New-York tribune., 1891-09-16
HERTER BROS.' FIRM IN COURT.
A SUIT BEGUN FOR DISSOLUTION.
CHARGES OF FRAUD MADE AGAINST SOME MEM
BERs OF THE COMPANY BY Mr..


CHARGES OF FRAUD MADE AGAINST SOME MEM
BERs OF THE COMPANY BY Mr.
BAUMGARTEN.
william Baungarten. one Of the members Of the big
decorating and furnishing firm Of Heiter Brothers. at
No. 154 Flfthave, Is seeking TO have the firm dis
solved. The firm was recently turned into stock
company and Mr. Daumgarten its president until
a short time ago. lie has brought suit in the su-
preme Court for the purpose Of having the company
dissolved. The title Of the suit Is William aumeaFleh
against William G.. and william S. Nichols and Arthur
Norton. In his complaint Mr.. Baumgarten makes
some serious charges OF fraud and conspiracy against
the defendants in the suit He says that up to last
February he and William G.. Nichols composed the frm
of Herter Brothers. Mr. Nichols came to him at that
time Mr. Baumgarten says, and told him he wished TO
get ont of the frm There considerable discussion
over the matter and Mr. Nichols proposed that stock
company be formed with capital stock of $4,000
Mr. Baumgarten demurred at first, but finally such rosy
propositions were made TO him that he agreed TO do as
Mr. Nichols wished. The latter offered % make Mr..
Baumgartcn president of the concern with good
salary This agreement carried out. Mr.. Baum
gren says and he agreed to transfer all the property
OF the old firm to the new company.
Affairs went smoothly for only q short tne how
ever according to Mr.. Banmgartens story. HIS
former partner and Norton began to assume charge
moro and more, he declares, and they concocted q
scheme to get him out Of the company altogether
They succeeded In removing him from Office and put
william c. Nichols in his place with Norton as vice
presdent This was all done through fraud and con-
spiracv he charges. lie wants receiver appointed
of the firms assets, the company dissolved, and he
also asks for on injunction to prevent the formal trans
fer Of the assets of the old firm that Of the
This is the story as told by Mr. Baumgarten in his
complaint.
A Tribune reporter saw Mr.. Baumgarten at his home
pt,-tb I'd st asst ni0ht He said
that when the younger Of the Herter orotlerS'
Christian wished to retire from the business, In
1881 Baumgarten took In William G. Nichols as
n mariner They two we're the active members
OF the rn while Christian Herter remained speciai
partner by leaving a sum Of money invested Ill inc
business "Mr. Nichols never knew anythins aoou1
the business.n continued Mr.. Baumgarten. He put
In certain Of money, and all he ever did besloe
to promote the business to come down TO the
office sit around and smoke cigars. He came to me
last winter and told me that he had some chronic
complaint and that his physician had advised MIN
that he must go away for long and indefinite period
lie said he must get out of the business at any rate
So he said to me one day: Why don't You take IN
Norton as q partner1 He has just married rich
wife, and his father-in-law Is willing TO put up some
money for the young man,
morton was a much better for the firm
than Nichols was, and so 1 went to him. In
reply TO my question he SAID yes mao
he had married the daughter Of Higgins, the soap
manufacturer and he thought his fathern-law would
advJnos him money If he could find good
opportunity lie said that he going to dine with
his father-inlaw on the following sunday ana ne
would broach the Subject to him.
ION Monday he said that there was so many
visitors present sunday that he could not tax ous
ness with Mr.. Higgins but he was going to dine
With him again Wednesday, and then he wouu
have "a chance to say what he wished few iays
4 , 1e,id hpr-in
willing to put $4,000 in the business for him.
This pleased me very much because, as said before
Norton was a much better man for the firm Than
Nichols was. Well, Norton came IN, and not
long time after he was made member OF the firm
Nichols came to me day and said
"'Now, see here, this is a company now and father
and propose to run it we wish to- had sup
posed Norton had come in rs all independent member
OF the firm. and l turned to MIN and said:
"'Does Nichols own your
ale did not reply for minute, and then sald
again 'Oh, l Sec he has put this money In Tor you
and You have no voice in these matters at ALL lie
evaded this question by saying that it could easily be
found out where his money came from. l saw through
the whole scheme then. They had got Norton in so
they could have the balance Of power and run the
concern Just as they pleased. The next step was to
hold secret meeting Of the directors and depose me
AS president and put Nichols in my place. There
were five dlrectors-Nlchos, his father, Norton, my
brother andrmySel1. vi LluS
! nor myself received a notice. and II was Illegal
And In fact We hold the larger share OF the stock
| because there Is an undivided share OF which
| | will receive two-thirds and they onet third,
and that will give more than they have. The fraud
| consisted In their misleading about whose money
was to go into the company through NOrt0ns hands,
| and now there will be legal fight over it."
The firm of Herter Brothers is an old and we'll
known one The business was begun in 1888 by
GuStave fielter. In 1868 1854 he took his younger
brother Christian I'm partner, forming the hrm OF
Iierter Brothers. Christian was an artist and it was
through him that the firms business was built up 70
such large PROPORTIONS They built ana furnishes Ile
| and the home OF Mark Hopkins IN san Francisco.
ustave retired 1870 and 1t at that time chat
| Mr. BaumgaIten became the business manager Of the
firm, while Christian lIerer looked after the artistic
part of the business Christian retired in 1881 TO pay
| that Mr.. Nichols taken In as partner The
| history Of the firm has already been told.
| Mr. Nichols could not be seen at his home In the
Cumberland, at Ffthave. and Twenty second ST., last
night In his answer I'm tho suit, however, he denies
a the allegations OF fraud and admits forming the
| company.