New-York tribune., 1920-09-22

the petroleum company by virtue of
said mortgage or deed Of trust and
from taking any action toward effect
ing foreclosure under said mortgage.
Also the appointment Of a receiver is
asked to take possession pending
further litigation Of the property
rights, business, good will and inter-
ests in action Of the petroleum cor
poration.
Division of Stock
The company was capitalized on May
2, 1919, at S60,000,000, it's capital stock
being divided into 100000 shares at
leum Prope ties Corporation was in
corporated in the interest of its pro-
moters and that there were incorpo-
rated fourteen other petroleum corpo-
ratfons of Indiana, Texas, Oklahoma,
Louisiana, Kansas, Wyoming. Colorado,
New Mexico, Ohio, Mississippi, Arkan-
sas, California, Utah and Kentucky as
subsidiaries Of the defendant corpora
ton. All of them have been organ
lied and chartered under the laws of
the State Of Delaware.
These were organized at the same
time or soon after the incorporation Of
and soon constituted a network of pro-
motion.
According to the allegations of the
plaintiffs there was engaged in the oil
business in 1918 q corporation known
as the Black Diamond Oil Company.
This organization was incorporated in
the District Of Columbs and capital
lied at S25,oo0,0O0 and owned several
properties and some oil rights on lands
in Pittsburgh County, Oklahoma.
Some millions of dollars in stock
were sold to the public based upon
the representations of the value of
rived from one Jacob w. Mettler, of
Chicago, who was their former owner
and president of the Black Diamond
concern.
The plaintiffs allege that the Black
Diamond Corporation became dis
credited, and with the object of wreck
ing the company and appropriating to
themselves for their personal profits
its assets Mettler and his associates
entered into a conspiracy to bring
about foreclosure and sale of its
assets and to reacquire title thereof,
and thereupon to utilize the same in
organized by them.
New Company Organized
Then the complain proceeds, they
organized the Franklin Oil Company
under the laws of the District OF Co
lumbia. the officers being: Mettler.
president; Chapman E. Babcock, treas
u,er; E. F. Foley, trustee, and Dolphin
S.. Fletcher, trustee.
1t is further alleged that on the
pretense the Black Diamond Corpora
tion had issued 100000 of its mort
gage bonds upon which default had
been made, Fletcher, claiming to act as
trustee under q pretended deed of trust,
sold the assets of the Black Diamond
Oil Company. Mettler purchased them
for 100000, that amount being paid
by the surrender to Fletcher, as trus-
tee, of like amount of the Black Dia-
nond Oil Company's bonds at par, it
is charged. The plaintiffs allege that
deed of trust of the Black Diamond
Corporation has been found
After this the Plack Diamond Cor
poration filed petition in bankruptcy.
Paul f. Lesh, of Washington, the trus-
tee in bankruptcy, collected out of the
assets but S37. Lesh was later au-
thorized to begin proceedings for the
recovery of assets IN Illinois. There it
was adjudged in the United States
Court that Mettler and others, includ-
ing John A. Shillito and the Franklin
Oll company, nad conSplred in deFlS-
ing scheme to defraud, it is charged.
Mettlcr was held in $4,000 bail and
Shillito in $4,000, it is alleged, to await
the action Of the grand jury on this
charge.
Oil Disposal Enjoined
On May 10, 1919, Judge Landis, of the
United States Court, granted an in
junction restraining Mettler, the In
diana Pipe Line Company and John w.
Shillito from disposing of oil pro-
dlced by wells in Indiana claimed to
be the property of the Black Diamond
Oil Company. Mettler, the complaint
charges, after having acquired the
assets of the Black Diamond company,
transferred them to the Franklin Oil
Company and sold it's stock to the pub
lie, appropriating the proceeds for his
personal use.
Then it is alleged Mettler caused
the Petroleum Corporation of America,
its subsidiaries and the Petroleum
Properties Corporation to be ncor-
porated. A contract between the two
rctroleum corporations was executed.
This contract, the complaint alleges,
constituted convenient go between in
the purchase of oil leases and the
properties by the Petroleum Corpora
tlOn of America