The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1898-06-28
Mr.. KRAG ON THE STAND
PROBING INTO AFFAIRS
OF DEFUNCT GROCERY HOUSE.
Question as to Whether a Mortgage
or Assignment Deed Was
Signed First.

ton or attorneys that satisfactory settle
ment could be made with the creditors. At
the time the attorneys representing the
various interests were confident the COM
promise could be brought about, and all the
counsel was satisfied when Judge Allen de-
cided TO give the company another oppor-
tunity to settle with creditors. Since then
the hopelessness of a satisfactory adjust
ment of the litigation has become appar-
ent.
The investigation which began again yes
terday is being made at the instance of the
assignee of the insolvent firm, who has at
tackled the validity of the mortgages given
by the Krag-Reynolds Company just prior
to the assignment in December last. Attor-
ney w. r. Brown, assisted by Alexander G.
Ayres, is conducting the examination for
the assignee. Attorneys r. o. Hawkins,
John L. Grifiths and Hord & Perkins were
present yesterday morning as representa-
tives of the Krag7 Reynolds Company. w.
H.. II. Miller was there in the interest of a
New York bank, and Attorney General
Ketcham was present stp watch the case for
New York clients. Smith & Korbly, attor-
neys, and Morris, Newburger & Curtis were
also represented. l.. G. Walker represented
the receiver. Nearly all morning was taken
UP with an argument as to. the kilograms
which Judge Alef recently ordered brought
in at the request of the assignee. These tee-
grams passed between members of the
Krag Reynolds Company and Attorney
Hord and c.. NJ Reynolds while the latter
were in New York, Just prior to the as
signment. There was contention on the
part of the Western Union Telegraph Com
pany that the order directing that copies
of the messages be produced was not suf-
ficently specific and did not properly iden-
tify the desired kilograms. Judge Allen,
after hearing argument, held with the COM
pany and instructed the assignee to pre-
pare new order This will be done and
will demand all messages that may have
passed between Indianapolis and New York
between the parties mentioned at the time
stated. 4'A,i '-oIc9 p
w. A. KRAG ON THE STAND.
w. A. Krag, presidentfof the Krag- Reyn-
olds Company was put on the stand yes
terday afternoon to tell what he knew about
the affairs of the concern. 1t appears that
he left the financial management of the
company almost entirely to Charles M
Reynolds, who is not here at this time. He
stated, however, that he knew Mr.. Reynolds
was taking money out Of the firm 70 assist
relatives" but he did not know what the
amounts WERE There were many items con-
corning the business which Mr. Krag did
rot recall clearly when asked about them
He said he never knew of The exact condition
of the companys affairs until he heard OF
the facts in court. He had great confidence
in Mr.. Reynolds. who was his son-in-laW
He said that he and Mr. Reynolds and wife
and his sons all lived together Before the
assignment. he said. hesand five other stock
holders voted themselves about $1,000 "ad-
dtional pay" which. sum they divided. At
torney Brown produced a MEMORANDUM
showing that Sept. ~ last the kraR-
Reynolds Company gave three checks to the
law firm of Hord g PSsEl d the co 2apa
81 1888 and the other was for $1,000. Mr.
Krag could not tell why two of these checks
We're drawn for the same am amount: I'll He said
ices in connection with the reorganization
of the grocery firm,
Mr.. Krag was asked if he had signed the
mortgages made to creditors and the deed of
assignment. He replied that he had Asked
as to which he signed first, the second mort
not remember. Il am sure, he said, that
l did the right thing first" Judge Allen
spoke to the witness rather sharply, asking
strument he had Signed first. Mr.. Krag at
length replied that he signed the mortgage
first o.,
asked Judge Allen,
II suppose because did not think" re-
isn't it because you know you ought to
have signed it first that you remember it
now?' asked the court.
While the court was talking with the. wit
pess some of the attorneys were examining
the deed of assignment This investigation
revealed the b d, fact ct that the deed had never
taking up the document. stepped over to
you say you signed both of these papers,
did your he asked the witness.
Yes, sir: they were read to me first" re-
piled Mr.. Krag. The attorney handed him
the deed of assignment and asked him to
find his signature. MIR. Krag studied the
document intently and passed 1T back to the
attorney.
you signed the deed" remarked the attor-
ney..
Now. did you sign the mortgage?
YES, sir; that is my recollection"
SIGNATURE ON THE MORTGAGE.
The attorneys say that mortgage was not
signed by Mr.. Krag.- Both instruments
bear the signature of w. w. Krag, secre-
tary of the grocery company Mr.. w. A.
Krag's attorneys say that he had no dishon-
est intention when he told Attorney Brown
that he had signed the deed and mortgage.
They say he was confused, and did not un-
derstand clearly just what the attorney
getting at. Early in Mr.. Krag's testimony
he had spoken of being under strong pres
sure" at the time the mortgages and deed
of assignment were made. AS he was about
leaving the stand he was asked what kind
of pressure he meant .
Il meant that the. general pressure was
very great he explained. 1t would be-
hard to define it, Having the welfare and
saving of the business at heart l had,
and loving the business as | did, would |
not be under great pressure during such cir
Lafayette Perkins, of the law firm of
Hord a. Perkins, was called to the witness
stand. MIR. Hord stated at the opening of
the investigation that he and Mr.. Perkins
desired to waive all technical rights they
might have counsel for the krag-Rey-
nolds Company and were willing to testify
their clients. Mr. Perkins testified that he
was made trustee for the creditors under
the first mortgage, and that the instrument
had been pepared by himself and Mr.. Hord.
The mortgage was executed on Dec. q and
was kept in safe until Dec. q, when it
was recorded. The mortgage was kept from
the records for a week because the firm
hoped to get money in New York with
which to settle its indebtedness The mort
gage was finally recorded when word came
from New York that Mr. Reynolds had
failed to sell the stock in the Krag-Rey-
rodS Company which he had gone there
to dispose of. Mr.. Perkins explained that
dump stock on to the New Workers without
first letting them understand the condition
the firm was in Mr. Perkins told of carry
ing the first mortgage 10 Chicago and of
showing it to the president Of the First Ma
tional Bank Of that city. Mr. Perkins
reached the city after banking hours and
exhibited tho mortgage to the banker at
that he was second i'm the mortgage" The
president seemed well pleased"
Mr. Perkins said he received a telephone
message from Mr.. Hord, who was in New