The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1895-07-18

j. ". FARWELL & co. ASKED To TURN
UP $12,s4O,O0O IN SECURITIES,
Said to Have Been FraudulentIy
Transferred by the Defunct Potter,
Lowell a Co.., of Boston.

CHICAGO, July H.-John Brooks and
George ID. Bullen. assignees of Potter.
Loveil d Co., to-day flied a bill of discov-
cry against the firm of j. v. Farwell &
Co., of this city. asking that the firm be
compelled to account for sl2,e40O00 of Sc
curities which it is alleged were fraudu-
lently transferred on the eve of the as
signment of Potter, Lowell e. Co., in Au-
gust, 1890.
Potter. Lowell & Co. were stock brokers
with capital of 100000. and at the time of
their failure they had assets of s. 900, ,0oO
and liabilities of $4000,O00. A few days be-
fore the failure, 1t is alleged i'm the bill, Sc
curities valued at $50O0,0O0 were taken from
the firm and secreted- Potter, Lowell & Co.
did brokerage business with the Farwel
Company. and John " Farwell a
stockholder in the firm OF Potter, Lowell &
Co., from Jan. l TO Aug a. 1890. 1t Is al
legged that before the failure the firm fraud
uiently appropriated 10000 Of other peo-
pies money and pledged $5o0.0oo more. II is
claimed that the Farwells were cognizsnt
of these transactions. 1t is also alleged
that the transfer Of large number Of Sc
Co.. and that John t. Chumasero, part
ner of John " Farwell carried these securi-
ties out of the State of Massachusetts.
The securities said to have been taken are: (:
Five notes OF c. w. Clement, trustee, $50 900
each. or $3.50. 900; 400 shares of stock in
gage bonds, Gogebic Development Com
pany. $4,000; 5000 shares stock In same
SIS. 900; ESQ first mortgage bonds. Brazos
River Channel and Dock Company, $40, 600;
$50 bonds Gogebic Development Company.
$3.50, ,000:s $4,000 shares in same. 50 450. 600;
81. .125.000. The suit was filed in the United
States Court.
Charles r. Harding, attorney for John ".
Farwell & Co., made the following state
Fap rdi N
I'm the fan of 1890 Potter. Lowell CO.
were owing the John V. Farwell Company
been 'oSi owing git it to them for a long time.
Perhaps year before they failed, Potter.
Lowell & Co. gave the John v. Farwell
Company collateral note for the debt and
deposited 10 secure it, some of the bonds
or stocks which are the subject OF this suit.
Many of the stocks and bonds. and other
things mentioned in the demand, were not
so deposited with us and never have been
with us. Some days before the failure this
collateral note was renewed and the same
securities were again set out in the new
note. These securities consisted OF a large
amount at par value OF Gogebic stocks and
bonds' bd of i,sle or S'ee na vsIe razos
seen the bill as filed. but understand its
object Is to recover back under the in
Solvency laws OF Massachusetts, securities
given Immediately before insolvency pro-
ceedings were had in the Potter. Lowell &
CO. failure.
.'The insolvency law of Massachusetts
provides that the transfer of any securities
within six months OF insolvency is a fraud
ulent transfer and the securities can be re.
covered for the benefit of the creditors O,
the insolvent- The basis of this suit. except
in so far as IL is charged that John V. Far.
well was director of Potter. Lowell & Co.
up to tls.s time OF failure and the ai.ega-
ton OF the appropriation of funds belong
ing 10 other persons, Is this statute. The
John " Farwell Company claims that such
of the securities as IL ever had were trans
ferred TO il about year before the in
solvency proceedings. and hence do not come
within the statute. The complainants
maintain on the other Rand that the re-
newal of the note only few days before
the insolvency proceedings was a new
transaction and bring it. Sithin the stat.
ute."