New-York tribune., 1922-12-12
IosepthaI & Co.
sReceivership
Plea Is Argued
,;.e Cavegan Reserves
Osri.iOn in Proceedings
Thought by II. J. schnii-
,er Against Change Firm
Charge Improper Ousiins
n.r,udants Declare Former
D'I Partner Abused Asso-
GATES Confidence in Deal

frsii.e GaNtN~"
"H., s.,i,ion yesterday on mo-
I'''',. y. H,pry J. sehnitzer' banker
W. ~ a, appointment Of a receiver Es.i,', ioT
i'I "a. s,..s s's Exchange firm Of Josephthal
iae S !, an accounting proceeding
: go, =. 5, NJ. sshni'aer' former
sToos.. =, ne srm. Nr. sehnitzef al
men, s'1', ,s,.sss I, n,s D, s'sasF' that he
l'E'a' vs., '.,I' ,,sm the arm q JosePhthal
vas ouss.sa -, sroper reason. and that
4 CO. V'.no'sS sSissoiyed and reorganized
tne MA ~ " isrsl fornality' he sara
without shy '..,s,kle 70 get back any
be hto ~ 1900 he put into the
part oi w,,tsi & Co. however. as
frn. yossP're ,res the firm Sl93.366.
ser t'll Ii..tee Clarence j. Shearn,
io1,f =, Jouephthal & Co., argued
c's'', elIeots were within their
~ Sissolving the partnership.
1kas gen consisted Of Louis NJ.
.t,isi and Henry j. Schnitzer. be-
.,~,s n -he alleged discovery By mr..
f.-.,ask,i that Mr. Schnitzer had
ste,s5 lis confidence The transec-
-. complained Of, Mr.. Shoarn said,
,s,ly consisted Of an act Of larceny.
Psnnership Formed in 1919
Tts partnership agreement between
v, Jossphthal and Mr. Schnitzer, un-
{,r uk'ci the senior member con-
trjsi,d So 100000 20 the capital, was
80 in December. 1919; was for three
v,,n and took the place Of another
sv-,,acnt made in 1915, uude' which
M losephthal put in 81 100000 and Mr.
s.srtser S3O0.OO0 Several junior
,,rrsrships were created said Mr.
a,ssr, who added that on February
n 1922. Mr.. Josephthal and two Of
isus so-called junior partners took
49, 100000 in assets OF the firm
4 GRANTING a new firm and inform
4. Nr schnitzer that he was Ousted.
n. attorney insisted that the plaintiff
t,,Iy Il still a member Of the hrm.
j'risration for the ousting Of Mr..
s.l,ifzer. said Mr. Steuer. was sought
/. .ransactiOn over some shares OF
=, Hercules Paper Corporation IN
,sis Wien Mr.. Josephthal paid one
Wsi..v $4,000 for $1,000 shares on the
,,,-,.snsstion Of Mr. Sehnitzer that
4, vas buying 10000 shares for
$500
Alleges Misrepresentation
u, Josephthal charges that bis former
..,,,,, moi only did not buy the Her
nj. s.osk. but that he divided, fifty
fl,g with Walscy the $4,000 paid by
M lossphihal. On this alleged mis-
,,,.s,eristion. said Mr.. Steuer. the
Ss,r5,ns decided they need not con-
I'm, M partnership. Also, Mr..
s,t,aisi vas informed that his capital
IN he firm had been wiped out and
,hst. IN iatl, be was indebted to Jo-
tsph.bL& Co-the latter assuming that
tisy were Farranted by law 20 dis
foln nd Do as they pleased with the
tsset
soV. after a silence Of three years,
ad Ar Stsuer, Mr. Walsey has made
an a6dlYt about the alleged under
standing between him and Mr.. Sehnit-
ftr over the Hercules stock transac-
tior. Another affidavit, said Mr..
Sis5Ef, is made BY one Holman, a
lawyer, which says that Mr.. Schnitzer
askst for secrecy, saying that II the
facts became known IL would mean his
ruin. Il was also suggested, said Mr..
SsBG, that Mr.. Holman should go 10
W. lcsephthal TO say that II the firm
vas tMoyed all matters could be sub
nitisi to arbitration and the facts
void never be revealed. An agree
rsri for the dissolution was signed
HAf losephthal, said counsel, but Mr..
Nsnii7er refused to sign it and
brought the present action, which
snrgs al the facts 20 light.
Nr Steuer contended that the alleged
lrtery was an irrelevant issue and
vas 90 excuse for the taking Of the
fms assets By the defendants. The
llteuy theory was created for at
nosphe-e, continued Mr. Steuer, and
ITtaled how bitter was the antagonism
between Mr Josepthal and Mr..
Sshniler. Mr. Steuer said Mr..
Sshaiizsr's assets in the firm amount
10 a. least $500 ,00O
Ask for Referee
W. Shearn suggested that the court
appoint referee 10 hear the case and
oeeiae whether the plaintiffs rights
were Invaded. On this point 100, tho
justice reserved decision. Mr.. Steuer
opposing that move on the ground that
would require too much time TO de
tefmine whether his client was entitled
70 iehei. W. Shearn said JOsepthal e.
w. would Be ready 10 file a bond for
,sny amount IN ease the matter was de-
ssyed oy referees appointment. Mr..
oaesIn SAID that the appointment Of a
eeeiver would work q great injury to
Aoiock Exchange firm in good standing
that the mere announcement OF
,.sn move would mean "utter ruin"
lhe attorney for the defendants
MIheo the business careers Of the
s,1oers Of Josepthal & Co. Justice
's,n Interrupted 10 say, - assume
az the men are Of the best Of
Assets Are Customers
searn repeated the charge about
oged uniaithfulness Of Mr..
s,sias a partner Of the firm, say
aHhe plaintiff was expelled from
49, ior an act OF fraud. which was
s.neagh reason for terminating
,sh.p. As 10 the $1,000 600 as
a.. sileh Mr.. Stuer said the defend
b. ,a taken over, Mr. Shearn, said
1ese aliegf assets were the
AAN, |RE THROAT