The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1891-07-15
TIE COMPLAINT OF A BANK
1t Sets Forth Charges of Deception Re-
gardiDg the Car Company's Affairs.
Receiver Appointed for Large Concern at La
fayette = Criminal Cases Before Judge
WOods-Byram &SuIliyan's Insurance.

The City Savings Bank. of Chattanooga.
Tenn, entered snit in the federal court. yes
terday, against the indianapolis Car and
Manufacturing Company. ;. A. Fletcher x
Co.. W. X. Mckeen sad Charl-s ;. Millard.
Charging that by systematic deception and
fraud they, as well as other creditors of tho
car company. were induced TO furnish il
money and material when it's Insolvency
was known. The Chattanooga bank held
three ninety day notes payable to the En-
pire Lumber Company. at Fletcher's Bank.
for $500 each. dated Jnne 20. July Q. and
July IA. 1880. Upon tho first note plaintiff
obtained Judgment in the federal court
for S2.520.70. but the United States marshal,
Dec. Il 1880. returned the judgment as IN
satisfied. Suit is now brought I'm chancery
for an accounting and to compel the de-
PENDANTS to answer the charges.
The petition Ia one of the most voluminous
ever nied In the federal court. IL recItea
the fact that the car works company con-
tracted with the Coin mbus, Hooking VAL
ley * Toledo Railroad Company for the
agreed upon being $500. $50. This amount
was to be paid in notes, and it is alleged
tnat the car company arranged with Fetch
CT ~ Co. to discount the notes at 8
per cent. per anniim. The petition charges
that Fletcher IL Co. knew the car company
could NOT make q profit on a contract which
involved the discount of notes at such a
heayy rate and that If the cars were made
at ali 1t would DO at ruinOus loss. While
not charging Fletcher ~ Co. with a knowl-
edge OF the company's insolvency at the
time of making the contract to take the
NArs haA
after the indianapolis bank began
loanIng money on them. and long
before the appointment of receiver, it
knew that the company was hopelessly IN
solvent, and bad net the means to complete
the contract. Knowing this, the plaintiffs
say. Fletcher & Co. allowed the creditors
for whose benefit this bill is filed to keep
on furnishing material, and concealed the
true safe of affairs in order that they
FLETCHER Il Co. mi ht benefit by lt.
Continuing. the petition charges that on
or about June /. 1890. Fletcher II Co. con
trived and conspired with said car conf
pany to conceal from the public. the parties
dealing with 1t. and its creditors its true
condition, and did thereby procure it to
become still further indebted TO ITS cred
ltors for the purpose of saving them
selves from loss upon the moneys already
loaned and to realize the profits upon the
notes so to DO discounted. as aforesaid. Aud
thereafter, on June 10, 1880, Fletcher IL
Churchman required the ear company to
assign aud transfer to them all its interests
in said car contracts" The complaint
further states that seeing the insolvent
condition OF the car company could no
longer be concealed. Fletcher ~ Co.
feared that the application for receiver
might be made in the United States Court
and announced their determination that
that court should never be permitted to
pass upon the question of their con-
duct, OF the validity of the securl-
ties, preferences and advantages claimed
by them. The plaintiffs further say
that the Judge of Superior Court No. had
for many years prior TO his election TO the
bench been TO the attorney for Fletcher II
Co. and the intimate personal friend of Mr..
ChuTcbmaD. and also depositOr and GUS
TONER OF the bank. Wherefore Fletcher ~
Co. believing that in view of
and long friendship. they would
have an advantage in the coart in which he
presided. therefore determined that so far
as was within their power all questions
connected with the cOmpany's matter
should be heard and determined in Room
OF the Superior Court"
1t is charged that when the company
was organized in 1881 1T was made to APP
pear that w. X. Mckeen. William b. How
ard and Charles 5. Willard hal paid in, re-
spectlvely, $4,000. $4,000 and $4,000 the
amounts of stock subscribed by them.
Only about half this stock was
paid in, the books being made to
shOW tHo Ill OEQcT,
according to plaintitfsto give the company
good. solid financial standing aud plenty of
credit. The three defendants Just named
the petition charges. caused to be re-
corded with the clerk of the Circuit Court
of Marion county fraudulent statement
and certificate to the effect that 500. 900
capital stock had been paid In full. This
statement has ever since remained on lille
III that office"
A year after the organization of the COM
pany the plaintiffs ailege that 1t was made
TO appear that the net profits for the year
were S53, 677.3l. which was s.. 6773 81 In excess
of the unpaid stock. Thereupon dividend
of 30 per cent. was declared. which was ap-
piled on the payment of the stock
In question. The petition AYERS that the
company had not only made no money TO
justify dividend, but bad actually been
conducted ct a loss. and that large por-
ton of the S4s. $40 paid-in stock had been
lost. The dividend. 1t charges, was for
the purpose of leading creditors to
suppose that all the stock had
been paid IN and that the busi-
ness was prosperous. It Is further
charged that from time 10 time tie direct
ora caused to be given TO the various mer-
camille agencies false statements a. to the
condition of the corporations affairs. rep
resenting that they were tiourishlng.
Many of the charges made in the bill are
similar IN character 10 those made by the
Roam Iron Company in its suit for go. 600
against the indianapolis Car Company III
Superior Court No. / some time since.
"