Delaware gazette and state journal. (Wilmington, Del.) 1883-1902, 1902-03-06

ana bnat une Qetendant would assume
its contracts, &c. The bill further
alleges the belief that the incorporators
Of tho Mutual Fidelity Co. of Mary
land and the Mutual Fidelity Co. of
Delaware are identical, and the de
fondant company is tho offspring of the
Maryland company. The bill alleges
that tho contracts of the petitioners
arc all due and payable, 'tyet, although
they had made demand upon one G. =.
Storrs, the general manager of the de-
fcndant company, who was the only
officer of the company whom they
had been able to discover within this
district, the defendant company through
their general manager, said Storrs,
has refused to pay anything" &c.
And your orators further show
the bill continues, "that after they
had entered into these contracts in
good faith, without any knowledge of
The illegality of the enterprise in which
the defendant corporation was engaged
the corporate business was declared
by the Postal authorities of the United
States government to be in violation of
both the fraud and lottery statutes of
the United States, and the use of the
mail for corporate business was denied
to the defendant and to its officers and
agents. and no letters nor mail matter
OF any kind or character would he de
lyerad to the defendant by the Postal
establishment of the government.
I" And your orators further show, upon
information and belief, that the de
PENDANT corporation has never had or
engaged in any other corporate bust
ness except the issuing of the diamond
investment contracts and the eight per
cent investment certificates. Your
orators further show that your orators
were persuaded and induced by the
agents and representatives, of the com
pany to enter into these contracts of
the company and make payments upon
the same by certain decoy payments
made to several prominent citizens of
Memphis and other places =
That among those to whom such pay
ment was made by the said company
was q certain Mr.. &. X. Lewis,
prominent citizen of Memphis, in the
State of Tennessee. That the said
Lewis, after making payment on tho
contract purchased by him, similar to
the contracts now opened and held by
many of your orators, was paid the full
amount called for by said contract
after he had paid his IA monthly in
stalments thereon.
Your orators further show, upon
information and belief that the theory
and scheme of the DEFENDANTS bust
ness, is a fraud and was designed and
intended by its agents and promoters
AS fraud &c.
II. IL. Ward, representing the com
plainants, filed a motion for pre-
liminary Injunction, restraining order
and appointment of receiver In
addition to the order of Chief Justice
Fuller, quoted at the beginning, the
court has made an order on the motions
for a receiver and an injunction, fixing
Thursday, April 3D., at II q. m, for
hearings on both motions, and ordered
that the compliments file on or before
March 18th all alidavits in support of
the motions, and the defendants file all
atiidavits in opposition before March
10th, and before March 9th the com
plainants must file all affidavits on any
new matter brought out by the ALI
davits of the defendant.
In discussing the company's method
of doing business, a local attorney said:
THE theory is this: On each contract
you pay So u month. After the fifth
month, it begins to pay You dividends
at 81; seventh month, ST. so, and in
creases 80 cents u month until at the
l4th month, the amount paid in and
the amount Of the dividend are equal,
Then the contract is said to have ma
tured and then you can withdraw your
share of the reserve fund OF continue
to pay for 40 months, at the end Of
which time you are entitled to receive
what you paid in with interest at the
rate of s per cent per annum and all
surplus earnings, Each So is thus di-
vided: go per cent to the surplus: 10
per cent to the reserve fund, 20 per
cent, Il special fund for the,use of the
company in extending its business and
10 per cent to the expense fund. They
calculate to pay back in dividends the
amount which was credited to the sur
plus, 60 per cent, and the remaining
20 per cent, reserve, is what they pay
to you at the 14th month il You with
draw then. They do not pretend to in
vest the money or use it in any way to
increase it,
"Their business was chiefly in the
South, in Georgia, Alabama, Tennessee,
Kentucky and Virginia"
A receiver was secured for the com
pany in Norfolk some time ago. Con
tract holders have been pouring their
claims into local lawyers The govern
ment has closed tho mails to the COM
pany,