Evening journal., 1896-12-05
THE FAMOUS GAS SUIT.
Argument Heard Before Judge
Wales This Morning.
3ONDHOLDERs WANT RECEIVERS
THE HEARING Is TO SHOW CAUSE
WHY RECEIVERS SHOULD NOT
BE APPOINTED-BILL OF COM
PLANT AND THE HEARING.

IIbDdDll no case III the dhhola -
court and finance has caused more in
terest than the celebrated case of God
frey Morse. George l.. Morse. execu-
tors OF Leopold Morse. deceased; Law
renee J. Logan and Paul X. Lincoln,
of Boston. and the Bay State Gas Com
pany, of Massachusetts, all of whom
are creditors of the said company.
THE CREDITORS COMPLAINT.
The bill of complaint alleges that
Godfrey Morse has two of the income
sbonds, each Of the par value of $1,000;
that Godfrey Morse and George l..
Morse, as executors. have six; that
Lawrence ]. Logan has FIVE, and that
the Boston Gas Company has twenty
five. all aggregating 100000. It also
reads that the company agreed to pay
to the bondholders per cent. inter-
est per annum, the net earnings to be
applied first on the payment of the in
terest. The income bonds amounted to
5000 000 and were issued on May l,
1889.
The creditors further say that ever
since the incorporation Of the defend
ant company, and until the last suit
against the defendant company, (Bu-
chanan and Bay State) J. Edward Ad-
dicks has been president of the COM
pany and a director therein, and by
means of the large amount of capital
stock held by him, has had entire con-
troll of its affairs, and all its officers
and directors have been named by
him and have acted solely under his
direction
After the suit here of Buchanan and
the Bay State Gas Company, the com
plainants allege that Addiclls resigned
as president of the company, and the
Bay State Gas Company passed into the
hands of the Standard Oil Company,
knowing that this suit was to follow.
In March, 1885, Addicks entered into
an agreement by which he was to pur-
chase and erect gas works in Boston
Then, after securing or building these
they-were transferred to the Bay State
Gas Company, of Massachusetts, for
$4,5O0,000 in cash and s4,50000 in an
obligation Of that company, payable in
ninety years or sooner, or at the COM
pany's own option.
Again. in March, 1885, Addicks trans
ferred all his rights in the obligation
to the Beacon Construction Company
of Pennsylvania of which he was
chairman, and held 1880 shares of the
company's stock out of total of 15,0 600
shares. On August 10, 1889. the Bay
State Gas Company, of Delaware,
transferred to the Beacon Construction
Company capital stock amounting to
s., GOO 000 and bonds to the amount of
100000, in exchange for the obliga-
tion of $4,5O0O0 against the Bay State
/ Gas Company, Of Massachusetts. and
that the Bay State Gas Company of
/ Delaware, was hereafter holder of the
/ obligation until it was "unlawfully, il
legally and without consideration.
transferred back to the Massachusetts,
company and cancelled"
The obligation of 81 100000 was the
! principal asset of the Bay State Gas
/ Company, of Delaware, until it was de-
prived of it. The transfer of the bond
was accomplished by alleged fraudu-
lent and illegal acts of ]. Edward Ad-
dicks, through the Bay State Gas Com
pany, of New Jersey, and the Mercan-
tile Trust Company, of New York, to
the Bay State Gas Company of Massa-
chusetts, where it was cancelled with
out consideration to the Delaware
company, and in this way the Delaware
corporation was deprived of it's prin-
cipal assets and source of income.
WHERE ADDICKS CAME IN.
The Mercantile Trust Company, OF
New York, in return for the cancella-
ton of the bond received 81 500, 600 OF
the capital stock of the Bay State Gas
Company, of Massachusetts, after
which the Mercantile Trust Company
issued additional United Boston Ga:
bonds to the amount of SS.30O,0O0 tC
Addicks, and he in turn transferred
them to the Bay State Gas Company
of Delaware. Addicks claims that th'
Delaware company was indebted t
him for certain things, and he ap
propriated to himself a large numbe
of bonds.
, In February. 1889. Addicks cause,
the Bay State Gas Company. OF Ney
o Jersey, to be Incorporated and he an
w. e. l.. Dillaway transferred all tn
. stock of the Bay State Gas Company
q the Boston Gaslight Company. all Q
the Massachusetts company to the Ba
State Gas Company. of New JERSEY
and the Mercantile Trust Company. c
;, New York, and bonds were issued fo
: ! the New Jersey company through tn
> trust company to Addicks and Dilla
= way to the amount of S7.OOO,OO frs
> series. and SO, 600, 600 second series. Sui
Il seQuently the New Jersey company Is
y sued bonds of the first series to tn
y amount of s750,O00.
/. THE COURT HEARING.
The proceedings in the suit wer
y opened by Samuel Dickson of Phila
7, delphia. senior counsel for the bond
a holders. Mr. Dickson's sole argumer
- was based on the unbusiness like wa
the company carried on business, an
said that he would furthe
show that the bondholders Of the con
le pany are entitled to the fullest shaI
et of the company's profits.
)f Judge Wales-"Did the bondholdel
he know that their bonds were cancelle
De by the company"
4 Mr.. Dickson-"No, not until aft'
the suit of Buchanan and the Bay Sta
Gas Company
Mr.. Dickson argued that the cou
u and the bondholders should know Il
go proceedings of this company since i
X incorporation. I'VE will show,
said. that this company has unlaS
4 hold ,frf