St. Johnsbury Caledonian. [volume] (St. Johnsbury, Vt.) 1867-1919, 1916-03-29
FRAUD ALLEGED
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4B&1OV 4A&444UAV
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ander paid no money to the company.
In the examination of Mr.. Somers
the fact was brought out that the
American News Vending Machine COM
pany of St. Johnsbury credited on their
books as cash-payments by Alexander
which were made by turning back to
them these commissions on the sale
of the State rights to himself and Mr..
Arnold, but this was later explained
by saying that every such credited
payment was balanced by another en-
try showing the sum received as paid
out to Mr.. Alexander. The witness
testified that Charles M. Weeks was
the only one of the defendants who
did not know and approve of the ac-
tions of himself and Alexander with
regard to this sale. Mr.. Somers also
testified that the company paid one
dividend of seven per cent on Jan. 1,
1912, and that this came from the
profits on job work done at the COM
pany's factory at St. Johnsbury. He
did now know how many machines
had been manufactured or installed
during his term as president of the
company amounted to.
Franklin NJ. Abbott of st. Johnsbury
who has been connected with the
company since it's incorporation in
1908, and has served as director, sec
rotary and treasurer, was the next
witness. His testimony may be sum-
med up n the statement he made in
cross examination that he had been
a workman for the company and al
though a director and officer knew
practically nothing of it's management,
but when called from his work bench
signed such papers as he was ordered.
AIexander's Story.
Joseph E. Alexander of ST. Johns
bury, the salesman of the American
News Vending Machine Co., who nego-
tiated the deal whereby the company
sold to himself and the plaintiff, q. 3.
Arnold. the patent rights to the state
of New York and special equipment to
build their machines for $4,000,
caused a ripple of excitement in the
court room when he took the witness
stand. The principal facts brought
out in the testimony were that he did
not tell Arnold before the latter signed
the contract between himself and
Alexander and the company for the
purchase of the New York state rights,
that he, Alexander, would pay his
share, by turning back to the com
pany his so per cent commission on
the sale, and that he was acting for
the company and not for himself and
Arnold when he arranged the nego-
tiatiOns for the sale of the New York
state rights. Later in his testimony,
however, the witness admitted th9t
Arnold was among the clients he had
in mind when he tried to arrange the
sale of the New York state rights for
a lower price than $4,000, 1.-THE mini
mum price at which they were listed,
and that Arnold did not know that he
was paying for his share of the pur-
chase in commissions until just before
the final payment of $4,000 was due
on the contract. A letter from Alex
ander to Arnold, apparently written
about this time, was introduced in
which the former urged Mr. Arnold TO
complete the final payment and avoid
trouble. The witness admitted that
this was in answer to the plaintiffs
protest when he found out that Alex
ander was putting no money into the
scheme.
The witness also testified that he
was the manager and sales agent of
the American News Vending company
just previous to it's ceasing business
about two years ago and that during
this time he refused a ST. Johnsbury
attorney who was acting in Arnold's
behalf access to the books of the COM
pany, although Arnold was a stock
holder in the company. He also tes-
titled as to the advantages of the COM
pany's machines and the places where
thew were installed
The PLAINTIFFS Testimony.
Gardner B. Arnold Of Burlington,
the plaintiff, was the last witness. He
testified to first meeting Alexander in
the City hotel in Barre on Sept. IL.
1912. while the latter was selling stock
and state rights for the American
News Vending company of st. Johns
bury. Alexander, he said, represented
to him that the company was in a
fiourishing condition and had had four
hundred machines installed at various
places for six months, each machine
disposing of S14 packages of goods
daily, at a large profit He then
preached the subject of getting part
ner or partners for the purchase of
the patent rights to New York state
and told of the ease and small expense
with which such a business could be
established.
The plaintiff then testified that at
the time of signing the contract and
making his initial payment of $1,000,
after, he insisted. the terms and pre-
liminary arrangements had been made
by Alexander. that Alexander said he
would step out into the next room and
make out his check for his share of
the same payment, and that on the
A. A
making his second payment, the lat
ter said, II can see my check with
yours agoing up to the bank"
Mr.. Arnold further testified that he
knew nothing about machines and re-
lied on Alexander for information con-
corning the practicability of the ma
chine manufactured by the American
News Vending Machine company. At
ter the Eureka factory was established
he said he found the machines to be
practically worthless because the prin-
ciple of their manufacture was de-