Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-05-08
ESTATE SUIT ASKS
GRANITE FIRM QUIZ
Executives of Mrs. MeriIIat
File Action on Affairs Of
Southern Company.

Mrs Edna r. Moses and Miss Mar
T Earet j. Merillat as executives OF the
! estate of Mrs. Frances Merillat, 1877
Quincy street, and T. L. Cole, Colorado
Building. today filed in the District SUI
preme Court suit for an accounting, in
junction and receiver against the
Southern Consolidated Granite Corpo-
ration, James M Hause, his wife
Miriam; John NJ. Brewer. E. O. Frier-
son, Thomas M Arlington, T. Edwin
Bobbitt and George T. Ashton.
; This was the second development IN
this case in the past "a hours, COM
mittee having been appointed last night
at a meeting of bondhoiders in the
Office of Douglas, Obsar & Douglas, IN
the Southern Building. to study the
condition of the assets of the corpora
ton. which failed on May to meet in
terest payments on the bonds ana oCher
obligations.
Plaintiffs AlIcse Fraud.
Through Attorneys Charles H. Merillat
and William H. Holloway the plaintiffs
in the action today allege fraud in the
way of f1oatation of securities in the
Wake Granite Co. of Wake Forest, ". c.,
the predecessor of the Southern Con-
solidated Granite Corporation, and of
bonds of the Southern Consolidated
Granite Corporation. The properties on
which the securities were f1oated con-
sist of 102 acres of land at Lake For
est N. c., unimproved, and 269 acres
at Pacolet, S. c., on which is located
a quarry generally known as the Spar
tanburg Quarry. 1t is alleged that the
parties to the floatation of these Sc
curities were Brewer, president of the
Southern Consolidated Granite Corpora
ton; Arlington, its secretary-treasurer;
Bobbitt, a director, and FrierSon,
vice president and director. These Sc
curities were sold, it is alleged, through
Hause as a promoter.
The claim is made that with the pro-
ceeds of these securities Hause bought
various pieces of real estate in the Dis
trict of Columbia and took title to them
in his own name and the name of his
wife and gave only comparatively
small amount of what he realized from
the sale of the securities to the cor
poration whose bonds he was selling.
Seeks Realty Subsection.
The bill seeks to subject this real
estate to the obligations of the South
ern Consolidated Granite Corporation,
some of which are held by the plain
tiffs. It declared that HauSe, Brewer,
Arlington and Bobbitt first started to
sell securities in the Wake Grants Cor
poration and sold $28, 900 worth, of which
the plaintiff, Cole, bought $500 worth
on alleged representation that they
were secured by first mortgage on the
tract at Wake Forest. 1t then alleges
that the parties named, without paying
of all these notes, including Coles, Or
gained the Southern Consolidated
Granite Corporation and issued $3.50, 1000
of bonds on the Wake Forest property
and the Spartanburg Quarry, of which
100000 were represented to the Merrill
lat estate to be a first mortgage, it is
alleged, on the same property at Wake
Forest.
Representation was also made, the
bill alleges. that the bonds were secured
by properties worth many times their
face value and that the Spartanburg
Quarry alone each year had annual
earnings of several times the interest
charges on the bonds. 1t is also alleged
that these statements were untrue and
that the company defaulted last April
on interest after being in existence only
one year.
Ashton Sued As EmplOye.
Ashton Is sued as an employe of
Hause, who sold the bonds. on repre-
sensations said to have been made by
Hause, which Ashton is alleged to have
known not to be true.
The bondholderS' committee named
last night consists of r. E. Plymale.
Clarendon, Va; w. H. Oringe, 909
PENNSYLVANIA avenue and F. A. Bar
thickness. 3545 Eleventh street.
Formation of the protective commit
tee was suggested by Charles A. Doug
las, attorney for the Continental Trust
Co.; trustee under the bond issues, and
nominations for members of the COM
mittee were made by Wade Cooper,
president of the trust company.
The committee is TO make study of
the conditions of The company, its as
sets, possibilities of continuing opera
lions, or private sale of the real estate
holdings securing the bonds, and to re-