Audubon Republican. [volume] (Audubon, Iowa) 1894-1925, 1921-09-01
FARMERS SUE BIG COMPANY
Men from Shelby County Ask That
Council Bluffs Concern Be De-
clared bankrupt.

| charging tnat the corporation was
used as an instrument for the per-
petration OF frauds upon farmers,
having its principal place of bust
ness in Council Bluffs, and that II
acted in conjunction with other con-
Germs OF the kind, creditors last Sat
urday filed a petition in the United
States court at Council Bluffs ask
ing that the Farmers Mortgage Co.
be forced into bankruptcy. The pc
titioners are William, John and
Peter ]. Gaul, of Earring, Shelby
county.
The petitioners each of them, cite
that during the fall and winter of
1919-1920, the alleged bankruptcy,
which during the month Of May
went into the hands Of a receiver,
by and through its agents and CO.
conspirators, S. S. NcServey, Harry
Beeson and N. G. Cohn and other
persons whose names are unknown,
by fraud and false representation,
and as a part @ an unlawful son-
spiracy, procured the petitioners to
enter into certain contracts for the
| purchase of stock in the alleged
bankrupt concern.
| BY the terms of the petition, Will
liam Gaul said that he purchased
200 shares of stock at SIS per share,
an aggregate Of $4,000, and pursu-
ant to the said contracts made and
delivered to the alleged bankrupt,
gave notes in the sum OF $4,000,
some of which notes, he is informed
and believes at this time are in the
hands of persons who claim to be in
nocent purchasers thereof. John
Gaul cited that he had purchased
| forty shares of stock, an aggregate
Of $4,000, and Peter J. Gaul alleges
he purchased ESQ shares Of stock, an
aggregate of s17,750, all on the
same terms and conditions as the
first purchaser.
Fhe petitioners further cite that a
few days prior to the filing Of their
| petition, they learned that the state
ments and representations made to
them in procuring the said subscrip-
| tions were false and untrue, and
that on Aug. 26 they notified J. A.
! Speyer, receiver of the said corpora
ton, and an officer and agent of the
same that they repudiated their con-
tracts and demanded back all money
and notes paid pursuant to con-
tracts. The petitioners say that they
did not tender back the stock, hay-
ing never received it, and the repud-
iation was in writing.
The petitioners go on to allege
that the Farmers Mortgage COM
pany is insolvent and committed
acts OF bankruptcy They cite that
the concern paid certain claims, de-
mands, accounts and Indebtedness to
several persons, firms and corpora
tions, creditors of the alleged bank
rupt upon antecedent Indebtedness
with the intent and full purpose of
preferring such creditors, and for
the purpose of allowing the credit
ors to obtain a greater percentage of
their respective debt than other of
such creditors in the same class,
which payments amounted to the
aggregate of $4,000
The further charge that the cor
poration with the intent to hinder,
delay and defraud, with the intent
and for the purpose of giving a pref
erence contrary to the provisions Of
the bankrupt law, assigned, trans
ferred and set over to divers persons,
firms and corporations large and
valuable properties, consisting of
notes, mortgages, chattel mortgages.
certificates of deposit and other ev-
idence' OF Indebtedness, accounts and
bills receivable of the value of about
, $4,000, applicable to. the payment
OF debts of the alleged bankrupt.
The petitioners claim that on or
about May 26, 1921, the corporation
caused to be filed in the Pottawatta-
| mic county district court a, petition
in equity, praying for the appoint
ment of a receiver with view 70 the
dissolution Of the corporation; that
the petition was collusive, fraud
ulent petition, filed for the purpose
OF obtaining The appointment of a
receiver to prevent petitioners and
other persons defrauded from learn
ing OF their rights, OF the alleged
fraud, and to prevent them from
bringing actions to rescind their
contracts, and from obtaining back
their money and property.
1t was further held that the Farm
ers' Mortgage company was conceiv-
ed in fraud and from its very incep-
: tion was a stock-sellng scheme by
which the present officers and
agents conspired together to defraud
farmers and other persons by SELL
| ing them stock, upon the represent
alton that the corporation was or
ganized as a legitimate loan bus
! mess.
| nnEc narH INTO nIrSINEGS