The Birmingham age-herald., 1924-06-05
JOHNSON IS SUED FOR ILLEGAL USE
 OF STORE ASSETS
MisappropriatiOn of $3OO,- 900 Charged By
 Trustee

A. w. B. Johnson, formerly presi- dent of the SteeleSmith Dry Goods company is charged with illegal trans fer of $3O0,O00 of the companys funds to the Britling Cafeteria company, of which he is a large stockholder, in a petition for transfer of the Britling Cafeteria company's assets to the other company, which was filed in chancery court Wednesday.
 The petition was filed through John S. Coxe, trustee in bankruptcy of the Steele-Smith Dry Goods company, as complainant; and the Britling Cafeteria company, all its branches in several southern states, and the Birmingham Trust and Savings company are made joint respondents.
 It is alleged in the petition that Johnson was for several years presi- dent and chief executive official of the Steele-Smith Dry Goods company, which entered an involuntary petition in bank ruptcy last January, and that he was also for a short period treasurer of the 
 been operated in connection with the store, but proved unprofitable. It is said to have been changed to a cafe teria and to have become almost i'm mediately a profitable enterprise.
 Neglect Charged
 The petition charges that Johnson, while still drawing a large salary as president of the Steele Smith Dry Goods company, organized Britling Cafeteria No. in the same part of the city. It is alleged that this was organized in April. 1919, and that Johnson owned at that time and con- tinues to own 9S per cent of the capi- tai stock.
 Johnson is accused of wilfully neglecting the business of the Steele Smith company, although employed to devote all of his time to its interests, and to have attempted to destroy the business of the cafeteria operated in connection with it. To do this, ac- cording to the petition. he used the good name of the company, it's credit and it's property. and transferred $300,- GOO of its capital stock and fixtures to the newly organized Britling cafe teria on Twentieth street, destroying the books of the old company to avoid any record of the transfer.
 Johnson is alleged to have attempted to hypOtheeate large share of his stock in the Britling Cafeteria com pany to the Birmingham Trust and Savings company. The petition de- mands that he be made personally liable for the full amount of the funds alleged to have been diverted or that all dividends earned by the Britling Cafe teria company through it's branches in Birmingham and in other cities be de- clared the property of the bankrupt Steele Smith Dry Goods company, ex- cept that part earned on stock owned by bona fide stockholders, which the petition claims is negligible.
 Thirty days must elapse before hearing may be held on the petition, during which time answers may be filed to the allegations.
 Mir. JOhnsOn's Statement
 Mir. Johnson issued formal state ment Wednesday afternoon in which he denied the allegations contained in the petition filed earlier in the day, adding that there was no cause for action against him personally or against the Britling Cafeteria.
 "The entire bill of complaint is ut terly without foundation -or fact it stated. and any claim of misapprO- priation of assets of the Steele-Smith Dry Goods company is false in every particular"
 The statement added that he had faithfully served that company for b years as president and general manager and that the companys books would show that every transaction was prop CT. It stated that. instead of diverting the firms funds to the new business, he had subscribed and paid for in cash new stock valued at $5O,000 in his ef forts to build up the company and i'm prove its financial condition.
 Previous to my leaving the Steele Smith company" the state continued, "the books were audited by the Uhr- quardt Audit company and the ac- counts between myself and the Brit ling company and the store were settled on the basis of the auditors figures, which were subjected to the careful scrutiny of other directors and stock holders of the Steele-Smith company.
 MT. Johnson also denied that any of the stock in the Britling Cafeteria com pany was owned by his wife, as alleged in the petition.