The sun. [volume] (New York [N.Y.]) 1833-1916, 1905-05-19
THE AEOLIAN COMPANY, AeOlfan Hail. ~ 1Ts 4Ay!Tr
ADDICKS MUST PAY $140,S67.
REFEREE RULES AGAINST HIN
IN BROKERS' SUIT.
Cpholds Transactions Alleged to he Illegal
on the Ground That They We're Lawful
as Between the PARTIES Addicks's
Testimony Declar cd lntrue by Referee

| SpHuIuS ITuHbaCtlOHs AlleBeO 10 lie mega
on the Ground That They We're Lawful
| as Between the Parties-AddIcks's
Testimony Declar cd Untrue by Referee
| j. Edward Addicks has been held by
Augustus c. Brown, as referee for the
Supreme Court, to be liable in the sum OF
$l4o,se7, with interest from 1897, to the
survivors of the firm of Clark, Ward 4 Co.,
brokers, now in liquidation. The survivors
are James F. A. Clark. Reginald H. Ward
and Frank A. Schirmer
The money representa- halarcc due tic
brokerage firm az the result of a serie s Of
transactions by Addicks in stocks ard bonds
Of the Bay State Gas Company, Of which he
was president. Incidentally the referee
finds that when Clark. Ward & Go. get this,
money they must return to Addck, 1855
shares Of the Bay State Gas Company,
worth at yesterdays quotation On tie cub
about $3.50, and s33 200 in second mort ge
and income bonds of the corporation. The
report was fled in the County Clerks office
yesterday and will te pissed upon in few
days.
Clark, Ward h Co. began suit against
Addicks in 1901. to recover sl3O,372 on Adj
dicks's personal account with them and
$l04o6 on another account known as u.
Edward Addicks, trustee" He interposed
an answer denying that he owed the firm
anything. and setting up that there was
$500 900 due him because Of damages he had
sustained through the firm retaining to their
own use large amount Of stocks and bonds
Of the Bay State Gas Company.
The evidence taken by Referee Brown
during succession Of hearings stretching
over two years shows that in July, 1892,
after carrying a general account in Bay
State stock for about six months, Addcks
gave Clark. Ward 4 Co. general authority
to buy and sell for his account in their dis
erection, with view OF keeping the market
active for this particular stock. and making
quotations for it on the Boston and New
York Stock Exchanges, with only the re-
striction that they we're not to accumulate
too much stock.
Counsel for Addicks asserted that such q
scheme to manufacture market was con-
trary to public policy and that all trans
actions under it were void. Mr.. Brown
for it was clearly the intention. he saws, Of
Addicks to sustain the market and jack
up prices, which would protect investors
and not injure them.
Coming to the question OF the alleged
WASH sdier, NIT. Drown says tnat there Is
hardly sufficient proof to justify such an
allegation in the defense, but, assuming
that the proof is enough. that does not
exempt Addicks from liability The ref
cree says that the discretionary power given
by Addicks to his brokers, to keep up the
prices and prevent raids on the stock, did
not set forth the methods to be employed
by the brokers in accomplishing this pur-
pose, and II apparent sales and purchases
would do az we'll as actual ones, it is hard to
see why. as between the present parties, one
method was not as legitimate as the other !
In one part Of his report MIR. Brown
practically accuses Addicks of perjury. |
In answer to question put to him on the ,
stand Addicks answered that he did not
know what was the cause of the sudden rise |
in price OF income bonds of the Bay State
Gas Company in September, 1897. Review
ing the evidence in this connection the !
referee comments.
THAT was a statement, according to all |
human experience, absolutely impossible ,
TO be true; it would be too severe |
a strain on human credulity to believe that I
he did not know what affected the market
for these bonds in September, 1897, and the .
ingenious explanation Of one of his counsel |
In his brief does not satisfactorily account
Tor that plain answer to very plain ques-
fior, 49,