Pittsburg dispatch. [volume] (Pittsburg [Pa.]) 1880-1923, 1891-08-16
NOT AT ALL PLEASED.
Eastern Creditors of W. E. Schmertz
File Their Bill in Equity.
CHARGES OF COLLUSION FREQUENT.
They Think That the Real Debts Are Far
More Than the Assets.
ASSIGNEE QUINBY IN RESPONSE TO IT

Schmertz failure was one expected for
several days past. There was filed yester-
day, in the United States Circuit Court,
before Judge Acheson, bill in equity
against W. E. Schmertz and certain of his
preferred creditors, as set forth below.
The bill was filed by Charles NJ. Lee, W.
F. Morgan and Dore, of Massachusetts,,
partners as W. F. Morgan & Co., the Myer
Rubber Company, OF New Jersey, the New
Jersey Rubber Shoe Company of New
York, the Fourth National Bank of New
York and such other creditors of William
E. Schmertz as choose to come in as plain
tiffs, and William E. Schmertz, William
Loeff1er, Amelia A Schmertz, E. NJ. Quinby,
S. Severance, w. H. McCleary, sheriff of
A1legeny county, and W. E. Schmertz &
Co., defendants.
SEVERAL THINGS ASKED FOR.
The plaintiffs ask for an injunction to re-
strain the defendants from proceeding on
their several writs of execution and restrain
ing Sheriff McCleary from executing the
writs; to restrain E. M. Quinby from collect
ing or using the said assets, except as the
court may direct; for decree by which all
the bill or accounts due Schmertz or
Schmertz & Co., may be available; for an
injunction restraining E. NJ. Quinby from
intermeddling with the estate of William
E. Schmertz.
A receiver is asked for and decree that
William E. Schmertz was insolvent when
he eXeculed warrants to confess the judg
ments, and also that the judgments were
collusive and fraudulent. J. A. Langftt
and S. G. McCandless are the attorneys for
the plaintiffs. Next Wednesday has been
designated as the time when the hearing
will take place.
Stripped of all but the necessary legal
verbiage the allegations of the plaintiffs are
as follows:
First-They are severally creditors of W.
E. schmertz; that Charles NJ. Lee obtained
confessed Judgment on August II, 1881, from
Schmertz for s5,047 80 due one day after date,
on which execution was issued August l3,
being one day after Schmertz's assignment
for creditors; that W. F. Morgan & Co. also
obtained confessed Judgment on the same
date from the defen ant for $20,8 ,853 81 due
one day after date, ON which execution was
issued as above. and that in addition the de-
fendant is indebted to Morgan Dore in up
ward of $4,000 on open accounts for
merchandise to the Myer Rubber Company
for goods amounting to several thousand
dollars; that he is indebted to the New Jer-
sey Rubber Shoe Company to the amount of
over 50, O00 and to the Fourth National Bank,
of New York. in the sum of 81, 500 for money
borrowed and which is now due and pay
able and in other large sums which are not
yet due and payable, and that the claims not
in judgment cannot be proceeded into judg-
ment and execution until on the preferred
claims hereinafter mentioned all the avail
able assets of SchmertZ will have been
seized and sold
CLAIMS OF UTTER INSOLVENCY.
Second - The defendant, William E.
Schmertz, is insolvent, and his debts very
largely exceed his assets. Defendants have
declined to inform the plaintiffs of the
amount of indebtedness and discovery
thereof is prayed and also that Schmertz
and such other of the defendants as are here
informed may be required and compelled to
state the amount and schedule of his liza
bilities. The plaintiffs believe that the in
debtedness exceeds the sum of 100000. The
known assets, exclusive of book accounts
ana bills, will not exceed 1928 900 at a fair
valuation, and on the real estate are two
mortgages of $50, 900 each, but this estimation
does not include certain stocks which have
been pledged to secure debts to others than
the plaintiffs The "others" are relatives
and intimate personal friends of Schmertz,
who have received preferred judgments by
confession and have issued executions which
have gone into the sherif7s hands and be-
come prior liens against all of Schmertz's es-
tate in an amount which exceeds $3.50 OO0.
a sum which will entirely exhaust his avail
able assets. Of this sum the defend
ant William Loeffler, an intimate friend
and business associate of Schmertz, holds
confessed Judgment which was entered Aug
ust l. 1891, on which said execution was issued
August for 800 600; Amelia A. SchmertZ,
wife of William E. Schmertz, entered a con-
fessed Judgment on August Z, 1891, for S54, 39s,
and at the same time E. NJ. Quinby
Schmertz's son-in-law, entered two con-
$2l, 16S and on the following day he entered
a third confessed Judgment for$lO :594 and at
the same time S. Severance, another son-in-
law, entered two confessed judgments, one
for 81, l2l and another for "a, 800.
AN ITEMIzED ACCOUNT WANTED.
Third-The plaintiffs believe and so charge
that the confessed judgments are greatly in
excess of any actual indebtedness owing by
schmertz to his relations or friends and
that the same are collusive and fraudulent,
and made for the purpose of hindering and
delaying creditors, and they pray that the
defendants be required and compelled to
discover fully and specifically each and
eyery debt and consideration for which said
judgments were confessed, and to exhibit
the evidence Of Indebtedness and consider
alton.
William Z. Schmertz has been insolvent for
a long time, and has been obtaining goods
and money from the plain titfs upon false
pretenses, and by and with the aid and
fraudulent connivance and assistance of the
other defendants, and they show that the
confessed judgment to Mrs. Schmertz was
entered on bond with a warrant to confess
Judgment dated December q. 1890, and the
same was kept secret by ner from that date
until August7 1891. That the judgment for
$2l, 1853 in favor of Quinby, and that for
2,l2l in favor OF Severance were
dated June g. 1s9l that for $780, 900 in favor
of Loeff1er on a warrant dated June ID, 1891,
and all the others on warrants dated June
Is, 1891 The plaintiffs aver that those Judg-
,oante were in ,June confessed and by the
defendants kept secret pursuant to plan
contrived between said Schmertz, Quinby
and Loeffier, and of which the other defend
ants had knowledge and which had for its
object the procuring of large stock of
goods from the plaintiffs and others IN Or
der that the same might be appropriated
through execution and sale for the benefit
of defendants.
OTHER CLAIMS MADE.
The plaintiffs further state that William
E. Schmertz represented to them and others
that he was entirely solvent; that he owned
the residence and property where lives and
which he now says has been for long time
the property of his wife, and that he had
good life insurance for the benefit of his es-
tate to the amount ofS235, 900 which was un-
pledged and which he now says has been for
a long time hypothecated to secure indebt-
edness
They state that E. NJ. Quinby has been
for five years the confidential business agent
and employe of Schmertz, and has been con-
stantly advised of all of Schmertz's business
affairs; that William Loef1er has been a
confidential adviser and that with the as
sistance of Quinby and advice of Loeff1er,
he has converted the said goods into book
accounts and credits by sales induced at ex-
traordinarily low prices and below cost, so
that at and Immediately before the entering
h. 1afa