Daily capital journal. (Salem, Oregon) 1903-1919, 1911-09-26

nothing in this paragraph upon
which the court could have properly
admitted any evidence.
The 2lst paragraph charges, upon
information and belief, that the dl-
rectors Of the Union Savings & Loan
Association have sold and trans
ferred to the Cooperative Invest
ment Company and to preferred
stockholders nearly all the other
properties Of the Savings & Loan AS
ISOLATION, at grossly Inadequate
prices, the properties being situate
in Oregon, Idaho and Washington; /;
and that plaintiffs are unable to state
the value of the properties, and that
the same were decided by the officers
and directors Of the Savings & Loan
Association without first holding a
meeting Of the board of directors or
passing a resolution authorizing its
oincers TO execute the deeds re-
quired by law.
rs a general rule II is not suffi-
Client to charge a fraud upon infor-
nation and belief without giving the
ground upon which the belief rests
or stating some fact from which the
court can infer that the belief is well
founded. Further, our code REQUIRES
a plain statement Of the facts con-
shutting the cause of suit and these
tacts should be stated positively. The
Verlncation Is to the effect that the
plaintiff verify believes the com
plant to be true. When a party AL
leges in his complaint that he he
ileyes certain fact to be true, and
IN his yerificatlOn swears that he be-
lieyes his complaint to be true. the
eiiect of the whole is that he has
sworn that he believes that he he
lieyes that the allegation Is the truth
which Is an absurdity. A charge for
perjury could not be predicated unon
yerlhcation and belief cannot he sus-
tanned unless the facts upon which
lle DeHet Is founded are stated in the
pleading" 10 Ency. Pl. & Pr. S55,
and cases there cited This is mere
hshing allegation and should be dis
regarded. '''
Inc 22nd paragraph relates to the
transaction with Sheffield, mentioned
IN our original opinion. II aIIages
that the mortgage was for 1000 bnt
does not charge that It was aotualIv
worth anything or that the stock ex-
changed by Sheffield was worth less
tnan the mortgage or that he knew
OF any infirmlty in the transaction or
that anybody was financially injured
by 1t. It is wholly insufficient IN
constitute a cause of suit against
Sheffield. '"''
The 2Srd paragraph charges that
the officers and directors of the Saw
lngs e. Loan Association have for
more than two years prior to the
commencement Of this suit been nav
ing dividends to certain of its nre-
ferred stockholders when in truth
the association was hopelessly insoI-
vent 1t appears from the complaint
that the association was a going con-
cern and 1t is not charged that tbe
olncers knew 1t to be insolvent or
thal their payments were unlawful
or such as they could avoid making.
There Is no limitation prescribed nv
law on the different classes of stock
that the association may Issue and
there Is nothing in the complaint IN
indicate that the stockholders mem
TONED were not lawfully preferred.
sec 6747 l.. o. H., after providing
that nothing in that section shall
prohibit the issue Of different classes
OF stock, gives express authority for
the Issuance of Reserve Fund stock
and provides that 1t shall not be sub-
Ject to withdrawal until all claims of
other shareholders and of all credi-
tors shall have been fully paid and
llqudated.
The effect of this Is to prefer every
other class Of stock to the reserve
iund stock, and there is nothing in
ne complaint to indicate that the
stock held by plaintiffs was not of
he latter character.
Paragraph "a alleges: "That the
said officers and directors of the said
defendant, the Union Savings & Loan
Association, have persuaded large
number of the stockholders thereof
10 relinquish their stock In said asso-
citation and in lieu thereof accent
''V'N IN Sblu NO-OpefAuNe Invest
ment Company, and when said stock
IN said Union Savings & Loan Asso-
citation was so surrendered. II was
re-issued in the name of the defen-
tant, h. A. Baldwin. for the purpose
)f owning controlling interest IN
said Union Savings & Loan AssocIa-
lion, and the said h. A. Baldwin did
procure In his name sufficient of said
stock to control a majority of the
votes of the said stock of said Union
Savings & Loan Association"
There Is nothing to Indicate that
the officers named used any undue or
fraudulent means to induce stock |
holders to exchange stock in the Saw
Ings 4 Loan Association for stock in
The Cooperative Company, or that
The reissue to Baldwin was made in
any irregular or fraudulent manner
Or without consideration He had
right to procure as many shares as
he could pay for and to own a con-
trolling interest II he could get It.
So far, no substantial cause OF suit
IS shown and, II the complaint con
cluded here, the court might well
have dismissed the proceeding. But
The remaining allegations show that
after McArdle had obtained control
~ a majority nf tho gtnoL 90 th. c..