Evening journal., 1905-05-19
MUST
PRODUCE Sl40,867
Referee Rules Against Him
in Suit Brought by
Brokers
HIS EVIDENCE WAS QUESTIONED

New York, May 1J-J. Edward Ad-
dicks has been held by Augustus c.
Brown, as referee for the Supreme
Court. to be liable in the sum of S14O,-
SCI, with interest from 1897, to the sur
vivors of the firm of Clark, Ward &
Co.. brokers, now in liquidation. The
survivors are James +. A. Clark, Re
ginald II. Ward and Frank A. Cchir-
mer.
The money represents a balance due
the brokerage firm as the result of a
stries Of transactions by Addicks in
stocks and bonds of the Bay State Gas
Company, of which he was president.
incidentally the referee finds that
when Clark, Ward & Co. get this
money they must return to Addicks
1895 shares Of the Bay State Gas Com
pany worth at yesterdays quotation
on the curb about $3.50, and $4,000 in
second mortgage and income bonds Of
the corporation. The report was filed
in the County Clerks office yesterday
and win be passed upon in a few days.
Clark, Ward & Co, began suit
against Addicks in 1901, to recover
s13O,372 on Addick's personal account
with them. and S1O,495 on another ac-
count known as j Edward Addicks,
trustee" He interposed an answer de-
Enying that he owed the firm anything
and setting up NAT there was 100000
due him because of damages he had
sustained through the firm retaining
to their own use a large amount Of
stocks and bonds Of the Bay State Gas
Company
The evidence taken by Referee Brown
lduring succession of hearings
stretching over two years shows in
July, 1892. after carrying a general ac-
count in Bay State stock for about six
months, Addicks gave Clark, Ward &
CO., a general authority to buy and sell
for his account in their discretion, with
a 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 restriction, that they were not tC
accumulate too much stock.
Counsel for Addicks asserted tina
lsuch a scheme to manufacture a mar
ket was contrary to public policy an'
that all transactions under it wer
void. Mr.. Brown finds that is was NJ
lagainst public policy, for it was clearl,
the intention. he says. of Addick L
sustain the market and jack up prices
! which would protect investors and no
= injure them.
Coming to the question of the allege
, wash sales" Mr.. Brown says tina
, there is hardly sufficient proof to justi
= fly such an allegation in the defense
e lbut. assuming that the proof is enoug
that does not exempt Addicks fror
1 liability. The referee says that tn
q discretionary power given by Addick
, to his broker, to keep up the price
land prevent raids on the stock, di
mot set forth the methods to be EN-
lployed by the brokers' in accomplish
ing this purpose, and if apparent sale
> and purchases would do as well as ac
:. tual ones, it is hard to see why, a
between the present parties. one meth
- Cd was not as legitimate as the othe
In one part of bis report Mr.. Brow
n practically accuses Addicks OF perjur!
r I'm answer to a question put to him o
p 1.-THE stand Addicks answered that h
n Ibid not know what was the cause
h the sudden rise in price of incom
l. bonds Of the Bay State Gas Compan
lin September. 1897. Reviewing II
levidence in this connection, the refere
comments:
t THAT was a statement, according
. all human experience, absolutely i'm
h possible to be true; . it would I
e too severe a strain on human credulit
- 70 believev that he did not know VIII,
AFFECTED the market for these bono
T. in September. 1897, and the ingeniol
l. lexplanation of one of his counsel
!. his brief does not satisfactorily a,
T. count for that plain answer to veI
/, lplain question"