The Mount Holly news. [volume] (Mount Holly, Burlington Co., N.J.) 1891-1942, 1916-04-11
The Onnmnhile Case

that looked very rosy on paper bl
i which proved to be anything else. Sue
long time has elapsed that the alta
was almost forgotten by all save thos
who had put some money into the alta
and refused to 60 down deeper into the
pockets when they discovered that til
affair had suspicious appearance.
The Ottomobile Company was organ
lied in 1911 by two men who came froT
Philadelphia and made great represen
atoms and promises. There was to
a large factory built on the outskirts {
the town which would give employmer
to lots Of people. Pictures Of this pre-
posed building were exhibited and it cel
tainly was q pretentious looking affail
A number of people subscribed for stoc
in the company, and after paying cel
tain percentage of their subscription de
clined to advance any more cash. Th
affair went into bankruptcy and a trus
tee was appointed who brought sui
against those who had not paid to com
pei them to pay the balance on thei
subscriptions.
| The case was taken up on Wednesda,
before Judge Carlow and jury. Tn
trustee was represented by J. Beck Ty
Ter and the defendants lawyers were V
Claude Palmer and Martin V. Bergen
Mr.. Tyler opened the case by stating
that the subscribers were responsible 10
the amounts to which they affixed thei
signatures and said he would ask yer
dict for the full sum.
On behalf of the defendants MIR. Pal
mer made q more elaborate opening
than that for the plaintiff. He said thai
in 1911 two men representing the Otto
Motor Car Sales Company, came tt
Mount Holly and started to organize
corporation which was to take over ali
the auto engines and materials in pos.
session of the Otto Gas Engine Com
pany, Of Philadelphia, held for the Otto
Motor Car Company and the new organ
ization was to be styled the Ottomobile
Company, with headquarters at Mount
Holly. The proposition of the two pro-
motors was that a factory was to be built
in Mount Holly. They were to put into
the concern 100000 of preferred stock
to be secured in Philadelphia and the
Mount Holly people were to raise the
same amount. The promoters told Cf
securing q tract of land, named some
subscribers they had got and on the
strength of these statements the people
on this end of the line went ahead and
put up money. For every two shares o.
preferred stock that was subscribed for, a
bonus of one share of common stock
was to be given. The defendants con-
tended that the promoters did not have
any common stock to give away and
did not have the right to promise any.
The subscribers felt that the whole affair
was fraudulent scheme and those who
had made partial payments refused to
paw the balance due, SO the trustee in
brought suit against Walter
Allen and Abram Saltzman. two of the
and the result in this case
was to decide claims of a similar nature
against other defendants. The amount
involved IN this instance is 5000, as the
two defendants had refused to pay any
Robert z. Ceilings, the trustee in
testified to the fact that the
comLany was insolvent and that he was
trying to get the amounts subscribed in
order to pay debts. During his examin-
alton there was a question which caused
the court to ask where the secretary is
now located. Mr.. Bergen said the de-
PENDANTS would like to have that infor-
nation and it was the belief that he had
skipped the jurisdiction of this. court.
This brought Mr.. Tyler to his feet with
q protest in behalf OF the miss
ing officer, who, it was claimed, had not
skipped, but had business elsewhere"
q statement that brought laughter from
nearly everybody in the courtroom who
had some knowledge of the business
methods of the man in question. The
stock books figured materially in the
of Mr.. Ceilings and he was
closely on the point of the
bonus promised. 1t was shown that not
a single certificate of any kind of stock
had ever been issued and the promoters
had been released from the right to col
lect anytLing'frCm them in consideTa
ton of their returning the certificates of
preferred stock.
At the conclusion of the testimony of
Mr.. Ceilings counsel for defense moved
for nonsuit. He offered several reasons.
He commended that the implied contract
Yves to secure subscriptions to the entire
preferred stock before payments were
asked. The contracts that were signed
the company as "a corpora
ton to be organized Counsel contend
ed that there was not any liability until
all the subscriptions had been secured.
reason for the motion was that
there had been modification of the
plans. Also that the contract was not
because the stock had never
been delivered. The corporation did not
have any common stock and that there
were not any subscriptions to that tall,
so that the nonsuit should be granted on
that part of the contract if not on any
other. On this point counsel argued
that those who subscribed for the pre-
ferred stock did not agree to pay for the
common stock. The contract was that
four shares Of the preferred stock was to
be paid for at 500 per share and two
shares of common stock were to be, given
as bonus. Now suit is brought to re-
cover the price OF the gifts. One more
for a nonsuit was that the cor
poration did not have any stock to de-
liver to the subscribers.
All of these points were strenuOusly
opposed by counsel for the plaintiff.
The arguments were based entirely on
points Of law. After hearing the law
yers Judge Carrow decided to proceed
with the cage and give decision later.
The plaintiff rested and the defence
called William d. Marren to the stand.
Mr.. Marren told OF the. meetings when
the proposition to form the corporation
was discussed by the citizens and the
A committee was appoint
to investigate the affair and Philadel-
phia was visited and the plant of the
Otto Company inspected. The machines
and material that it was said were to
come to Mount Holly were examined.
After the agreements had been signed it
was stated that the motor to be installed
was that Of the Otto Gas Engine Com
pany. The Ottomobile Company did
not take over the liabilities or assets of
the Otto Motor Company. In response
to an inquiry Why the promoters did not
hand over certificates of stock for the
promised bonus witness said the lawyer
of the promoters told them it woald be
illegal to do such thing and they re-
fused to deliver. Stock was never de-
livered to the subscribers and not a
machine was ever built in Mount Holly
Between S., 900 and So, 900 was paid for
by preferred stockholders but nothing
was ever given in the way of certificates
of stock.
This concluded the testimony and
counsel for defendants renewed. his
motion for a nonsuit and also asked that
the jury be instructed to return verdict
for defendants. Counsel for plaintiff
opposed these motions and asked that
the jury be instructed to find for the
plaintiff. This led to lengthy idiscus-
sion and the question finally settled
down to one Of law.
Judge Carlow said there were several
important and perplexing situations in
this case and he did not feel like giving a
decision offhand. He could not see tina
this was jury case. The whole matter
had resolved itself into law points that
could be decided only by the court
II the matter was left to go to jury the
latter would be instructed by the court
what verdict to return and the Judge
suggested that the decision be left tc