Evening star. [volume] (Washington, D.C.) 1854-1972, 1894-12-10
The Fidelity Company Agrees to the
Appointment.
PROCEEDIN GS In COURT TODAY
Company Says the Business Will
Be Resumed.
AN EXPERT ACCOUNTANT

ard Investment Association and the Co
lumbia Building, Loan and Investment
Association, in which the compliments
complain that the two associations are in
solvent, that shareholders have been de-
ceived and defrauded, and asking for the
appointment of receiver and the wind
Ing up of the affairs Of both associations
Last week Judge Cox granted temporary
restraining order, returnable this morning.
Subsequently, Judge Hughes OF the United
States circuit court for the eastern district
of Virginia appointed G. Hatley Norton OF
Alexandria, Va, receiver for the first
named association. Saturday, however,
Judge Cox granted restraining order
against the receiver, returnable this morn
ing. Hence both matters were considered
this morning.
The court room was filled to overlooking
when Judge Cox called up the case, most
of those present being stockholders.
The defendants were represented by MI.
l.. c. Williamson: the various complain
ants being represented by Messrs: II. w.
Sohon, l.. II. Poole G. A. Brandenburg, A.
H. Ball, r. w. Bishop, j. A. Ralston and
others.
Mr.. Sohon stated that he did not believe
that the appointment OF receiver would
be resisted by the defendant association,
and would like to hear from their counsel.
An Expert Statement.
Mr.. Williamson stated In reply that he
would first like to have read the statement
of an expert accountant, who had carefully
examined the books of the association. 1t
was due. he thought, to the public and as
sociation that the statement should be
read. That is, of the Columbia association.
controversy here arose as to which
was which, counsel for the complainant
contending that the Columbia Building,
I.O2 mo ACSn 10 md hl
Fidelity Building, Loan and Investment
Association were in fact one and the same
association.
"A generic term" remarked Judge Cox
Yes, your honor" replied Mr.. Sohon,
and SO mingled together as to deceive
shareholders"
After a short discussion as to the man.
ner of proceeding. Judge Cox on the mo-
ton of Mr.. Brandenberg, decided to have
read first the bill of complaint and then
the answer Of the defendant.
Thereupon Mr.. Sohon read the bill of
complaint, which has been heretofore
printed in The Star, and the amended bill,
which complains that the books and al
fairs of the two associations so COM
mingled together as to be those of one.
praying for the appointment Of receiver
and the winding up OF the affairs of both.
The bills of complaint of the various in
tervenors were read by Messrs. Ralston,
Poole and Brandenberg, as well as that Of
Mr.. Ralston asking for the appointment of
Loan Association
Mr.. Williamson, before reading the an
swers filed by the defendants, said that Mr..
Frank l.. Morning. member of the Balti-
more bar. and an expert accountant, had
examined the books OF the Columbia Asso-
citation and would submit his report
Says Plans Are Feasible.
Mr.. Morling stated that he had made
very full and complete examination of
the books and business of the Fidelity
Building, Loan and Investment Associa-
tiCn, which later became the Columbia, and
from the excellent manner in which the
books were kept he was enabled to say
that their plans were perfectly feasible and
practicable. lie then read long written
statement describing the scheme set forth
in the circulars of the association, and
explaining that the same scheme was be-
ing successfully carried on by more than
one similar concern in Baltimore, Md. A
great mass of figures was quoted, and upon
the conclusion OF the reading of the state
ment, Mr. Morling stated, in reply to Judge
Cox, that the assets were s9O27, and the
liabilities SD,3l3 and explained that he
had not questioned the figures in the ac-
counts
THAT, your honor" remarked Mr.. Bran
denberg, shows at once that the assoCia-
ton is insolrent."
Defendants Answer.
Mr.. Williamson then read the answer to
the bills of complaint. which was a general
denial of the allegations of the complain
ants 1t was admitted that one-half of the
amounts paid in weekly was devoted to
the expense account, but it was contended
that the other half compounded weekly
would bring to stockholders the returns
set forth in the circulars. In conclusion,
the answer recited that in view of the
present litigation and the prevailing finan-
cial depression, the appointment of some
COmDetent person receiver would he
the interest of all concerned. and that in
due time the association would be enabled
to again resume business.
Mr.. Williamson said that in appointing
the receiver he hoped the court would con-
slider the interests of all concerned Most
of the loans had been in Pennsylvania,
Maryland, Virginia and West Virginia, and
while this was the home office, the legal
home of the association was in Alexandria,
Va. He also hoped that the business of the
association would not be arrested by the
appointment Of the receiver, but that
shareholders should continue to keep up
their payments.
Continuing Payments.
Judge Cox remarked that no new bust
ness could now be reasonably expected
that is, the bringing in of new stockhold-
ers-and as to the present stockholders
continuing their payments. the same ques-
ton had arisen in the case of the Wash
1ngtOn Eene1lc1al ana ENDOWMENT ASSOC1a-
ton, the question having not yet been de-
cided by the court.
The matter of receiver having been
agreed upon for the Columbia Building,
Loan and Investment Association, the sue
cessor of the Fidelity Building, Loan and
Investment Association, the question of
who the court should appoint came up.
The counsel for the compliments did not
wish any one suggested by the defendants
appointed, and Mr.. Williamson thought the
court should appoint some man outside Of
counsel for the complainants
He explained that the officers of the as
ISOLATION wished the very fullest inyesti-
CATION by some good and competent man
to be named by the court, having the ut
most confidence in the result of such an
investigation.
Several names were suggested to Judge
Cox that of Mr.. John Joy Edison being
the most favored. and the court took the
matter under advisement.
Restraining Removal.
Mr.. Ralston then called up the applica-
ton for an order restraining Receiver Nor
ton of the Fidelity Building and Loan As
ISOLATION, the parent concern. Mr.. Ralston
stated. from taking possession or removing
from the District the assets of the asso-
citation.
He contendei that Mr.. Norton, having
been appointed as receiver by the United
States circuit court for the eastern district
Of Virginia. had no authority to act as
L., &c, CT vi Of Mr. N~rto