Arizona republican., 1902-12-15
DENIAL OF FRAUD
 IN OLD DOMINION
BigeIOW Files Answer to the
 Boston Complaint
The Organization of the Company Was Decided Upon After the Baltimore Deal Had Been Completed.

low, has filed an answer and q Gemur- rer to the bill of the old Dominion Cop per CO., of Globe. Arizona, in which the latter seeks restitution O; certain stock alleged to have been obtained through fraud In his answer to the bill every anega ton of fraud is denied. The answer is 9 document of at least 15,OO0 word and is interesting, as showing the methods of organization of the old Dominion, as set forth by Mir. Bigelow. The answer says:
 "On April 90. 1895. J. Morris Mere dith procured from one Of the executors Of the will of Michael II. Simp~on for $2,000 an option tp himself and assigns Ter the purohse of 17S57 shares Of the capital stock of the Baltimore Old Do- minion Co, at $40 per share, or $71i28O payable Sl0o,00G in cash and balance in per cent notes. Upon execution of the contract it was assigned to Le- nard LcwisohC. Later. Meredith purchased tne remaining stock interest in the property shares-from William Eeyser.
 Prior t. May A. 1895. said Lewisohn agreed to give tha defendant one-half int--est in the Simpson stock under said contract and the defendant agreed to furnish oue-half of the purchase price. Subsequently it was arranged that in the purchase Of the Keyser stock the defendants interest shCuli be twO-thirds and Levisahn's ouc-third.
 "On May 2l. 1895, a syndicate called the Old Dominion syndicate consisting Of the defendant Lewisoau anI others. formed a pool. and it was agreed that the said Lewi~ohn and defendant afrI-flI ,a q e. e.ty and in thCir own names, hold and deal with the same. and their asso- ciatCs should receive SD much only of the profit realized in the enterprise as the defendant ard said Lewisohn might deem it proper ta distribute amOng them. and the remaining profit should be retained by the said Lewisohn and the defendant to their own use
 "The price the syndicate agreed to pay into the pnnl in stated sums was as follows:.- --f4 per oeRt-oa May 27. 4sss. | 1S per cent cn July 26. 1895; sS 2-3 per cent On Aug. 26. 1895 and 2S 2-8 Der cent on Sept 2f 1895. with interest at | . per cent; and said payments were made
 "On May 2S. 1895. the defendants and said Lewisohn exercised the Simpson | option by the payment of $1O0,CO0 and save notes for $614.2SO at per cent On June 10 the William Keyser stock was | purchased for $SS5,720 and a note given : Tor the stock. On June 20. 1895 the notes were paid and the property turn ] cd over to the defendant and Lewisoha i who continued the operation of the ! mines at a profit until conveyed to the 1 plaintiff corporation. Large sums of money were pail out by the defendant and Lewis0hn for necessary expenses ! Incurred in the transaC ton.
 The plaintin COrpCr5 ton was organ ! ..ed July 8. 1885, and the property con veyed and paid fer by it by the issue Of 100000 shares of it's stock
 | The 100000 shares of the capital stock of the plaintiff corpora tion issued
 by 1t to Phillip K. Dumaresq as the
 nominee of the Baltimore Old Dominion ! Cc., on or cbcut Sept. IS. 1895. in pay me1t for the conveyance Of the prop erty made to it by the Baltimore old Dominion O., as alleged by the plain tiH's bill, were transferred by saic Dumaresq to the defendant and sail
 Lewisohn, and subsequently the de fendant and said Lswisohn upon pay
 mCct to them O; the last installment
 under the syndicate agreement, distri-
 buted said shares among the member.
 of the syndicate in proportion to tn, respective interests of said members {. except in the case Cf a few members
 who elected to take the money value O.
 the shares at the fair market value O.
 s25.
 "The defendant ayers that in tn,
 tTGrsa ctions relative to the purchase O
 the shares of the Baltimore old Do
 minion Co, neither he TOT said Lewis
 ohm acted or was bound to act in be
 half of or for the benefit of the plaintiff
 corporation. but on the contrary the.
 acted and had the right to act solel.
 for themselves; that they acquired sai shares Of stock with their own money
 prior to the time when they contem
 plated or decided upon the formation of the plaintiff corporation, and unde
 such circumstances the plaintiff corpor ! atiOn is not entitled to claim the bene fit O; their purchase or their profit. The authorized capital of the plain tiff corporation was $3, 750, 900 divide 5 into 15O.OOO shares of $25 each. By tn
 terms of the contract of purchase 100. 0c0 shares were issued to the Baltimor Old Dominion Co. and 30.OO0 shares t y Lewisohn and his nominees. It wa
 determined to issue the remaining 20
 coo shares at par in order to provid
 working capital, but it was never con l t1mplsted that they should be offere - to or taken by the public. and no pro 9 spoCtUs was issued.
 Il "The defendant ayers that he an |. the said Lewisohn acted i1 good fait g and consulted the firm or Ev1ns, Re1 o1 man ( Chc1ta and that all action o were based upon the reoommendatio
 of said counsel. The defendant dC - nies that he secretly or otherwise rC 2 Ceived any profit in the transaction e which he was not legally entitled"