The Hood River glacier. (Hood River, Or.) 1889-1933, 1916-10-12
FRAUD ALLEGED
in COMPLAINT
JUDGE STANTON Is A DEFENDANT
Judge Derby Proceeds Against Associated
Fruit Growers to Protect Mi
nority Stockholders

hOflty OtOCknOiuefS
Operating under the provisions of the
Blue Sky law on behalf of minority
stockholders District Attorney Derby
Saturday afternoon filed a complaint
in the circuit court asking that re-
ceiver be appointed for the Associated
Fruit Growers. corporation, accord
ing to the allegations. fraudulently
formed in the fall of 1914 by County
Judge Stanton and r. F. Marquis for
the alleged purpose of defrauding in
nocent purchasers of stock.
Judge Stanton and wife, Laura E.
Stanton, and MIR. Marquis and wife.
Kate F. Marquis, as directors of the
company, and Ralph j. Jarvis, are in
cluded as defendants. A decree of
foreclosure of purchase price mort
gage for SIS, 500 against a 10 acre tract
was granted Mr.. Jarvis last week by
Judge Bradshaw holding session of
circuit court here. The complaint asks
that Mr.. Jarvis. who now has posses
sion of the property and who is adver-
tising for its sale, be required 10 give
an accounting Of the 1916 apple crop.
1t is further alleged that he has come
into possession of farming tools and
implements which were not included i'll
the mortgage held by him.
According to the recitals of the COM
plant the defendants. Judge Stanton
and Mr.. Marquis and their wives, con-
ceived the idea of forming the corpora
tion on October 80, 1914. The capital
stock was placed at $4,000; 1000
shares of $40 each Mr.. Marquis, as
secretary, opened books for subscription
of stock, and shares we're subscribed as
follows: Judge Stanton and Mr.. Mar
quis total of 4,640; Mrs. Stanton, one
share and Mrs. Marquis one share. The
four then elected themselves directors.
choosing officers as follows: Judge
Stanton, pres. Mrs. Stanton, vice pres. !:
Mr.. Marquis, sec. treas.
During the month of November, 1914,
according to the allegations, Judge
Stanton and Mr.. Marquis caused to be
conveyed to the corporation three par
cells Of land ownd by them and their
wives, receiving in payment the fully
paid up 4.640 shares Of capital stock.
In addition to the tract. against which
the Jarvis mortgage was outstanding,
Judge and Mrs. Stanton transferred a
second 10 acres, against which G. A.
Merriam and wife, of Eugene, held
a mortgage for S., 100. The holders of
this mortgage have already field fore
closure proceedings. Mr.. and Mrs.
Marquis transferred a 80 acre tract,
against which a mortgage for $. 900 in
favor of the American Scandinavia
Bank, of Astoria, was outstanding. An
anticipation of foreclosure proceedings
in the case OF the last mortgage is ex-
pressed in the complaint.
According to the complaint the total
value of the real estate transferred by
the incorporators and officers Of the
Associated Fruit Growers did not ex-
ceed $50, 900 at the time of the trans
fer.
The complaint further alleges that
the ownership Of single share of stock
each by Mrs. Stanton and Mrs. Marquis
was colorado only for the furtherance
of the fraudulent enterprise. and the
court is asked to decree the husbands
in fact as owners of the two shares of
stock.
The court is asked to eDjoin Judge
Stanton and Mr.. Marquis from fur
ther disposal of or placing of incum-
brances on the stock unsold. For the
protection of the minority stockholders,
to whom, according TO an exhibit at
tached to the complaint, 1,047 shares
have been sold, the court is asked to
require that Defendants Stanton and
Marquis be required to pay to the cor
poration thesdifference between the ac-
| ttual cash value of the real estate, less
incumberances, and par value of the
stock. II it is found that this cannot
be done or does not seem equitable to
the court, it is asked that all unsold
stock be cancelled and returned to the
court and that judgment be entered
against Judge Stanton and MIR. Marquis
for the difference between the actual
value of the land less membranes
and the par value of stock disposed of.
| 1t is stated in the complaint that Mr..
Marquis has removed from the jurisdic-
tion Of the court and that despite the
fact that he has been notified of the
financial embarrassment of the corpor-
alton he pays no heed to such commun-
ications. Mr.. Marquis residence at
the present time is said to be Bismark.
N. D.
1t ia stated in the complaint that the
corporation has no funds or credit with
which to purchase supplies for the har.
vest of apples and that receiver be
empowered to take charge of these
matters for the interest of minority
stockholders.
Circuit Judge Bradshaw here from
The Dalles Monday especially to hear
the case, appointed E. N. Benson. u
West Side orchardist, receiver for ths
Associated Fruit Growers. Geo. r,
Wilbur, attorney for r.Jarvis, agreed
to this prayer and stated to the court
that the crop would be severed from
the land and kept segregated.
County Judge Stanton was present
He denied the allegation Of the com.
plant to the effect that the Associated
Fruit Growers would not have been
able to harvest their crop.
1--WE would have been able to have
financed the harvest of the crop had il
not been for recent newspaper reports
telling of the probability of appoint
ment of receiver" be declared.