Pittsburg dispatch. [volume] (Pittsburg [Pa.]) 1880-1923, 1891-08-20
SCHMERTZ IS AHEAD.
He Scores in the First Inning Against
His Eastern Creditors.
JUDGE ACHESON DECIDES FOR HIM.
No Evidence That His Failure Was Not
Strictly Legitimate.
ANOTHER SUIT AGAINST MIR. CHAMBERS

The preliminary hearing in the case O
certain Eastern creditors against w. E
Schmertz and his preferred creditors wa
held yesterday in the United States Cir
cult Court before Judge Acheson. Attor
ney W. S. Pier, representing the plaintiffs
presented in detail the charges contained
In the bill in equity as published in last
Sundays DISPATCH, and Willis F. Nc
Cook filed his answer to the charges, in
lengthy affidavit, the contents of which
were published exclusively in yesterday.
DISPATCH.
In spite of Mr.. Piers strong presentment
of his case, the decision of the court was in
favor of the defendants. In presenting the
record of judgments entered against and
confessed by William D. Schmertz, Mr..
Pier said: 'T would respectfully call the
attention of the court to the fact that the
| judgments referred to were obtained by Mr..
Schmertz's attorney, who was acting at that
time in behalf of the parties in whose favor
the judgments were confessed. I think it
is pertinent to call the attention of the court
| to this point
Mr. McGook-Why do you refer to me as
| Mr.. Schmertz's attorney?
Mr.. Pier-Are you not here to represent
! Mr.. Schmertz?
| Mr.. McCook-I am, but have become
Mr.. Schmertz's attorney only since Mr.
Kennedy went upon the bench. Prior to
that time he attended to Mr.. Schmertz's s
business.
PERTINENT PROCEEDINGS.
Mr.. Pier replied that he thought these
proceedings were pertinent to the case, as
it showed the familiarity of the attorney
with tho proceedings of his insolvent client.
He then proceeded to read affidavits made
by George NJ. Lee, Charles 1. Ingalls,, william
F. Morgan and J. Edward Simmonds. These
affidavits related certain conversations held
by them with Mr.. Schmertz. This gentle
man assured each and every one of them
that he was perfectly solvent, and that he
was worth at least 5000 over and above
his liabilities.
Next Mr.. Pier read the affidavits of George
NJ. Lee, Charles L. ingalls,. William f. Nor
gan, j. Edward Simmons. The statements
contained in these affidavits were to the
effect that William f. Schmertz had called
upon the affiants and volunteered the in
formation that he was worth fully $780, 900;
that he had an insurance upon his life for
over $200,000, which in case of his death
would cover his entire indebtedness. That
upon these representations the atlantis had
given William f. Schmertz additional
credit. In his affidavit William F. Morgan
schmertz said to him: "Living or dead
William +. Schmertz will pay 100 cents ON
every dollar of indebtedness"
II. D, Sellers, who had been employed as
bookkeeper for w. +. Schmertz from July,
1855, tolJuly, 1890, submitted an affidavit to
the effect that William Loetlier, who is
Treasurer of the L. C. Schmertz Company,
Limited, had frequently indorsed notes for
Schmertz. and at the same time had told
affiant he was doing an illegal act in signing
his name to an Endorsement, as it was in
violation of the act relating to limited part
nerships.
Quincy AS SCHMERTz'S SUCCESSOR.
Mr. Sellers also AYERS that E. NJ Quinby,
for some time past has had full control of
the business of W. Z. Schmertz & Co. He
also declares that from his knowledge of
Sohmertz's business nearly a year ago, his
liabilities were then fur in excess of his
assets.
Christian Meyer, in the employ of W. Z.
schmertz & Co., stated in his affidavit that
he had hauled goods from his employers
place of business to the Baltimore and Ohio
depot, after the executions had been issued.
The affidavits of several retail shoe dealers
were read, in which they declared that they
had bought large quantities of goods during
the past summer from W. f. Schmertz Il
account OF the extraordinarily liberal terms
offered.
George f. Simon, retail shoe dealer of
Allegheny, in an affidavit averred that he
purchased goods from w. E. Schmertz just
previous to the failure, for no other reason
than that the goods were offered TO him at
an extraordinarily low price; that he also
received notice that the bill for such goods
had been assigned to f. NJ. Quinby, to whom
he was instructed to make payment.
w. S. Pier in his argument said: "If the
10 nf a q fS IN
go on, 1t will result in sweeping about $780,
600 of the Eastern creditors money into the
pockets of Mr.. Schmertz's relatives. We
have charged n fraudulent combination on
the part of Schmertz and others, and we
have proved our claim. On the 18th day of
June, 1891, Schmertz confessed Judgment for
500 900 to William Loeffier. This money, or
at least portion of it, would eventually go
into the pockets of immediate relatives of
Schmertz: The amount of Judgment con-
fessed by SchmertZ on June IS to Immediate
friends and relatives reached the sum of
$3.50 00J, a sufficient amount to sweep out all
the claims of the Eastern parties whom 1
represent.
'tEleven days after these notes were given, |
William E. Schmertz went to Eastern firms
and purchased another lot OF goods. He |
represented himself at the time as being |
perfectly solvent, and told one of my clients |
that he was worth at least 100000 over |
and above his liabilities, and to use his |
language; to the President of the Fourth |
National Bank of New York, when asked as |
to his financial standing: William f. |
SchmertZ, either dead or alive, is fully able |
to meet all his obligations
"These representations were made to |
Eastern creditors, knowing at the same |
time he had given notes to the value of $780, |
O00 and his financial standing was affected |
to just that extent.
AN INVESTIGATION ASKED.
at seems to me that this case is of suffi- |
cient importance to warrant q judicial |
If the injunction is granted |
or receiver appointed, it would do no |
harm to the defendants in their preferred |
claims, but would enable us to ascertain |
exactly the financial condition of this man !
Schmertz, who, if he would make false rep |
to his creditors, would not |
hesitate to carry on his fraudulent pur- |
out of the reach of his creditors, by making |
an assignment to take care of his immediate |
relations
1T is the trend of Jurisprudence to do |
away with preferences when corporate
body or firm makes an assignment; in fact,
an act Of assembly passed in this State has
forbidden preferences in assignments"
Attorney McCook. read the answer of the
respondent to the bill. This answer was as
stated fully and exclusively printed in THE
DISPATCH yesterdayand makes general and
specific denial of all the charges brought by
the plaintiff
The affidavit of E. NJ Quinby was next
submitted. In it the atfiant denied all the
allegations of the plaintiffs. He said that
aside from the department in which he was
employed he had no knowledge of Mr..
Schmertz's business affairs, in fact, up to
within few days previous to the execution
of the judgments he had considered Mr.,
solvent; in fact, had looked upon
him as n wealthy man. He had taken about
$50, 900 in book accounts, in trust for others,