New-York tribune., 1903-07-29
CHARGES. CONVERSION.
Another Suit against United Bor
Board and Paper Company.
MILLIONS OF DOLLARS INVOLVED

Trenton. N. j., July rs (speciaD.-Papers were
served on and action was begun against the de-
fendant yesterday in the suit of John A. Shuts.
stockholder. against the United Box Board and
Paper Company and other defendants. This is
the second suit brought against the company
papers in the first action in New-York state
wherein the Oswego Falls Pulp and Paper Com
pany was the plaintiff, having been served sew
eraI weeks ago. The first suit was begun 10 set
aside conveyance of real estate alleged TO nave
been brought about by Misrepresentation,
whereas the present plaintiff seeks TO hold the
company, Richard Clowry. the Morton Trust
Company Henry B. Dean James A. Roberts and
other defendants Jointly and severally liable for
the alleged conversion OF S245OOOO alleged to
have been fraudulently withdrawn from the
company.
The Box Board and Paper Company ana the
other defendants have also been enjoined from
disposing Of nearly S2,OO0OO0 Of the company's s
bonds, besides certain stock alleged to have been
received by the defendants from the company
in exchange for notes signed by the company's
dummy board of directors.
The bill and affidavit in the present action
cover thirty-nine closely printed pages. The
plaintiff previous to July %. 1902, manufactured
box board and paper at Penn Yam, Yates Coun-
". New-York. and on that date exchanged his
property for shares in the box board trust. He
recites in his bill a long list Of allegations sim
liar in many respects TO those set forth in the
complaint in the first suit against the company
reported in The Tribune several weeks ago, but
lays stress on the allegation OF fraud in the
alleged diversion of the trusts capital into the
pockets of directors and promoters. he alleges
that the promoters. for the purpose of defraud-
ing him and other stockholders, secretly agreed
to effect contracts separate and distinct from the
general consolidating agreement; that thereafter
thew caused the dummy directors TO bind the
company to assume s., ,521 943 50 of these secret
contracts made by Dean & Shibley, 20 issue its
notes therefor, and TO away S3OS,OoO or the
company alleged funds to the promoters. The
bill further alleges that the defendants, in order
to cheat and defraud the plaintiff and other
stockholders, voted a bond issue of S3o00,OOO;
that such bonds were issued. secured by a deed
of trust to the Morton Trust Company of all its
real property; that the defendant company gave
81. 500 900 of these bonds to the promoters, in
addition to a bonus of - per cent in preferred
and - per cent in common stock. in exchange
that the value of the property covered by the
mortgage is many times greater than the
amount of the mortgage, and that the directors
in exchanging the mortgage bonds at 30 and
giving the stock bonus in exchange for the
notes. "fraudUlently and without authority gave
TO said stockholders said property without any
consideration whatever, to the extent of 10 per
cent Of said bonds and said bonus of 20 per cent
of preferred and 30 per cent OF common stock,
and thereby withdrew from the capital OF the
corporation without any consideration and gave
to said stockholders a portion of the assets OF
said corporation