds, ETC.,
without informing purchasers that the