The Portland daily press. [volume] (Portland, Me.) 1862-1921, 1896-12-21
THE OTTAWA COMPANY.
Judge Haskell Dismisses the Bill
With Case.

History of Doings Alleged to Be
Fraudulent.
Saturday morning, Clarence Hale, ESQ.,,
and Byron D. Verrill. Esq, appeared
before Judge Haskell in the Supreme
court to present the case of Francis
Gushing against the Cushing's Island
Hotel and transportation company.
This is the equity case which has been
mentioned in the papers from e. time to
time. The testimony had been taken
and the type written copies. together with
the various documents presented as parts
of the case would have filled busbel
basket The hearing occupied the entire
day, and at Its cloge Judge Haskell
directed the clerk to enter decree dis
missing tne bill with costs. 1t is under
stood chat MIR. Cushing will carry. the
oaAe to the law court The con-
1foversy between Mr.. Cushing and his
former associates in the erection Of the
Ottawn house on Cushing's Island is Of
several years standing. 1t eliminated In
the bringing Of this suit. In the bill, it
Is alleged that the respondents, Mes
srs. 4. o. Pitcher, s. r. Small, George
4. Wescott. Edward Daveis and Mar
shall Il. Cooling entered into conspira-
cy to obtain the control Of the property
and to "freezs out'' the complainant. 1t
was alleged that in carrying out this
design they frnudulently issued
Che stock and bonds of the company
by means of e contract with John W..
Burrowes, who did most OF the work in
the erection of the hotsl it was shown
in the evidence quoted by the counsel 10
sheir arguments that Mr. Burrowes mace
a proposition to do his part OF the Work
of construction for S8l, 500, but that the
contract made with him called for the
payment of S45, 600 in stock and $20, 700
in bonds at par, a total Of 500, O00 1t was
further shown that by agreement be-
tween Mr.. Burrowes and Mr.. Z. u.
Spring, these securities as soon as they
were transferred to Mr.. Burrowes were
purchased of him by Mr.. Spring at
price which resulted in the payment to
the con tractor of the sum for which he
had originally offered to do the work
with small amount additional for labor
performed which was not Included In
the contract. 1t was alleged that By
means of this proceeding the respondents
obtained control of the property at the re-
Organization of the company after the
foreclosure of the mortgage and that Mr..
Gushing was then frozen out.
The Casco bank was largely interested
in the new company having taken the
securities of the old for money advanced.
On the other hand it was contended
that the issue of stock and bonds COM
planned of was not intended to defraud
Mr.. Cushing but was done in order to
facilitate the sale OF the bonds, it being
found impossible to raise the money by
the sale of the stock. 1t was further
claimed that Mr.. Gushing, who was a
director in the company at the time OF
the transactions, was party to them and
more than that received pay for his own
services in connection with the erection
of the hotel by an issue of stock similar
to that of which he complains 1t was
also argued that the granting of the
petition to act Gside the issues OF stock
and bonds and the sale of the property
would work injury to innocent holders
who had bought stock and bonds in the
open market. These and many other
points were touched upon by counsel in
an elaborate pesentation OF the case
Oh behalf Of Mr.. Cushing
briefly outlined the claims Of
the complainant He said that Mr.. Bur
rowes was to receive STOCK ostens1bly Tor
himself but really for the Casco bank and
the individual respondents. The ownership
of stock by the bank was based on this
Illegal issue. Mr.. Gushing had no know
ledge Ct the conspiracy. At the time the
mortgage was foreolosed and the property
bid IN, the bank was charged with notice
of the alleged fraudulent transactions.
The new corporation was then formed by
the respondents but MIR. Gushing was
excluded. The complainant accordingly
asked that the court set aside the fore
closure, restore Il illegal issues OF the
securities of the co npany and place it in
the hands of a receiver.
Mr.. Hale quotsd the testimony OF 1Mr.
j. W. Burrowes, ths contractor. Mr..
RurYowss testified to making his bid of
Of the contract for $65, 600 in stocks and
bonds. He understood that he was to
build the hotel for $51, 500 and he got his
money from time to time as the work
progressed through Mr.. Il. @. Spring in
checks. He surprised Mr., Spring was the
treasurer. He could not recall whether
there was any writing other than the
been one to take in the STOCKS and bonds
and give him the money. He had their
word for it and perhaps had writing.
He never had any of the stocks and
bends exoeptAto take them in his hands
afl,i sign for them. His talk was almost
entirely with Mr.. Pitcher, the president
of the company. Mr.. Pitcher said the
make it non assessable. The witness did
not recall that Mr.. Pitcher said any
shipg about making the STOCK paid up.
Then Mr.. Hale read from the testimony
of Mr.. George II. Knight, one of the first
directors Mr.. Knight testisfied to the
ISSUE of $50 shares Of stock to Mr.. Cush
ing to pay for the land conveyed to the
company. Mr.. Knight subscribed for the
shares and gave his check fer 81. 1000 but
9he check was returned to him subse-
auently, he and three other directors re-
ceiving ten shares each for their services
in helping organize the enterprise. At
the time he gave the CHECK he did not
expect to have il returned.
The shares given the directors were
included In the first $50 issued SO that
Mr.. Cushing finally received ITO shares
of par value of 81, 900.
Mr. knight recalled Mr., Burrowes's
proposition to do the work for s3l, 500
and the directors voted TO accept it.
Afterwards the contract for the $65, coo in
stock was made with view to getting
the stock paid up. 1t was Mr.. Pitchers
idea. Mr.. Spring was employed as an
intern ediary. There was never any vote
passed authorizing any mem Der to raise
M ,uey. The witness did not know where
thu money came from which Mr.. Spring
paid Mr.. BuFrowes.
From the report of the cross examina-