The Jersey City news. (Jersey City [N.J.]) 1889-1906, 1893-08-12
Charles S. Clarke's Deal
ings With the Washing
ton Catering Co.
STORY OF STOCK MANIPULATION
Two Suits To Set Aside Con-
veyances Brought BY Re-
ceiVer Bowen.


ances from the Washington Catering ICo.
to Clarke. and from Clarke to De Witt
Van Buskirk. Three sets of subpoe aas
have been issued to the Sheriff requiring o
the parties to appear before the Cbancei.
lor In Trenton, where the bills of com
plant have been filed.
GUILTY AND CORRUPT INTENT.
The bills in the first two suits are sub
stautially alike and allege that after the
incorporation of the Washington Cater
ing Company it purchased soma ten lots
of land on Cornelison avenue for the use
OF IFS business. that on the 26th day OF
January last Clarke ami Edward T.
Mitchell held meeting of the Board of
Directors at which they authorized the
sale OF tue property to Clarke. Jr., aud
That under said resolutions deeds were
delivered to Clarke and placed on record
on May 4, which was the time the cor
poration suspended business; that Clarke
never paid any consideration for the con-
Veyances; but that they were executed
and delivered to said Charles S. Clarke.
Jr.. without any consideration whatever.
in pursuance of guilty and corrupt in
tent to cheat and defraud the creditors Of
said corporation and to hinder ana harass
them in the collection of their Just
debts"
TITLE NEVER ACQUIRED
These bftls further allege that Clarke
never acquired any title to the property.
but that 1t is the property of ths receiver;
that on the q, of last July Clarke aud
his wife conveyed the property TO De
Witt Van Buskirk for the consideration
OF one dollar land other valuable con-
slderations," but that the conveyanees
were not recorded until several days Of.
terwards. The receiver prays for an iu-
junction restraining Clarke and the
ntl,a I'M fari,,
erty, and asks that be ordered to recon
vey to the receiver.
MANIPULATION OF THE STOCK.
The third bill OF complaint is filed
against Clarke personally, and the basis
of it seems to be his manipulation of the
stock OF the company. 1t appears from
this bill that after the incorporation of
the company. Charles 5. CLARKE. Jr..
James G. Clarke aud William Heifer,
who were the incorporators held meet
ing at which Arthur j. O'Brien, now an
employee of the Board OF Street and
Water Commissioners, was elected
President. and Charles S. Clarke, Jr., !,
A certificate for fifteen shares was
issued to Charles S. Clarke. Jr.,
certificate for one share was issued to
James G. Clarke and certificate for five
shares was issued to VIM. Heller. Heller
Immediately transferred his shares to
" DEl6H duu " DEleu transferred them
back to Heller. Heller then transferred
them to james c. Clarke. and he in turn
transferred them TO Charles S. Clarke,
Jr. The receiver charges that ths cor
poration never received auy cousidera-
ton for this stock other than by means
of transaction manipulation by Chas.
S. Clarke, Jr.. in about this way: Clarke
entered upon the stub of tine cneck book
OF the company memorandum that a
check for $500 had been issued to Heller
and then issued check for $500 to
bearer. which Clarke deposited jn his
private bank account. Clarke then drew
his personal cseck for $500 and deposited
it to the credit of the company In paw
ment of the stock. The receiver alleges
that Heller never saw the check ana that
it was issued without any legal author
ity.
THE OUTRAGEOUS SALARY GRAB.
Ihe complaint then goes on TO say that
resolutions were passed by tha Board of
Directors fixing the salary of Heller as
manager at 5000 week and of Clarke as
treasurer at $500 o week; that resolu-
tion was then passed authorizing the
treasurer to dispose of stock of the COM
pany to the amount of $l2, 600 at par. the
proceeds to be deposited to the credit of
the company; that Clarke and Mitchell
then Issued a certificate to Clarke, Jr.
for $4,000 worth of the stock, and thai
ing three checks against The funds
of the company; one of the checks was
for $500 to bearer. and the check book
says the s., 800 was TO pay Heller for his
services as manager to June IL, 1892, al
though Heller had resigned as manager
on Marcn l. 1892. Another OF the cnscks
was for S., 200 to Clarke and the cheek
book says this $500 was to nav for
Clarke's services as Treasurer. A third
check WAS drawn to bearer for $4, 900, and
the check book says this was on account
or loan made 10 the company by Mary E.
Clarke, Clarke's wife. The receiver says
Clarke deposited these three checks, ag-
gregating $4,000, in his private bank ac-
count, and then deposited his personal
check for 1000 to the credit of the COM
pany In payment of the stock.
The receiver charges that neither
Heller nor Mrs. Clarke ever saw the
checks supposed to have been issued to
them, and that Clarke drew the three
checks for 1000 without any authority
whatever. the receiver further charges
that the resolutions fixing the salary of
Heller and Clarke at 5000 week escn
were passed merely as a pretexs for fas-
tening large debt against the corpora
t1on and that 1t was not intended That
either Heller or Clarke should perform
any services reasonably worth $500 per
week and as matter of fact neiLner OF
them ever performed any services reason
ably worth any such sum as $200.a week
THE ''DIvvY."
The bill then calls attention to the fact
that on May 3last bills Of sale and otnsr
instruments were executed with the In
tention of dividing all the assets of che
corporation between Clarke. his wife aud
Mitchell, and the corporation then sus-
pended business hopelessly insolveu5
On the very next day. the bill charges,
Clarke transferred 1874 of his shares t.,
Mitchell five shares to VIM. A. Buck
ridge and one share TO j. Eahbel, AID
then resigned from the company. The
receiver alleges thot the bills of sale nd
other instruments were fraudulent an d
that the parties to whom Clarke trans-
ferred his stock ara utterly WORTH
less financially. and that the co.
tire transaction was conceived and
carried into exec ution bv Clarke for the
purpose of cheating and defra uding the
creditors of the company.
The receiver asks chat the alleged con-
sideration for the 100 shares of STOCK be
declared fraudulent. and that Clarke be
compelled TO pay the receiver $12500.
The bills of sale and chattel mortgar es
have already been declared fraudulent,
and Clarke and Mitchell have been COM
pelled toreturn The goods covered thereby
10 the receiver.