Evening star. [volume] (Washington, D.C.) 1854-1972, 1895-04-10
THE TWO COMPANIES
A Report on the Intricacies Of the
Fidelity Associations.
SANE OFFICERS FOR BOTH
Affairs Were Greatly Mixed, but
There Was a Division.
DIFFERENT INTERPRETATIONS

Pursuant to the order of the court of
February 10, 1895. the auditor of the court,
Col. James G. Payne, today filed his report
in the case of Wheeler and others against
the Fidelity Building, Loan and Investment
Company. The auditor was directed to
ascertain and report to the court whether
this company and the Fidelity Building
and Loan Association were the same or diff
ferent associations, and If the latter to
state and report the accounts between
them. AS result of his investigation the
auditor reports that while the business,
liabilities and resources, as well as the as
sets, Of the two associations have been so
thoroughly commingled as to render them
between themselves practically the same,
they are not the same for all purposes or
to all intents, but. in legal contemplation,
and as to the rights of innocent stock
holders and creditors, are different associa-
tions
Explaining that he has reported on the
main question at this time, at the sugges-
tion of the parties and for the prompt in
formation of the court, Auditor Payne
says that unless otherwise directed he will
now proceed to state the account between
the two associations But he states that
while there may be some difficulty in stat
De-
tween the two associations, it sufficiently
appears that at least an approximate ac-
counting may be had.
The Fidelity Association.
The report shows that November IL, $780,
the Fidelity Building and Loan Association
was Incorporated at Alexandria, Va, by
Harrison Dingman and others. The capital
stock was to be not less than 10000 nor
more than $1,OOO,OOO, in shares of 500 each,
payable in monthly installments. there to
be not more than nine directors. March IT,
1891, tho certificate of incorporation was
amended by increasing the number of di-
rectors to not more than twelve. Contrary
to its charter stock was subsequently is
sued upon weekly payments, such stock
being known as stock of classes C. and d
July 8. 1891. 1t was unanimously resolved
to separate the weekly plan and reimburse
the association for the expenses incurred
thereby.
Another Word.
July @, 1891, the parties interested in this
association were granted by Judge Norton
Of Alexandria, Va, a charter Incorporating
the Fidelity Building, Loan and Investment
Association, the stock to be not less than
S1,OO0,OOO nor more than s2O.O0OOOO, in
shares Of 5000 each, payable at such times
and such installments as the board of di-
rectors might prescribe. The officers for
the first year were substantially the same
as those then managing the other assocfa-
ton. 1T Is a singular fact" says the au-
ditor, land one worthy Of note, that there
Is no record of a preliminary meeting of
the parties to organize this association, or
to provide articles of association, consti
tuition or bylaws: nor does 1t appear that
they at any time formally fixed the amount
of their capital stock or of the stock to be
issued"
The Same Officers.
The auditor states that while the weekly
business of the former was transferred to
the second association, there is no separate
record of the proceedings of the latter as
sociation until June, 1898. He finds that
the business and management of both as
sociations were commingled, and there was
particularly a mixture of the monthly and
weekly business. The officers and other
officers of the two associations were SUBJ
stantially the same, and officers and direc-
tors for one or the other were elected, VINO
were nd Il any time stockholders, and the
president of the two associations stated
that "he had nothing in the second or in
vestment association" The correspondence
and printed matter of both associations the
auditor found to contain evidence OF an
identity of purpose and administration.
Instructions to agents were to make checks
payable to the investment association.
Proceedings Unauthorized.
The auditor says that the irresistible con-
illusions are that the broad charter of the
investment association afforded wider
fields and greater opportunities; that in
the administration and conduct of the af-
fairs of the two associations there is a
substantial comminging of the business,
liabilities, assets and resources as between
the two associations, ard their dealings
with shareholders and the public; that the
. lot tnr ty
merged and was absorbed by the invest
ment association, and that the sharehold-
ers not participating in or asserting to the
acts of commingling and merging have
rights of which they cannot be diveSted by
the unauthorized and unlawful proceedings
Of the management.
Had No Power.
The directors had not, says the auditor,
the power, either under the char
ter or in law, to transfer the fran
ch.se Of one association to the other.
nor as there any attempt to do SO
by formal act or proceeding. Although, he
states the substance may have been large
ly transferred or commingled, there still
remains the chartered structure Of two dis
trict corporations amenable to law as such,
and having the qualities and responsible
ties of separate legal entities He also
states that there are shareholders not ap-
Eearing to have participated in or assented
to the acts of transfer or merge or COM
raingling of the business, appears from the
stock books and other records exhibited in
this reference
Motion Made.
After the auditors report had been filed
Receivers Poole and Williamson moved the
court TO require the Virginia receiver C.
Hatley Norton, to bring back into this
jurisdiction certain assets and papers al
legged to have been taken to Alexandria
The motion was argued at considerable
lergth, and Judge Cox took the matter
ul der adviSement.
LIEUT.. RANSGMS RETIREMENT.