The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1902-10-29

! The hearing in the Sharood- Jordan
! suit, which was begun yesterday before
| Judge Kelly, promises to become the
most sensational case Of the year. The
| first round in the legal battle was won
| by the plaintiff, when the court refused
a dismissal Oh the pleadings, and de-
cided that it would go into the merits
| of the action:
The action is brought by Charles K.
! Sharood, as trustee, in the bankruptcy
| of Jasper B. .Tarbox and Charles H.
Schliek, individually and as partners
| in the firm of Tarbox, Schliek Co,
against w. B. and W. G. Jordan, the
W. B. & w. G. Jordan company, a cvr-
poration: Hiram r. Lyon, and the
Union Shoe and Leather company. It's
| object is to obtain an accounting of
! profits alleged to be due to Mr.. Tarbox
| as a secret member of the Jordans'
firm, and derived in part from an I'M
LIBERALIZATION of the assets of the bank
| rupt firm at the time the Jordans pur-
chased. ..@...@..
| When Tarbox, Schlielz & Co. failed,
| in 1900, John Lind, governor of the
state of Minnesota, was waging war on
| contract labor in the state institutions.
| Tarbex, Schliek & Co. had a. contract
with the state for the operation of the
| saltwater plant, and could not, be
ousted till it expired. Acting on the
! governors lead, however, the state
| board refused to consent to the as
signment Of the contract to the Jor-
! dams. Hence, it is asserted, they kept
a string on Mr.. Tarbox in order to use
his contract at the prison.
The days proceedings opened with
| motion by G. A. Severance, Of eoun-
sci for the Jordans, for judgment for
his clients on. the pleadings. The at
| tOrney declared that the complaint
| drawn by Barton & Samuelson, attor-
neys for the trustee, failed to show a
cause for action, and that while it de-
! scribed the alleged contract Of part
| nership as Illegal and a fraud on the
| creditors OF the bankrupts, it was at
the same time demanding the enforce
ment of the said illegal contract.
The motion of the defendants was
denied by Judge Kelly.
This action, said the court, to fel-
| low property legally belonging to the
plaintiff as trustee in the hands of the
defendants, Jordan or wherexer@it may
| be, and to obtain an accounting for the
| proceeds of that property if it has been
| converted. The courts are inclined to
favor all such proceedings when hon
estly brought in the interest of cred
| itors, and to look askance on motions
of the character of that made by
counsel which raise questions that
could have been brought up by .demur-
| rer."
Story OF the Deal.
CAS- soon as we found we could not
| meet our bills, in April said Mr. Tar
| box, 1 consulted. President Auerbach,
! of the Union bank, to which we owed
| $4,000, and of which w. B. Jordan
was a stakeholder. This was close to
May 1. Mr.. Auerbach brought in Mr..
| Jordan, whom l had known slightly be-
| fore, and who said he wanted to help
| me. He asked about the business, the
sales and Mr.. Schliek's interest, and
| he declared that if the assets could be
bought from the creditors at low
| figure, he would go in with me and
| give me a half interest. accepted his
| proposition, and we talked the matter
over at some length. Afterwards went
| down to the store with me, and at his
suggestion his brother, w. G.. Jordan,
! and L. M. Clark, brother Of Kenneth
! Clark, president Of the Merchants Ma
| tional bank, another of our creditors,
| made an invoice of our stock at the
store and at the Saltwater factory.
81 had nothing to do with this in
ventory except as related to the ma
| chinery in the factory. I was fully ac-
quainted with the value of the plant,
| because / had operated it from the
| time I started the factory, in 1894,
down to the date of our failure. Hence
! I put a value on the equipment at Still
| water"
What was the Saltwater plant
worth?" asked Attorney Barton.
Valued at Is Per Cent
sWe1, it cost at least $4,000, and it's
/ value in May, 1900, would depend on
the circumstances. Taken out and sold
! the machinery might not have fetched
more than $4,000, but for the opera
! ton of the factory there it was worth
| all we paid for it. 1t could not have
| been replaced for $4,000"
And what valuation did you put on
| this machinery"
Il fixed the value at $4,000 re-
| piled the witness, frankly. MY reason
| for valuing it so low was that | was
interested in buying the assets of our
firm from the creditors as cheaply as
| possible. 1 had been promised and eX-
| pected a partnership interest in the
| new concern.
| The witness then went back to his
first meeting with w. G. Jordan. The
| elder brother had told him that w. G.
| Jordan had $4,000 to invest in bust
| ness, that he had come to St. Paul tC
| look at a wholesale drug stock, but did
not care to buy it, if he could get
something better. 49,
81 said I should be glad to have the
young man come with me" the Eess
continued, land the two Jordal- an6
I held a number of conversations re-
! garding the partnership. The plan we
then discussed was for w. G. Jordan
alone to join me in the new firm. I tol6
him I was used to the outside work
meaning the factory, and hoped he
would take charge of the Office ane
financial business He said he could
do either. During our talks, it was
suggested that Foley Bros. would take
an interest in the new firm. The
FoIeys, however, wanted to organize {
large corporation, and offered to take
whatever stock we would let then
have But we-that is the Jordans anG
I-preferred copartnership.
Partnership Was Easier.
"My principal reason for opposing {
stock company was because IT We
formed a corporation I0would probably
| be elected it's president, and that would
attract very unfavorable attention
from our creditors. / accordingly gav'
the Jordans notice that l would sta!
by them. The invoice l have toll
about was made, and the Jordans of
fered $124,000 for the assets of tn
firm both at Saltwater and in the stor
al, st. Paul All this was before TIN
t first meeting Of the creditors, on Ma.
90"
Mr. Tarbox's account of the meet
ing of the creditors followed TIL
| witness had been present at the morn
ing meeting, which occurred at tn
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