Show I I CEO 11 M SCOT GOS I Hearing On Petition to Dissolve the < I Attachments I ATTACHING CREDITORS CLACK THEEE WAS FRAUD I TH PREFERENCES The Kortgage of the Travelers Insurance surance Company For S40OOC surce 140OOO Made the Special Object of Attack Evidence Regarding It and Some of the Preferred Claims Agment Will Be Made Probably Prob-ably On MondayNext There was a great array of legal talent in Judge HUes court yesterday I engaged in the hearing on the petition of George M Scott and assignee Hugh Anderson for a dissolution of the attachments at-tachments levied on the stock of the George 2 Scott Co corporation In the hands of the assignee the The matter came up on order for attaching creditors to show cause why the attachments should not be dissolved and the property restored to the assignee as-signee The attaching creditors parties par-ties to the action are Wells Fargo Co 24633 National Bank of the Republic Re-public 12000 William L Hoge et a 5543 Geuder Paescke Manufacturing Manufactur-ing company 40S Wheeling Corrugating Corrugat-ing company 600 John L Rowntree 1012 and Ed O Howard 400 Messrs Marshall Royle Hempstead Hemp-stead Dey Street Young Moyle Booth Lee Gray representing the attaching creditors while George M Scott Co was represented by Dick son Ellis Ellis and the assignee by Judge Howat The attaching creditors claimed that there was fraud In making preferences in the assignment and their chief attack at-tack was made on the claim of the mae Travelers Insurance company for 40 000 secured by a mortgage on the real estate The creditors in the preferred list areas are-as follows a folows Mrs J B Standrod 2000 00 Mrs T D Pitt 2000 00 Hoge Daly Co 5000 00 I First National Bank of Park City 2500 00 O J Salisbury 1000 00 O J Salisbury 2000 0 California Powder Works 13046 S3 Colorado Fuel Iron company San Francisco 7S9 19 Mar Belting company Chicago Chi-cago 175 50 Cunnington company 297 92 Utah Plumbing Supply company com-pany 73 55 Continental Oil company 12 50 Sierra Nevada Lumber company com-pany r 549 95 29440 50 The travelers Insurance company for 40000 secured by a mortgage on the real estate was not in the class but is considered by virtue of the mortgage as a preferred creditor I CONTENTION OF FRAUD Mr Thomas Marshall in opening thecae the-cae for the attaching creditors said that in the past and before the assignment assign-ment members of the George 1 Scott Co corporation had diverted and misappropriated for other uses than those of George l Scott Co large amounts of the money and profits of the latter company thus tending to show actual fraud in the making of the assignment but it was objected to by the attorneys for George M Scott Co as immaterial and the court sustained the objection holding that under the statute of 1897 such a state of the I case would not invalidate the assignment assign-ment That the vice of the assignment if any must be proved to be in the assignment itself and that the former misuses of the money of the corporation corpora-tion i any existed were not competent compe-tent evidence and not embraced in one of the five grounds named in the statute which might be urged against the assignment to make it void SUPPORTING THE PETITION In support of the petition an affidavit made by George M Scott set out that the corporation in pursuance of a resolution res-olution passed by the board of directors direct-ors assigned to Hugh Anderson That the corporation did not at any time dispose dis-pose of or conceal its property or any part thereof with intent to defraud its creditors and has at no time assigned with that purpose and that the assign ment was made to Anderson without any fraud or fraudulent intent I is set out that the deed does not give a preference dependent upon any condition condi-tion or contingency or with any power 1 to revocation reserved that it does not tend to coerce any creditor to release or compromise his demand that it does not provide for the payment of any claim known by the assignor to be false or fraudulent or for the payment of any more upon any claim than If justly due that i does not reserve any interest In the assigned property or In any part thereol to the assignor or for its benefit before all its existing debts are paid that it does not confer upon the assignor any power which if exercised might prevent or delay the immediate conversion of the assigned I property to the purpose of the trust THE SHERIFFS REPLY fhe sheriff replying to the petition I of Hugh Anderson the assignee setout set-out the fact of the suits entered by the attaching creditors their allegations I that the assignment was made with intent to defraud the creditors and that it provides for the payment of claims against the corporation known Ky the assignor to be false and fraudulent fraud-ulent therefore the sheriff asks that the petition to dissolve the attachments I attach-ments be l dismissed I In the forenoon formal proof was j made of the incorporation of the company I com-pany and H S Rumfield secretary I of the company was examined in relation thereto lation I O J Salisbury was examiner as to his claim of 3000 which he said was j for money advanced and was in every way just and genuine I The notes representing the claims of the National bank of Park City and several of the other preferred creditors were indorsed by George M Scott individually I in-dividually and an effort was made to i construe these as the private obligations obliga-tions of Mr Scott but it seemed that i I the corporation had received the benefit bene-fit of the money advanced in each I I case THE 40000 LOAN County Recorder Jensen proved by the records that the mortgage in favor of the Travelers Insurance company given by George M Scott on Jan 23 I 1895 for 40000 money loaned WAS duly I recorded I James Glendinning testified that at I I the time of the execution of the mortgage mort-gage he was a director and also vice president of the corporation of George i t M Scott Si Cf and held the same positions posi-tions when 1 assignment was made tons He said the imount of 40000 In the j assignment put down as owing the Travelers Insurance company was the I same debt as represented by the note and mortgage I assignment was put In evidence by Judge Dey I The case of the attaching creditors was then rested and the other side opened in support of the validity of the assignment I The secretary of the corporation Rumfield was called and proved from I the books that the directors and stockholders J I stock-holders of the company negotiated the liir r I loan of 40000 from the Travelers Insurance In-surance company and approved it MR SCOTT TESTIFIES j George M Scott was called and testified tes-tified to the corporation receiving the I loan of 40000 from the Travelers Insurance In-surance company and applying the I same when received in 1895 to the payment of debts owing by the corporation cor-poration to Wells Fargo Co The I insurance company insisted that the property be assigned to George M I Scott or some other Individual and that that person assign It to the insurance j in-surance company on the mortgage be i i cause the company would not accept a I deed and mortgage from a corporation I That was why the note and mortgage was given by George M Scott but it was really for the corporation which received the entire amount of it Other testimony tending to establish the same state of facts was introduced and when 5 oclock arrived the evidence evi-dence was nearly all in Messrs Dickson and Howat of counsel I coun-sel for Scott and the assignee offered to submi it to the court without argument ar-gument but Mr Thomas Marshall and the other counsel for the attaching creditors wished to argue the case which will be done at an early date INSURANCE VOID I was stated by counsel that the fact of the sheriff having taken possession pos-session of the property annulled the insurance policies for 88000 taken out by the assignee the consequence being that the property was now uninsured which fact was urged as a reason for a speedy determination of the case Judge Hues has to resume the trial of a jury case on Monday but his honor offered to hold I night session of the court on Monday to conclude the Scott case and if the attorneys can arrange it among themselves the arguments will be made at that time I although it is doubtful if they can be concluded in one evening |