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Home My WebLink AboutAssignees, Receivers, and Trustees 1912 STATE OF NORTH CAROLINA DEPARTMENT OF CULTURAL RESOURCES Microfilmed by DIVISION OF ARCHIVES AND RECORDS Raleigh, North Carolina DEPARTMENT OF | CULTURAL RESOURCES DIVISION OF ARCHIVES AND RECORDS CERTIFICATE OF AUTHENTICITY This is to certify that the micrographics appearing on this film are true and accurate reproductions of records originated during the normal course of business by the Iredell County and consist of Assigne es’, Receivers ’_ and Trustees’ Records 1843 - 1941 The records begin with _C. 2,054. 9a9.0¢ #order 17> Receev os Liz and end with It is further certified that the above records were microfilmed in conformity with the provisions of the General Statutes of North Carolina, chapter 8-45.1 and 8-45.4, “Uniform Photographic Copies of Business and Public Records as Evidence Act"; that the microphotography processes accurately reproduce the records so microfilmed; that the film forms a durable medium for reproducing the original, if necessary; and that the film used conforms to American National Standards Institute, Photographic Films-Specifications for Safety Film, ANSI IT9.6-1996 and American National Standards Institute, Imaging Media (Film)-Silver Gelatin Type-Specifications for Stability, ANSI / NAPM IT9.1-1996. This is further to certify that the microphotography processes were accomplished by the undersigned on the date and at the reduction ratio indicated below. Date filming of this reel began 2 - 2-73 _ Reduction Ratio VaTiOUS Date filming of this reel ended Iredell County Assignees’, Receivers’, and Trustees’ Records 1910-1912 C.R.054.929.06 Receiver 1912 7 © ‘ 4 FOR RELIEF.—Judge.— Printed and for sale by Brady, the Printer, Statesville, N. C. SUMMONS FOR RELIEF. To the Sheriff of +e County—GREETING : Bou a are berebp Commanded to summon the defendarf.. -above named, if gee -be found within your County, to be and appear before the Judge of ae. Court, at a Court to be held ov County of. - it the Court House in Rani), on the eek wondey Se he (Monday of ..... Pitre the sdmé'being ‘the . BG may 0 Ga -19/%,-and answer the complaint, a copy of which will be deposited in the office of the Clerk of the igs Court for said County, within the first three days of said ‘Term, and let said Defemdant.......take notice if.4.7. they fail to answer to the sid compleist within that time, the plaintiff 2... will gpply to the Court for the relief demanded in the complaint. | «Hereof fail not, and of this summoms make due return. Given under my hand and seal of said Court, this. STATE OF NORTH CAROLINA, . \ In the Superior Court. ‘ the Defendgpt.....in this action, in the sum ot LA en OE however, if the Plaintiff... $ hicckous lh canceggleaecin cba oostookseb tie Shall pay the Defendant costs the Defendant... may recover “* Plaintiff..§.in this action. ~: * Witness our hands and seals, this. 7s aESe! day Of... YU Tye... Dhcasslbaidaaibeetaneisetige A. D. 19... i e ot - . wee be We! ectnn » At b bac Aregle Bi sworn says — worth the sum of two hundred dollars over and above his debts, liabilities and property exempt from executions. Sworn to and subscribed before me this. / 7. hss day ah ” Plaintiff's Attorney. SUMMONS FOR RELIEF, Returnable to of the Superior Court of. fer ' 4 @ SUMMONS FOR RELIEF .—Judge.—Printed and for sale by hreay, the Printer, Statesville, N. C. Tasddh . County.-~ Gn the Superior Court. SUMMONS FOR RELIEF. State of North Carolina, To the Sheriff a? th Dou are Hereby Commanded to summon —o emeeeeeeeeerecersseereccecee ounce ese teessecesseeccceoserersconesesenns the defendant... above named, if... i. .be found within your County, to be and appear before the Judge of our Saperior Court, a a Court to be held for the County of ./~ a at the Court House in * on the. sf Monday Mag, he peal ud! Monday Of AEE the same being the .. 74 = day of 194, and answer the complaint, a copy of which will be deposited in the office of the Clerk of the Superior Court for said Coanty, within the first three days of said Term, and let said Defendant take notice if ad tay fail to answer to the said complaint within that time, the plaintjff...§ will apply to the Court for the relief demanded in the complaint. am Hereof fail not, and of this summons make due return. Given under my hand and seal of said Court, this /7_ © ; STATE OF NORTH CAROLINA, \ In the Superior Court. County. We acknowledge ourselves bound unto../ oe the Defendant...~.in this action, in the sum of... Tae a So... : Delian, to be void, however, if the Plaintiff... $... sds tasscchtadeteelaghisien sng wibcellccibeaobdiedddathios oti hceakt shall pay the Defendant cost as the Defendant... may recover of the Plaintift...> cies in this action. Witness our hands and seals, this... /. 7.2... Lh Fag GF 4 Kh Uren pleheing sworn mer worth the sum of two hundred dollars over and above his debts, liabilities and property exempt from executions. Sworn to and subscribed before me this.../ Z. day of. ja sinpihelpbobahbeaciias Plaintiff's Attorney. SUMMONS FOR RELIEF, Returnable to of the Superior Court of North Carolima,: In the Superior Court- Iredell Counmty.: Before the Judge. D.S.Chandler,S.H.Houston,J.A.Chandler, J.L.Cloaninger,S.W.B.Overcash,J.C.Houston, Geo.L,Houston vs, Application for Receiver, . 2 Union Grocery Supply Company. : : : To His Honor, . Judge The plaintiffs would respectfully show that they are stockholders of record in the Umiom Grocery Supply Compamy,a corporation duly incopporated under the laws of the state of North Carolina with its head office in Iredell county,N.C,,Troutmans,R.F.D.,%.C.; that the sai@ Corporation has ceased to @o business and has closed its éoors; that the said Union Grocery Supply Company is insolvent or in iminent danfer of becoming insolvent; that some time during the year 1911 a 20 % dividend was declared by the directors of the saieé corporation and after a part of the said dividend had been paid cut to certain stockholders,the directors ordered that no more of the said dividend be disbursed; that quite a mumber of the minor stockholders were refused participation in the said dividerd and that to the best of the information yeur petitioners have beer able to ret there remains at this time about $70.00 due on dividends as above set out; that the debts of the corporation amount to about $450.00 and the stock as reported at the last stockholders meeting amounted to about $600.00; that your petitioners are informed and believe that J.0. Shinn, Gple, Rrthurs and other large stockholders have materially reduced their stock by retirement of same or otherwise; that in former meetings of stockholders, the said J.0.Shinn ana bad arthurs Claimed to have and had subscribed for a large vlock of stock and voted same in the meetings,and at the last meetang held om Jan, ,1912,the claim was made that they had mever had the said stock ané voted only « small mumber of shares; that mo claim was made that the said stock had been transferred but that they had never received same. Where fore your petitioners pray that that a receiver be appointed to take over the said corporation ,including the stock of roods,all choses in action,books of the corporation and all the property and fixtures ,books ete. to the end that the affatre of the corporation may be wound up,the debts paid and the stock collected im as subscribed and dispose of the stock of goods and to safely keep and protect all the interests of the said corporation and its stockholders until the final hearing of this cause. Your petitioners would ask the court to consider this petition as the affidavit in the cause, Jan.17,1912. tay ys {P-- Attorney for Pet oners,. | A. Oh being duly sworn deposes and says that. the facts set forth in the foregoing petition are true of his own knowledge, except as to those things therein stated on information and belief and as to those he believes it to be true. 0 ; Petitioner, Sworn to and subscriped before me this the 18th day of Jan.,191°%. North Carolina, : Im the Superior Court, Iredell County. : D.S.Chandler,S.H,Houston,.7.A.Chandler, : J.L.Cloaninger,S.W.B,Overcash,J.C.Houcton, g Geo,.L.Houston, 3 Va. Order Appointing a Temporary : Receiver. Umion Grocery Supply Company. ’ ; : This cause coming on to be heard upon the foregoing peta eee treated as i an affidavit,and upon motion by counsel for petitioners an& appearing that a summons has been issued in this action by the clerk of the superior court of Iredell county,N.C. and sufficient reason appearing for the appointment of a temporary receiver: It ishereby ordered that J.C.McLeam,be and he is hereby appointed receiver of the union Grocery Supply Company until further ordered by the Court and the said J.C.McLeam as receiver is hereby empowered to take charge of the affairs of the said Corporation and take the same and preserve al! ite assets and protest the interests of the Corporation and all its stockholdess and keep all the books,papers and other things belonging to the said Corporation subject to the orders of the court,whemever the said J.C.McLean shall have riled a good and sufficient bond in the sum of $1000.00 with the Clerk of the superior court of Iredell county,N".C.,and the defendant is required to show cause oefore 0,H.Allen, Judge Riding the 10th Judicial District at his chambers in the City of Statesville,N.C. on Monday,Jan,?°, 1912 why the foregoing order-or ome of like import- shall not be contimed in forsee umtil the fimal hearing im this cause; and until the forgoing order is mites the same shall remain in effect. i | ae <t. , North Carolina, Treéell County, Know all men by these presents,that J.C.McLean,D.S.Chanéler, S.H.Houston,J.1.,Cloaninger,S.¥,B,Overcash, are helé and firmly bound unto the Union Grocery Supply Company-in the sum of One thousand Dollars for which payment well and truly to be made we bina ourselves ,our heirs, executors and administrators firmly by these presents, Signed,sealed this the 17th day of Jan.,1912, The condition of this obligation is such that whereas J.C,.McLean has been appointed temporary receiver of the Mion Grocery Supply Company agreeably to the terms set out in the record in this case: Now therefore thes if the above boundem J.C.McLean shall faithfully perform the duties devolving upon him as such receiver and shall make proper settlemen of all matters ccmting into his hands as such receiver and if the said receiver should have been improvidently appointed to pay the said Union Grogery Supply Gomparmy al) such money as the seid Union 2uppty Grocery Supply VompaRy may suffer in damares on account of this said receivership,then this obligation is to be void,otherwise to remain in full force and effect. Im testimony whereof,we have hereunct set our hands and seals,the day a b itten, , ae & 4 ane year above wr en g ML oar Pica cc g (7 —t tai mM Ct “< (Seal,) ial a ae J “a° OT Ai ess (Seal.) Vy 4 LS Ag tyw7 (fle Seal.) ( DUM EF trQi2 hb :__(Seal,) / D.S.Chandler being sworn says that he is worth the sum of & above his liabilities and exemptions allowed by law. S.H.Houston being sworn says that he is worth the sum of & r and above his liabilities and exemptions allowed by law, J.L.Cloaminger being sworn says that he 4s worth the of &£@ Goover ané above his liabilities a) lowed by law. ' Swormto and subscribed before me this, 87th day of Jan.,1912. ‘ 5.6.8. bvercedn being sworn deposes and says that he is worth the sum of & AS?~ Over and above his exemptions allowed by law and his li ilities. Sworm to and subscribed before me this the 17th day of Jan,,1912. North Carolina,: ‘In the Superior Court- - Ireeell County.: Before the Judge. D.S,Chandler,S.H.Houston,J.A.Chanaler, J.L.Cloaninger,S.¥.B,Overcash,J,C,.Houston, Geo.'.,Houston ; ' " ve. ‘ . Application for Receiver, Union. Grocery Supply Company. To Ris Lonor, C.C. Layton Jutire. The plaintiffs would respectfully show that they are stockholders of recore in the Union Grocery Supply Company,a corporation duly incopporates under the lawa of the state of North Carolina with its head office in Ireéel1l county,N.C.,Troutmans,R.F.D.,"%.C.: that the said Corporation has ceased to @o business and has closed ita doors; that the satd Union Croecerv cuapery Company is insolvent or in iminent danger of becoming insolvent; that some time during the year 191) a 20 % dividend was declares by the ¢irectors of the saie corporation ane after a part of the seaid *ivedené haé been prid out to certepin atocrhotders the @ircectors orderee that fo more of the ‘said dividend be disbursed: that quite a number of the minor stockholdere were refused participation tn the eatd dividerd and that to the best of the information veur petitioners have been able to rat there remains at thie time about *70.00 édue on dividerds an above set out; that the debts of the corporation amount to about $450.00 and the stock as reportes at the lest stoskholéers meeting amountea to about #600, 003 that your petitioners are informed and believe that 7.0. Shinn flied art hure and other large stockholders have waterially reduced thetr etocr by | retirement -f same or otherwise; that in former meetings of stockholders, the eaid J.C.Shinn and Aish, arthurs Claimed to have and had subscribed for a larre vlock of stock ane votea same in the neetings,ané at the last meetang hele on Jan. ,1912,the claim was made that the} had never had the said etock and votes only a small number of shares; that no claim was mage that , ] the said stock had been transferred but thet they had never received same, § a) 7 There fore vour petitioners vray that that a recetver he appointed tao take over the said corporation ,includine the stock of roode,atl chosen or é action,books of the corporation and all the property ane fixgtures books. = y etc. to the ene that the affatre of the corporation may be wound up,the ect 2 paid ane the stock collectea in as subscribed ana eispose of the atock of ~~ goods ane to safely een and orotect 211 ‘he intereata of the said corporation an@ its stockholders until the Sine) hearing af thie crure, Your petitioners would ask the court to consiger this petition an the AN ph Til lon attorney For Petitiqners. affidavit in the cause, Jan.17,1912. being @ulvy aworn denoeer and save that the facts set forth in the foreroing petition are true of his om Ynewledre, excep! as to those things therein stated on informetior and helie® ani as to those he believes it to be true, (° Petitioner. Sworn to and subscribed before me thia the 18th dav of Jan.,,1%1%. North Carolina, In the Superior Court, Tredell County. : D,.S.Ohandler,S,i.Houston,.".A.Chandler, JiL.Cloaninger,S.7.B.Overcash,J.C.Rouston, Geo.!..Houston, Vs. ' Order Appointing a Temporary ai ‘ Receiver. | -Mnion Grocery Supply Company. ¢ / This cause coming on to be hfardé upor the foreroinr petition tteated ar an affidavit,and udon notion by course? for petitioners and anpearine thet e summons has been iesued Ir thie action hy the clerk of the superior court of Iregell county,.C. and sufficient reason appearing for the appointment or a temporary receiver: It ishereby oraeree that J.C.McLean,be ane he is hereby appointed receiver of the union Grocery Supply Company intil further oréered by the Court end the said J.C.’cbean as receiver is hereby empowered to teke charre of the affeirs of the saié Corporation ané@ tare the sere and oreserve #17 ite acests and proteet the interests of the Corporation are all its stockhcléere ane keep al) the booksa,papere and other things belonring to the said Corporation subject to the orsers of the court, whenever the sai J.C.ucLean shall have riled a food ane sufficient boné in the sum of *1000.00 with the Clerk of the superior court of Tredell county,%.C.,and the defendant ir requires to show cause before ©.H.Allen,Judre Ridine the 10th Todicital District at his chambers in the Citr of Ctatesv411e,".C. on "ondev,Jan,%%, 1°1f why the foreroing ordéereor one of like import- shal? not be cont inured in forge until the final hearing in this cause; ane until the forgoing oreer is woeifice the same shall remain in effect. Thie 18th eayfof Jan.1912. > 3 North Canolina, Ireéell County, ) Ynow al mean by these presenta,that J.C.'clean,D.S.Chandter, S.H.Houston,J.' .Cloaninrer,%.”.B.Overcash,are held and *irmiv heurd unto the Union Grocery Supply Company in the eur of “ne thousané Dellarsa for which payment well ane truly to be made we bine curselves,our heirs, executors ane aeministrators firmly by these presente, Signed,senles this the 17th dav of Jan.,191f. The condition of this obligation is such that whereas J.C.Yclean har been appointed temporary receiver of the Mion Crocery Cunniv Cornanyr arreeably to the terms set out in the recoré in this case: Now therefore xmm if the above bounden J.C.)iclLean shall faithfully perform the duties devolving upon him as such receiver and shall make proper settlemen of all matters coming into his harés as such receiver ane if the said receiver should have been improvidently appoint*é to pay the said Union Grocery Supply Cormvany all such money as the srid Union 2uveix Grocery Supply UVorpany may suffer in damarer on account of thin said. receivership,then this obligation is to be void,otherwise to remain in full force and effect. In testimony whereof, we have hereunot set our hangs ane seals,the eay VAIS cr<¢t ane year above written, " (Sen1.) (cen?.) (ceal.) ("eal.) (Seal.) D.S.Chandler beings sworn says that he is worth the sun of *2g7. over and above his liabilities and exempticns sllowed by 7“ | : Z , ©.H.Houston being sworn save that he ia worth the eum of & oyr ard above hie Mabilitier and exemptions v)lowed by Taw, J.1..0losninger being aworn eaayrs thet he is worth the mim of ez FOrer and above his liabilities allowed by law. , a a Swornto and subscribed before me this, Og Ah Mate te deh Ah 4 Ce he 27th day of Jan,.,191°. v O S.8.B.Cvercash being sworn deposes ané says that he is worth the sum of Cver ane above his exemptions allowed by law and his liabilities. Sworn to and subscribed before me thin the 17th day of Jan.,1°91°. North Carolina In the Superior Court Iredell County Before the Judge D.S. Chendler and others | ve REPLY OF PLAINTIFFS. ' The Unicn Grocery Supply Company The pleintiffs replying to the Answer of tho defendant allege: That the stock of goods inventoried $543.02, thet these plaintiffs are not informed as to the actual value thereof. That the pleintiffs efter filing their application for a Receiver for said Corporation, have ascertained that the debts of the Corporation are as follows : First Naticnal Bank of Moore: ville, Balance on note $24.75; Chattanooga Medicine Company, Account $22.00; Miss Beulah Johnson, Clerk Hire $7.00; That the Four Hundred Dollars alleged to be due to the Merchants & Farmers Bank of Mooresville, is a personal note executed by J.C. Shinn, i!.l. Arthurs and M.C. Arthurs, and was given for the purpose of securing money to pay on their stock subscription, and that the same never has been,and is not now, a debt of thic corporation. This note was exenuted on October 1fth,1909, and the Corporation was orgunized on October 16th, 1909. That on January 11th,1912 , a mecting was held and upon motion it was ordered that the stock of goods be given to whomsoever would pay the debt of the Corporation, but . on January 13th,1912, another meeting was held and the action of January 11th,1912, was annulled, and g.c, arthurs “aia not, and has not purchased the seid stock of goods, but was in possession of the same, @s Secretary and Treasurer of the corporation. That A.M. Johnson is not a stockholder of Record, “+ having s0ld his stock in said corporation on January 16th,1912. The plaintiff heaving fully replied to the Answer of the said corporation, ask that the temporary receivership be made rermanent . Attorney tor the plaintiffs. J. A. Chandler, being duly sworn, deposcs end suys, that the foregoing Reply is true of his own khowledge ,except as to those matters and things stated therein upon information and beltef and as to those he Sworn to and subscrib this the ist ON Ld ptt x CAQ fhe plaintiff having fully replied to the Answer of the said corporation, ask that the temporary receivership be made permanent . Attorney for the plaintiffs. J. A. Chandler, being duly sworn, deposes and says, that the foregoing Reply is true of his own khowledge ,except as to those matters and things stated therein upon information and bel‘oef and as to those he believes it to be true. Sworn to and subscribed before me this the lst day of February,1912. epee Be at Baa | ae. rt ee pee x: gare 2s y wm Ahtnnt-, . ee aie fours U, [$/% cme on i lene Peri «| Slaeate, Re nurnticng Cindi ti ene | Peat le taal onde 9 male a ci Mgt si 9 nal tllne, at outk foiercy we SSO, er a cae Ani. tecdariata: , Ak Wik hme ag tie ; [i238 f Banta 1 — S400: a Cat wf nade pur ft Firak Midionnb Gpauk Lb: ad andi he ie 2k fae of. avec , A frail camel w Me Be a we ro re ~ one. So cc = ~? o ’ : ; ‘ ' ) ' ; ' i | | | | os | | pid i | | | | | , | | | | i a shi i iis nies i | 08 f. Horth Carolina: In the Superior Court Iredell County D. S. Chandler and others vB Report of Referee. Union Grocery Supply Company To the Superior Court of lrecell County-; The above entitled matter was referred to the unégersizned Referee by the Judge of the Superior Court at the PO“ Term, 1912. On the _ day of July, 1912, at the Court House in Statesville, I proceeded to hear the evidence in the cause, all parties being present and represented by counsel. From the evidence in the case, I find the following facts; First. nat the Union Grocery supply Company was duly created a corporation by the State of “orth Carolina and the chater of said Corporation is recorded in the Coporation Record # 2, pages 229 to 2351 inclusive, in the office of the Clerk of the Superior Court of Iredell County. Second. That the following are the stockholders of said Corporation and the number of shares of stock subscribed for by each as is shown by said charter; J. C. Shinn <7 shares. L. Arthurs vd Villiems 2 Johnson Harteell Campbell Shinn, dr. Deal Arthure Beaver Houston ‘ - Houston _ shares. " Simpson " Cloaninger " Spears ~~ BD - Cw Houston n “I Arthurs Arthurs McLean Cloaninger Goodman Goodman H. Hobbs A. Wagoner S. Chandler oS SS Oo ff DD BB &: OO. C. Beaver Third. That it appears from the evidence phat the following shares of stock were subscribed for but that same were never paid; y/ Williams J. Deal M. Arthurs Js Arthurs J. Cloaninger J. \. Goodman S. Wagoner L. Beaver M. Arti.ure Be tay J. C. Shinn 22 ” That the par value of the shares of stock in the said corporation ig five do'lars per share. Fourth. That no record was kept of the stockholders meetings or of the meetings of the Board of Directors, the Secretary and Treasurer of the Company mat not being present at a majority of said meetings. “a Fifth. That prior to the incorporation of the Comapny, at a Farmers' Union Meeting, at which meeting a majority of the prospective stockholders were present, the question of procuring money for the new company wes discussed by those present. The proposed capital stock had not all been paid in. Those present were anxious to secure the charter and start bueinese. As more than $400.00 of the subscriptions war not yet paid in, those present told J. C. Shinn, M. L. Arthurs and ii. C. Arthurs to go ahead and borrow the sum of 400.00. Sixth. That on the 15th day of October, 1909, J. C. Shinn, M. L. Arthurs and ii. C. Arthurs executed their note to the Merchants and Farwers Bank, of Mooresville, for $400.00. The bank deducted the interest for six months and placed to the credit of M. C. Arthurs, Secretory & Treasurer, the sum of $388.00. This note was renewed from time to time as the same came due, in the name of the makers thereof, the interest on the same being paid by check ¢rawn on the the account of the Union Grocery Supply Company. Seventh. That the loan of the said $400.00 was not authorized by the Corporation and that game was never formally ratified by the Corporation either at a meeting of the Board of Directors or ata / Stockholders meeting. The Secretary and Treasurer of the Cor- poration and the President of the same, who were two of the makers of said note were in full charge of the business of the Corpora- tion. That the interest on said tmkk note wae paid by the Secretary and Treasurer by the consent of the President from the funds of the Corporation. Eighth. That said note was intended by the makers thereof to be an obligation of the Corporation to cover the unpaid stock subscriptioms due said Corporation, so that it could begin business with the full amount of the capital stock. The said note would have been made in the name of the Corporation but for the fact thes I the bank would not permit this to be done for that the charter of ea a0 ae of the corporation had not yet been procured. Ninth. That at the time said note was executed, the Union Grocery Supply Company was not in existence. | Tenth. Thet the stockholders of the Corporation permitted the Secretary and Treasurer to treat said note as an indebtedness of the Corporation and to pay the intereét on the same from the funds of the Corporation for more than two years. Eleventh. That $545.00 of the principal amount of ssid note was to cover stock subscri,ptions made by J. C. Shinn, ii. L. Arthurs and N. C. Arthurs to the capital stock of said Corporatior, which subscriptions are still due and unpaid. That J. C. Shinn was President and MN. C. Arthure was the Secretary anc Treasurer of the Corporation. Twelfth. That the ctock of goods of eaid Corporation has been s0ld to to ii. C. Arthure upon the condition that the said Arthurs pay the debts of the Corporation, at which time the note for $400.00 was includ: d in said debts. That this sale was made by a vote of 37 shares for enid eale to 22 shares ar-ainst said sale. This sale wae afterwards confirmed by the Superior Court of Iredell County as being fair in amount, it being left open as to whether said note was the note of the Corporation. This is the questior submitted to the undersignec Referee, Upon the foregoing findingsgy of fact, the following arc wy conclusions of law; First. Upon the findings of fact in paragraphs five, six, seven, through ite officers eight and ten, tke said Corpomation/assumed said indebtedness as an indebtedness of the Corporetion. Second. Upon the findings of fact in paragraphs two, three, four, seven, nine and eleven, although the Corporation assumed said in- debtednesse, said indebtedness was assumed by reason of the fact ass that two of the makers of said note were officers of the Corporation, in entire charge of its affairs. That these officers, having bor- rowed said money in their own names to take care of of unpaid stock subscriptions of which amount the greater mammmat portion wes due by themselves, and being trustees for the stockholders of the Corporation, had no right to transfer said indebtedness to the Cor- poration without first paying their own indebtedness to the Corporation. Third. That the Union Crocery Supply Company is liable for the amount of 355.00 of the principal amount of said note to be reduced by the interest on 3345.00 from October 15th, 1909 to the January lith, 1912. Fourth. That the sum of $345.00 together with the interest on $345.00 from October 15th, 1909 to January llth, 1912 is due the Union Grocery Supply Company by Mh. C. Arthurs and that said amount should be prorated among the stockholders of said Corporation in proportion to the number of shares held by each ae is shown by the charter of said Corporation. That sShexatuskkoidexcaxsatxaxt xx in prorating said a-ount the indebtedness of the stockholdere set out in paragraph three of the findinge of fact other than J. C. Shinn, M. L. Arthure and Ww. C. Arthurs should be taken into account. Respectfully submitted, Referee. 42 Bafa Corel A Ri etond conelusin * Ate Mrvriomigin Cai. St efladett ts uf AR ae Gf, tout iin _— — C mg wae sa aerial =" — — i a at . j North Carolina In the Superior Court Iredell County July Term,1913. D.S.. Chandler ,and others. -VS— Union Grocery Supply Co. This cause coming on the be heard before the undersigned on the pleadings and the whole record, including the Report of the Referee, and the exc ptions thereto, filed by the defendant, and after hearing argument of Counsel: It is considered and adjudged by the Court that the exceptions filed by the defendant from One to Seven inclusive be, and the Same are hereby overruled. t is further considered and adjudged that the findings of fact found by the Referee be and the same are hereby ratified and approved. And it further considered and adjudged that his conclusions of lew as set out in his Report are approved. It is further considered that the case be continued,to the end that the Court may have before it the facts to enable it to make proper order for compensation of Receiver and also for the Referee. To the foregoing order the defendant excepts. North Carolina f Iredell County | D .S. Chandler, et al ~VEe- Before Dormun Thompson, Union Gro@ery Supply Co. Referee. Plaintiff introduces the Ninute Book 15, page 486, contuining order of G.8.Furgeson, Judge of Superior Court, Referring this matter to Dorman Thompson, Referee. At request of the defendant's witness HD. Hills, witness for the defendants, introduced out of reguler order-- Cashier Merchants eni “armors Bank-- took note of J.C. Shinn, l.1. Arthurs and E.C. arthurs-- note civon October 15,1909 for $400.00. E.C. Arthurs principal , J.C. Shinn and U.L. Arthuré sureties-- all names anpear- ing on face of the note and under scecl. Q@. At the time this loan was negotiated Mr. ills, Stute to the Court what statoment wag mede, if any , and by whom, as to the purpose end ior whom this money was borrowed? Obfecticn by the laintiff. brirruted - @. Mr. Shinn, ac I said made application for a loan-- agkod 4” we could loan the Union Grocery Company $400,00-- but in making this appli cation he 8.id vo ore in the process of orgenizetion, or had applied for a charter, or were going to aptly for a charter, exnected to incerporate the Company. The loan had been arrunged, he arked me if the Union Ci ocery Compeny could sign the peper, and I told him it could not uniees the Charter had been grantod-- Q. What hud been incorporated-- Ho avied re if hie endoirvorent vith Mr. KL. arthure ead lr. .O. Agthurs would be satisfectory, 1 told him it A ( would, and the note was 50 signed and s0 accepted. Q. For whose credit was the money placed? A. To the credit of m.C. Arthurs, Secretary & Treasurer of the Union Grocery Co. ‘ Q. Who paid the interest on that paper? A. The interest was deducted, just @iscounted, and the interest after that was paid by Mr. M.C. Arthurs, Secretary and Treasurer. Q. Look at that book, I now hand you Mr. Hills, state what 4t is? Ohjection by plaintiff. Q. What is that Mr. Mills? A. This is a pass book, Merchants & Farmers Benk,Mooresville,N.C., in account with M.C. arthurs,Secretary & Treasurer. Q. Does it show on the Bank Book, what he was Secretery and Treasurer of? A. No,Sir, it does not. Objection by pleintiff. porerveete ke. Q. He was Secretary and Treasurer of what? A. We took it to be, or understood it to be Union Crocery Co. Q. Well, what deposits did you ehter upon that book? Whose deposits did you enter upon it-- What Company? Objection. A. The deposits made by Mr. arth .rs-- made by Mr. Arthurs for the Union Grocery Co. Q. What éheck did you hohor-- *hat account I mean? Objection by plaintiff. Q@. Checks signed by uC. Arthurs-- signed by the Secretary-- those were the ones we were directed to honor. Q. What Company? A. Union Grocery Co. Q. . You look in that book on about October 15th er 16th, and state whether or not there was ever & deposit there representing the loan of $400.00, which you testified you have made-- note under seal, and handled in your Bank, which you say wee placed to the credit of Union Grocery Co? A. I find on October 15th, the dey this note was dated, a credit * 4 of $388.00 was entered to. Mr. Arthurs,Secretary & Treasurer's a count. : -2-- , ) Sea 4: ‘Q. What length of time did this note run,Mr. Mills? A. Six months-- which the book shows. the interest is to $12.00 Plaintiff objects to all the foregoing. funnest en Defendant offers Record, which has been identified by wit- ness-- that part of the record,showing deposit of $3588 .00 on October 15th. Plaintiff objects, bivannccteds.. Q. Mr. Mills have you got a record of the Union Supply Company deposits. A. I have only the account of kK.C. Arthurs,Secretary ald Treasurer of the Union Grocery Co. Q. You may state tc the Court what you know about the Union Grocery. & Suprly Co-., and officers, Secretary and Treasurer. Plaintiff objects. Q. “ho made the Bank Record? A. I have that. I find that on October 16, a credit of $388.00 was posted to the account of i.C. Arthurs,Secretary & Treasurer. As to how that was, I am not certain it could have happened in this way, the note was very probably arranged after banking hours, and so it appears on Mr. Arthurs Pass Book on October 15th, but it did not go on the Bank Book until the next business day. Q. The entry that appears on this book as the 16th, is that the same deposit? A. Yes,Sir, Same deposit. Q. Now, Mr. Milde, aftor refreshing your memory from the pass book and the record, what is your independent recollection of this transaction? , A. You mean this particular transection? Q. Yes,after refreshing your recollection from the record, memorandum of deposits of the Union Supply Company-- or the Union Grocery Supply Co., or whatever the name of the ns can you answer that question Mr. Mills? «f- Ti, A.- Why Mr. Shinn stated that the Company, which we had known as the Union G1 ooery Co., that is my recollection , I do not know about that, were in the process, or had applied for a charter and were expecting to be incorporated, having sold more stock. I do not remember thet he stated that there was to be any chenge of name. I do not know anything about that. Q. Of your independent recollections, what mmount of money can you state to the Court, which sum of money they borrowed, and it was placed to the ereait of M.c. arthurs, Secretary end Treasurer, you credited this $400.00, less tic discount on the note? A. Of three per cent, $388.00. Is that note still in existence? A. Yes,Sir. Q Q. Have you the note here? A. No,Sir. Did you bring the renewal of it? A. Ho,Sir. That is still in the Sank? A. Yes,Sir. Who has been paying the interest on that note? Mr. N.C. Arthurs, Secretary and Treasurer. Do you remember how he paid it? By check on their account. I think invariably I won't be positive, as to that. Q@. Now is it still standing in the mame, as originally given? A. Yes,Sir. Q. Now, Mr. Millis yor may explain who filled it out, at the time of the renewal? A. At the time of the magurity of the note we notified Mr. arthurs, Secretary & @reasurer, as principal of it, Ecusualy made out another-- I drew the usual form of note, mailed it to him and he usually mailed it to the bank or sent it back by band. Q@. You just followed the old form? A. Yes,Sir. I think the note is in identically the same form, the date only changed. ij onli r Q. You explained why it was that way originally? A.Yes,Sir. Cross-Examination: Mr. Turlington. Q. Mr. Mills this Union Grocery Co., had been depositing in your bank for sometime; prior to this time, and the account had run all the time in the aame of M.C. Arthurs, Secretary and Trasasure?? A. Yes,Sir. Q. Your records show they’ had been running this account at least from April 1909? A. Yes,Sir. Q. That is April 16th,1909. A. I do not know whether that is transferred or not, but certainly from that time. Q. Does your record show that this account has ever been transferred, or had it run alcng just the same way-- until up within a recent period? A. I don't know, probably since the first of the year, the account was changed to M.C. Arthurs & Co. Q. At least it wes got changed from April 16,1909, until the first of this year? A. I think it may have been prior to the first of the year, it was sometime during the last winterw-approximately the first of the year. Q. That account was in the. name of U.C. Arthurs, Secretary and Troasurer, at the time they borrowed this money? A. Ye#,Sir, Q. Was the old concern indebted to any one that you know. of~-- did they state to you any bills of the old concern outstanding? A. Why Mr. Shin said that they had some bills to pay? Yes, Sir, he said they were either in the act of purchasing or had alroady purchased go0de-- they he wanted the money right away to pay these bills. I could not say just at that time whether those purchases had been made prior to this, or had been made afterwards-- I know that he was anxious to close up the «.« "% deal that day, so as to have it in shape to check it out. ~~ Q. When was the first check paid out?-. «Be Have you any record there to show when the first check was paid out of the money that was deposited of the $400.00? A. Yes,Sir. The first check was paid on the 19th. Q. To whom was it paid? A. D.B., we just take the initials, I ao not know who that was unless it was Belk Bros. Q. Where there any other items paid out ah tbat time? A. On the 20th; $10.70; and $53.52; on the 21st $12.12; I ind no more until the 26th $5.98. Q@. Now, Nr. Wills do you knuw as @ matter of fact, who the stockholders were, or the partners were of the Union Grocery Company? A. I do not. Q. Did Mr. Shinn evor tell you he was énterested in the Union Grocery Co., A- Yes,Sir. Objection by defendant. Q. Did Mr. H.C. Arthurs e¥er tell you what stock he had in the Union Grocery Co? A. I 4o not know whether or not Mr. Arthurs made a specific statement it was generally known that he was manager, 1 do not know whether I heard Hr. Arthurs say so-- that he was Secretary and Treasurer of it-- not prior to that time. Q. He was Secretary and Treasurer fhe he came into the bank until this lcan was made? “A. Yos,Sir. By the Court:- You say the account ran from April ,1909, prior to this loan in October, and you say you head known “u.Cc. Arthurs to be Sectetary and Treasurer and that account was in his Bame as Secretary and Treasurer all the time? A. As far as I know. It was certainly from that time up un- til recently about the first of the year, Q.- The account as far as your books are concerned, the account was one and the game account from April 19, until the account was closed? A. As far as the checks were concerned it was. wD Re-Direct. By Mr. Crier. Q. The Company was known as the Union Grocery & Supply Co., up until it was incorporated ? A. That was our understanding. Q@. And the account was opened there on your books as M.C. Arthurs, Secretary & Treasurer? A. Yes,Sir. Q. Was Arthurs Secretary and Treasurer of the new Company,. after it was incprporated and doing business? A. Yes,Sir. Q. Now, Mr. Mills we come th the payment of certain checks-- that is the date they were paid out of the Bank? A. I do not know what date: the checks were drawn-- I have n& that information at all. @. You don't know about the checks coming in at that time-- may have come in later. A. My records only show the date the checks were paid. @. Checks issued on the 15th of October,1909, might take a week or ten days to get aound to your Bank? A. Yee,Sir. Q@. One issued prior to that time might come in a week or 80 late? A. Yes,Sir. Re-Cross-Examination. Q. A check thst cnn idease the first of the mont} might have gone the rounds and not been paid by the Bank until the 19th, would it not? A. That would depend. Q. When a check issued to say to Charlotte on the 14th day of October, it would be out until the 19th before it wopld get back to you? A. That would be irregular, 4 check usually on Mooresville, and mailed on the 14th, would likely come back 16th-- two days is approximately the time. @. Some people do issue checks when they have no money *n the Bank and they are held until they get some in there? A. Yes,Sir. The defendant offers the following part of the record of Merchants & Farmers Bank, October 16,1909, credited by deposit $388.00. The plaintiff offers in evidence the paper -- all items unon the above paper, marked Exhibit "B"-- appearing prior to t the 15th day of October-- from April 16th, to October 16th,1909. Objection by defendant. brmerele The plaintiff offers next the Charter of the Union Grocery & Supply Co. Found in Corporate Record Book #2, page 229-230-231 inclusive, done in Raleigh in office this the 16th day of October, in the year of our Lord,1909, signed by Mr. Hartness on the 15th and by Mr. Grimes,Secretary of State, Raleigh on the 16th, 1909. The next evidence we offer is the Annual Statement of the Union Grocery & Supply Company for the year 1910 first and the year 1911, together with certificate of J. Bryan Brimes, Secre- tary of State. Objection by defendant to the forefoing Exhibit "0". (tnsetd_ The next evidence we offer is the State Tax Commission of North Carolina for the year 1911, page 145; the following: Objection by defendant. eviasuaaitad. Union Grocery & Supply~Co., Officer,M.C. Arthurs, Address Troutmans, Capital Stock $850.00; Value Capital Stock 8500 .00 Assessed Value Real and Personal Property $500.00. Mr. Sherwood Houston, being sworn, seys: Direct: By Mr. Turlington. Q. Mr. Houston, go ahead and state to the Court, any conver- sation that you had with Kr. Shinn, in regard to this $400.00 note in controversy, and anything you know about it, in your own way? «--8— A. I never had any conversation with him about the $400.00 note. Q. State what you know about the transaction in your own way? A. That debt the Union Grocory Company put there or any other sum, I aia not know anything about that, @id not have any stock in it up to sometime first of October--- they wanted me to subscribe to the new concern-- said they were going to have it incorporated- he insisted on my taking five shares $25.00, or some amount, what- eves I would take, finally I subscribed $10.00 ,for two shares, he told me he had twenty seven-- he put mine down what I subscribed- he said I could hand him the money later, showed me where he had his amount subscribed in a little memorandum book-- I think he just used the word, his amount of shares-- 27 shares. He told me that he and M.L. Arthure and Mr. Comer Arthurs was going to continue to look after it, said he would guarantee me I would not loge my money-- I could put in any amount I wanted to. I subscribed two shares. Q. Well ,Mr. Houston, 4@@ you ever hear any of them, Mr. N.C. Arthurs, Mr. M.L. Arthurs or Mr. J.C. Shinn say anything about this $400.00, and for what purpose it was borrowed? Objection, grtr we H&L &. Tell which one it was? A. The firet I heard of the money for sure being borrowed, I might have heard a little rumor-- the first I heard of it, might have been since lest Christmas. ‘Mr. M.L. Arthurs said ina Directors Meeting, when they were talking about some plan or other-- what ave you going to do with us fellows, those on that note for money borrowed; I did not know how much. Mr. Shinn mentioned it to me one time going up the road, onee after that, might have been in February or March sometime -- about the money they had borrowed-- he did not say whether the Company was re- sponsible for it, or how-- Ne just made a remark to me something like this, you know there is money borrowed we have used, it's got to be paid back-- the first I ever heard was at the other meeting before this, that has all been since this lest Christmas. Q@. You have been a stockholder from the very beginning? A. Yes,Sir ‘ ' / Q. What proposition did you hear in the Driesctors meeting about winding at up? Q- How, please state to the Court wherether there was in so far as your knowledge goes any order passed by the stockholders giving or authorizing this loan? No,Sir. Or by the directors? No,Sir, not a thing that I ever heard of. State to the Court, whether or not you how their stock was paid up; have you heard Mr. Shinn or either one of the Arthurs say how their stock was paid up? A. Wo,Sir, I have not. Cross-Examination. By Mr. Grier. When were you put in as a Director,Mr. Houston? Sometime about the first of the year? Q. Thés last year? Before it went into the hands of a receiver. How long after that? Sometime after the first of the year, I think it was . I do not remember whether they had a mecting of the directors any time last fall or not. Q. If you were a director, you did not attend any of the meetings? A. Ho,Sir, I did not attend any of the meetings. Q. The thing went in the hands of a receiver pretty soon after that? A . It 414 not go into the hands of a receiver until April 414 it. Q- Five or six months after that? A. Yes,Sir. Q. Were you not president at the mestine when you were elected a director? A. No,Sir, I wae not. Q. Did you not attend the stockholders meeting? A. No,Sir. I had attended the stockholders meeting sometime before that. Q. How many 414 you attend? A. I could not tell you , some two or three I guess, I remember being at a meeting there in August. Q. Was not a report of the condition of affairs made to the stock- holders in August? A. I think it was. “Q. What was the debt? A. They 41d not report that. -10- 4 f ' my recollection is they did not take any figures there. He oe Q. Did no one say anything about it? A. NO. &. Elected who? A. I was at the meeting when they elected Mr. Johnson President, instead of Mr. Shinn, that was all that was done. Q. That was the only meeting you were at? A. @ do not remember whether I was at any other one or not. They voted there that day, either Mr. T. M. Goodwim or Mr. Jge when the vote came to Mr. Shinn voted for Mr. Arthurs-- foted his 27 shares and elected him, and elected Mr. Johnson, President. Q. Now,Mr. Houston, you say until about October sometime they had keen running the Union Grocery Supply Co., or the Union Grocery Co., as a partnership, and Mr. Shinn came to you, and gaid they were going to incorporate it, and solicited you to take some stock with it, and you did take two shares? A. Yes,Sir. Q. The members were who? A. Mr. Comer Arthurs, he was Secretary and Treasurer of the Company, Mr. Shinn said we have got a controlling interest, said I will be President and Mr. Arthurs will be Seoretary and Treasurer, and he would guarantee me, I would not lose my money. Q. Did you know where they did their banking business? A. No,Sir, I didn't. Q. Have you learned since? A. I have not for sure. I knew they done a banking business. I never saw any of the chetks, and could not swear what bank they were on. Re-Direct. By Mr. Turlington . Q.Mr. Houston, how many shares of the stock reported as having been gubsoribed and paid in,if you recall? A. $815.00 was what was reported as paid in.Q.That was the night they organised, they said that night they had $815.00 had been paid in? A. Yes,Sir. elie Re- Cross-Examination : Mr. Grier. Q. Mr. Houston , I will ask you if at the meeting in last January, if this $400.00 debt to the Bank was not mentioned, and if you did not state it was « just debt and ought to be paid? A. I said it was a just debt, Ho,Sir, I aid not. Q. Did you not make a statement in the meeting, the sum and substance of it was that this was a just debt? A. I might heve said, if it was 4 just debt it ought to be paid out of the store. I aid not know anything about the debt, the time 4t come into the store-- when $t got in debt there the store paid the subscribed stock. You subscribed for two shares of stock? A. Yes ,Sir. How many shares hevo you got now? I think I have 15 shares, I am not certain. When did you buy them? I bought them on Friday afternoon, Thursday night and Saturday afternoon, upon the vote to give the store to the man who would pay the debts, Mr. Arthurs agreed to do it, and it was assigned over to him. Mr. Wagoner came back to my house on Thursday following, as well as I remember. Q. When did you buy the stock? A. I bought it Friday afternoon after I left the Drectorse meeting. Q@. You had e meoting and agreed to sell the assets of this concern to whoever would take it and pay the debts-- this $400.00 was one of Ay It was not included in when they voted it. Mr. Johnson said we will take a vote-- said the Union Grocery store is badly in devt, we will take a vote on giving the store to any one who will pay the debts. Q@. Mr. Chandoler said what are the debte?A.Mr. Johnson said I cannot tell you, but it is badly in debt. Q. Ghey took a vote-- and Mr. Arthurs got it, and it was assigned over to him that afternoon, as I started to tell you. Q. That is the sale that was affirmed here by a judgment of the Court at the January Term of Court? A. I suppose of, Yes,Sir. -12- Q. It was after that you bought these shares? A. It was after another directors meeting that I bought the shares. Q. What did you pay for them? A. I paid different prices. There was an account between me and one of them-- that is Will Simpson, he agreed to take the account and $1.00. Q. What was the amount of the account? A. I don't remember, what was, he may know. What is your recollection? It was $2.50 or $3.00. How many shares did y%u get from him? A. wo shares. They represented the face value of $10.00? A. Yes,Sir. Well who else? A. I bought one from his brother,Forney Simpson. What did youpay for it? I think I paid him an account that was between us and $1.00 in money, don't know whether it was anything more or not. Q. You paid him one dollar? A. Yes,Sir. Q. How some others? A. I bought Mr. Johnson's. Q. What did youpay hin? 4. He was the first man that made the proposition to sell to me-- he told me he would take half of what I got~* out of it in the next twelve months. Q. You took him up? A. Yes,Sir, he asked me to take it-- if I would give him half I got out of it in the next twelve months. Q- Who else did you buy from Mr. Houston, Mr. Johson, came to you I believe? A. He was the first one I bought. Q. You did not go to him? A. No,Sir. Q. How many shares 414 Mr. Johnson have? &. siz cheres. Q. Borney had how many? A. Three shares. I think D.F. Simpson had two-- he was the other man-that makes eleven, may be it was only 13 shares I have. Q. Did you buy any from E4 Spears? A. Yes,I was to give him half of what I got out of itf Q. Did he come to you, or did you go to him? -13- * A. He was with me when Mr. Johnson sold to mg he said you may have mine, if you will give me what you give Mr. Johnson. Re-Redirect. By Mr. Turlington. Q. At the time Mr. Shinn, called for the vote to pay the debts how much stock did he have, how much had he been voting up to that time? A. He had been voting 27 shares. Q. Was Mr. M.C. Arthurs in the meeting at the time Mr. Shinn made the motion? A. Wo,Sir, he never was at the meeting I was. Q. Know when it was? A. Yes,Sir, last January-- I don't know how long it had been. Any how Mr. Shinn got me to go with him the first time. By the Court: Q. At the time at which thie property was sold, this sale was authorized, was any statement madé as to the amount of the indebtedness? A. No,Sir. Q. Amy amount given? A. No,Sir. Q. You say the Secretary and Treasurer was not even there? A. WNo,Sir. Mr. E.F. Hartsell, being duly sworn,says: Direct. By Mr. Caldwell. Q. Mr. Hartsell did you ever have a conversation with Mr. Shinn about this $400.00, that we are talking about here? &. Have any conversation? Q@. What 414 you hear him say about it, when was it, and where was it? A. It was, I forget when it was-- the place was at a directors meeting. Q. When Mr. Hartsell? A. It has been a year ego, may be a little over it. He was talk- ing about the sharee-- he said they had borrowed $400.00,he and the Mr. Arthurs to pay up the subscribed stock- that they had on hands. Q. That he had? A. That they had. He said they had borrowed that? -14- Meaning that borrowed money? A. Yes,Sir. Q. That they had borrowed this money to pay for the stock that was subscribed in that store? A. I think they were taking the inventory of the store then. Q. Now which one of the arthurs was mentioned? A. I Kon't know whether either name was called or not. Just said they had stock, I think they were taking inventory of the stock- when the people had a meeting-- I was director of the Troutman Local. Q. Was anything said by Mr. Shinn or the Mr. Arthurs about where they put the money? A. No,Sir, they never said. Q. Do you know what they did with it? A. No,Sir. I head Mr. Shinn state they had borrowed $400.00 to pay for their stock, I had some stock in their at the same time. Q. Do you know how much stock Mr. Shinn had? A. 27 shares. Q. Do you know how much Mr. N.C . Arthure had? Mr. H.C. Arthurs had 27 or 28 shares. The other Mr. Arthurs had how much? A. I don't know. What were the shares worth? A. $5.00 each. Now, Mr. Hartsell, when were you elected as a director? I think it was, I was in there something over a year. Did you go in as a direotor when it was first organized? I am not positive as to that. Did the directors of the Company authorize these men to borrow this money for this conc ern? A. They did not, Q. In the stockholders meeting that you ever attended did they authorize them to borrow money for anything for the concern? A. They did not. , Cross-Examination. By Mr. Grier. Q. Mr. Harteell how much stock did you have? A. Two shares. You don’t remember when you were put in as a director? A. I won't say. . Q. You say it was the firet of the year, this debt was reported? A. Yes,8ir. -15- 4 Q. Mr. Shinn said, I ask you Mr. Hartsell, and I want you to be on your guard-- I am on oath-- that this money wes borrowed in order to buy stock for this Company, not in this Company? A. Mr. Shinn said they had borrowed $400.00 to pay their ae: scribed stock in this Union Grocery Co- Q. Now who did he say? a. He never called whose, his or any one else's. Q. I will ask you did he not say to buy stock for this Grocery, Company? A. He said they had borrowed the money to pay their subscribed stock. q. I ask you, if you don't know that this money went for a bill of shoes and other things? A. I don't know. I aid not buy any goods. Q. I ask you if this very money, if he aid not say, we borrowed this money to buy stock for this Company? A. No,Sir. Q. That has been how long ago? That has been over @ year ago, hasn't it? A. Yee,Sir. Q@. Who was present? A. Mr. Shinn. Q@. Any one else? A. I don't just remember. There was more there, I was at a directors meeting or a stockholders meeting? Q. Which was it? A. I won't say positively. Q. How come you to remember so well about the subscribed stock, more than a year ago, he said something about their subscribed stock you say, why do you remember that? A. The reason I aid remember that, I saw from the way things was going, I seen 4t was going ine hole. I pulled out, slipped out the easiest way I could. Q@. Who 4id you sell to? A. Mr. Sam Wagoner. Q@. You cannot remember the business, save that you were there, you cannot remember a thing about the business you were transactimg, but you oan stress subscribed stock? How is that? @16- ' ’ A. Well I remember what he said-- I don't remember whether we were at the store, but it seems we were at the store-- we were at a stockholders or directors meeting, I don't know which-- we were there at either one of those places. Q. You are not certain of the place-- you are not certein of the amount? A. $400.00 ig the amount. Q. I believe you have got the number-A.I knew that before that and since. Q. That is one thing - Q. All these authorized debts was subscribed stock, I ask you 4f you don't remember this? Q@. Were you at any other meetings? A. Yes,Sir. Q@. I ask you if the amount of the debts was not given out at these other stockholders meetings? A. I don't know-- they were bit-- the amounts of the debts-~ the first I ever knew of that, I knew there had been talk of it-Q.He told you, then you knew? A. I never knew anything about 4t before that. Did not know who borrowed it. Q@. I am talking about the Union Supply Campany-- 414 you know of any debts it owed? A. Ho,Sir, I did not know it. Q@. You were atdirector meeting, 41d you know then it was in bad condition, and you wanted to get out. Q. The Company told them to borrow this gstuff-- $400.00-- got it as borrowed money to pay the subscribed stock? A. I saw thet this money had been going into the bank in one men's | man, and I just got out of it, ase quick as I could. Q@. You got out, sold out lock stock and barrel. Q@. Did Mr. Shénn's and the two Mr. Arthurs signing e note make the company solvent, and is that the reason you got out? A. WNo,That is not the reason. Q. You did not know any debts they owed. A. after I found out about thie money that had been borrowed by them for the Union Grocery Co., I got out of it. that this had been borrowed for the Union Grocery Company wae saddled on it, I got out of it. Q. after you found it out? alGa A. I gaid after I found that this had been borrowed,this $400.00 and this other money had been put in one individuals name, I just “ slipped out of it. Q. What money had been put in the Bank? A. They had been putting money in the Bank at Mooresville. Q. What money? A. I suppose the money that came out of the store. Q. You said you found out-- look over here Mr. Hartsell, what it you said about this debt being saddled on the Grocery Co. I found out about it all right. Who told you? A. I heard it Shrough several. That is why you got out you say “because the Company owed $400 .007 fhat ie the’ reason I got out? The Company, I never knew of Company owing it. Didn't you say you found that out? They tried to claim that the Company owed it but &t did not. Did the Company ever speak to you in its life-- this is @ paper concern 7? Q@. How, listen, have you ever heard that this Company owed the $400.00, you got out about? A. I never would have subscribed anything to it, if I had known they borrowed anything-- Baq. Shinn told me the $400.00 debt was to pay their subscribed stock, besides that I never did hear 4t before-- I have heard that the Company owed it since then. Q@. Since you got out? A. So,I got out before thet. Q@. You 41d not know the Company owed it then? A. after going to Mr. Shinn, I just cleared out, it would have been better for all of them if they had gotten out. Q. But I am trying to get at what your reason was, you 4id not owe 4t anything, why were you afraid when the Compeny’ did not owe anything? A. I just got scared and went out, and got out and the others -18- 4 } would have been better off it all of them had got out. Q. Mr. M.C. Arthure was Secretary and freasurer of the old partnership down there when it was first started, and when it was incorporated he continued on in the same office. A. Don't know anything about it since I quit it. J.A. Chandler, being duly sworn, says: Direct. By Mr. Turlington. Q. Mr. Chandler were you present at the meeting of the stockholders of the Union Grocery & Supply Company when the motion was made to turn its stock ower to Mr. M.C. Arthurs, if he would pay the debts? A. You, Sir. Q. State whether or not Mr. Chandler,. the amount of the indebted- ness of the concern was given out by Mr. Johnson or any one else in that meeting? A. Wo,Sir, they never named that at all. Q. What was said about the condition of the concern? A. They said it was in debt about as much as it was worth. Q. Did you at any time hear Mr. J.C. Shinn and Mr. M.L. Arthurs and Mr. M.C. Arthure or any of them, or all of them, state anything about this $400.00 note, state when it was? A. I heard him last January a year ago. I think it was at the School house, some one asked Mr.Arthumif they had gotten the amount up that they wanted, and he said ,we borrowed $400.00 and took up that stock. Q. Had the meeting been called to order? A. No,Sir, it had not. Q. Just before the meeting was called to order? A .Yes Sir. Q. How, do you know how much stock Mr. M.C. Arthurs and Mr.J.C. Shinn and Mr. M.L. Arthurs voted in those meetings? A. Ho,Sir, I cannot tell you anything about it. Mr. G.S. Chandler,being duly sworn: Direct. By Mr. Caldwell. Q. Mr. Chandler were youpresent at the stockholders meeting of the Union Grocery & Supply Co., at the time the wote was taken to ~19- give the stock to some give the stock to some one who would pay the debts of the concern? A. Yes,Sir. Q. . Was the amount of the indebtedness given out at that time? A. Yes,Sir. Said it was in debt as much as it was worth, and wanted to give it away if some one would pay the debts. Q. Mr. Chandler state whether or not you were present at the first meeting of the stockholders of this corporation? A.Yesa,Sir. Q. How many shares of stock did Mr. J.C. Shinn vote at tht meeting? A. They voted all the shares at that meeting, I think there was $850.00, they claimed $815.00 and voted all but 11 shares that was not paid in. Q. They voted $815.00 Q. How many shares did Mr. Shinn vote? A. 27 shares. Q@. How man y shares 4id4 Mr. M.1. Arrhurs vote? A. 33 shares. Q. State whether or not any one represented M.C. Arthurs, 4i4 any body yote his stock-- Mr. Shinn voted it for him once. Q. How many was voted for him? A. 27 shares. Q. Now, Mr. Chandler 40 you know anything about thie note-- this $400.00 debt aid you ever hear Mr. Comer Arthurs. A. After Mr. Johnson had gone in as President, I asked how much the @ore owed, he said about $160.00, I asked him was that all, and he eaid Yes, He said there was a note down here in the Bank that Mr. Shinn , my father and myself will have to pay. Cross-Examination. Mr. Grier. Q. When was that Mr. Chandler? A. Last February a year ago. Q. That was who? 4M.C. Arthurs told you they owed $160,007 A. 4M.C. Aathure told me they owed just about $160.00, and thas there was a note at the Merchant's & Farmer's Bank, that his father Mr. Shinn and he would have to pay. Q@. Did he tell jou how much it was? A. No,Sir, he did not say how much it was. Q@. Mr. Chandler, I will ask you about how many shares of stodk gia was voted by M.C. ,M.L. Arthurs and Mr. Shinn. I ask you if all the subscribed stock, the full amount of subscribed stock was not voted without any reference to the 11 shares not being paid for. &. Said it had been paid in all but the 11 shares. Q. $815.00 had been paid in.? A. The last meeting he called, there was not but $415.00 paid in > There was a discussion-- Q. By whom? A. Joe Deal, no sir; they just allowed him to vote the shares that was paid in. Q. When was that the first meeting? A. Yes ,Sir. Q. How many shares did Joe have? A. I think he had two, that he had tow that was paid for and two that he had not paid for, and Mr. Shinn told him he could not vote but two. Q. When was it? A. October ,1909. Q. You say the last meeting that you attended » when this stock of goods was authorized to be sold, it was said that the debts of the corporation amounted to about as much as it was worth, and whoever would take the assets and pay the debts could have it and wind dt up? A. Yes,Sir. Q. Was that a full meeting? A. I think the majority of them were there. How many votes did Mr. Shinn cast at that time? He cas® five. How many did M.l. Arthure cast? A. Eight. How many did M.C. Arthure cast? A. Five. Mr. M.L. Arthurs said I voted more than any of you, he said , Zhat was the amount of shares that they said they had paid in? A. The claimed by voting at first that they had paid it all in. Q. I matbelhing about what they claim , what was the stock they had paid in? A. Five and eight shares. They had not paid the balance for which they had subscribed. Q. Who was Secretary and Treasurer of the Union Grocery & Supply Co. A. Mr. Comer Arthurs. Q. Was he there? A. He never was in a meeting that I was there. -21- At what bank did they do business? I don't know I never seen any account-@.Did you ever inquire? I never did. It was satisfectory then to you? You are the father of the young gentleman just on the stand? Yes,Sir. You are one of the plaintiffs’ in this proceeding? A. Yes ,cir.: Who are the others? I don't know several of then. Is G. Sherwood Houston, J.-A. Chandler, J.L. Cloaninger? He is one? A. Yes,Sir. § .B. 0. Cash, J.H. Cook, J.C. Houston, and Geo. L. Houston? A. I suppose they are. Re-Direct By Mr. Caldwell. Q. At this meeting Mr. Chandler where Mr. Shinn voted five yotes and Mr. li.L. Arthurs eight and Mr. M. C. Arthurs five-- they had voted big numbers up tc that time? 4. Yes,Sir. Q. Mr. Chandler I understodd you to say at this meeting where this sale was authorised, that there was no statement submitted as to the amount of the {ndebtedness? No,Sir, I don't know if there was, I never heard it. Except the statement that it wae in bed shape? A. Yes,Sir. ” Was that the directors or the etockholders meeting? That was a stockholders meeting. I think they had a directors meeting after that. DAa@ the stockholders vote traneferring the stock of goods under this representetion, without any detailed account of the indebtedness of the concern? A. Yes,Sir. Plaintiff Rests. ; ‘ : Walter Simpson, witness for the @efendant, being duly sworn, says: Direct. By Mr. Grier. Q. Mr. Simpson you have no interest in this matter ?A. No,Sir. Q. You were a stockholder at one time of the Uniatn.Grocery & Supply Co? A. Yes,Sir. Q. Were you present at the first meeting? A. Yes,Sir. Q. ‘ Before it was even organized? Before this corporation was organized? Before the charter came back? A. Yes,Sir. Q. Was it about October, 19097 A. I don't recollect no dates. Q. Mow, you can gust go ahead in your own way,Mr. Simpson, and tell the Court what was said and done about this borrowed money? Plaintiff objects. Ap,¢ «thi -@ A. There was a little meeting there at the school house, after th Farmers Union meeting. Q. Mow, go ahead Mr. Simpson state what you know? A. Mr. Shinn said they mete needing some more money at the store up there, said he thought he could get it if they wanted it, and if there was no objection he would see about getting it. Mr.Joe Deal told him to go ahead and get it as far as he was concerned, Q. What else was said? A. I cannot tell you, so much, I could not tell you all of it. Q. That was the sum and substance of it? A. They needed more money in the business of the Company. Q. What were they talking about? A. They were talking about running that store up there. Q. Who? A. The Stockholders. Q. Mow many stockholders were there that night? Stockholders of the Union Grocery Co? (You mean perspective?) Q. Was the subscription already taken up for this concern? A. That is what we were talking about. Q . Now, I want to make this clear, had you subscribed stock in this proposed Company before that? A. Yes,Sir. Had you signed up for it? A. Yes,Sir. Had the charter been sent off? A. I don't know about that. Had it been signed up there? There had been a subscription list you say for the proposed Gonm- pany, which was afterwards incorporated? A. Yes,Sir. Q Now, go ahead and state what was said by these men, and wnat was done with reference to borrowing this money? A. They told Mr. Shinn to go ahead and see if they can get the money and report at the next meeting, that is the best of my recollection. Q. Were you ever present at any other stockholders meeting after that when the borrowed money was mentioned? A. Iwas at a couple of meetings up there at the store. Q. Meeting of whom? A. I suppase they were stockholders. I was not there at the open- ing of the meetings. Q. Well the parties you saw there-- that were present, did you recognize them? A. They were all men who were interested in the Bompany. Q. What place of business were they at? A. Union Grocery Company. Q. Were they discussing the affairs of the Company? A. Yes,Sir. Q. State what was said about this borrowed money, from any report or whatever was done? Plaintiff objects. sre. lek A. I heard them say up there at some of the meetings that this $400.00 had been borrowed? By the Court: Heard who say? A. Some of the members. Heard Mr. Shinn for one when he was presiding over the meeting. Q. Mr. Shinn you say you heard him mention this at a stockholders meeting? A. Yes,Sir. Q. Mow, how 4id he speak of it? How was it spoken of? Whose debt wae it? Plaintiff objects . Q. Give the substance of what was said and done? A. I gaid in the meting I was in, it seemed it was the debt of the store. Q@. Do you know anythin«< else about thie transaction, this debt? A. That is all I know. Cross-Examination. By Mr. Turlington Q. Did Mr, Shinn vote 27 shares ? A. I don't know anything about it. -24- ‘ Q. Do you know hor many Mr. Comer setae ‘votes, or Mr. M.L. Arthurs? &. Don't know how many any of them voted, but what I voted myself, Now, I ask you to refresh you Mr. Simpson, if you did not tell D. S. Chandler, that they had been voting 25, 33, and 27 shares? Wo,Sis I did not. o Before the charter was applied for and before it was received, Simpson, you said they were needing some more money about the store up there, and Mr. Shinn said he knew where it could be had, A. He said they were needing it about the store,Yes, Sir. Q@. You are not a stockholder, Mr. Grier ask you were you interested in this? A. No,Sir, I am not now. Jake C. Shinn,dr., being auly sworn, says: Direct. By Mr. Grier. Q@. Mr. Shinn you are a stockholder in the Union Grocery Co? A.Yes, Sir. Q. What kin are you to Mr. J.C. Shinn? A. I am a son of his. Q. Were you present at the meetingof the stockholder of the proposed Union Grocery & Supply Co.,, after the subscription of the stock had been taken, and before the charter had gotten back, were you present? A. Yee,Sir, I wae at several stockholders meetings. Q. Well take the first? A. I don't remember the date. Q. Was it before or after the charter had come back. A. Why there was one before and one afterwards too. Q. What was seid and done by the stockholders with reference to borrowing the money, if anything, or in reference to authorizing an arrangement to be made to borrow a sum of money of the Merchants and Farmers Bank? for the Corporation. Plaintiff objects. Prenuticd Q@. Who was authorised to see about it and the amount desired and all about it? &. The first I heard of it was at the Farmers Union Meeting, jest after it closed-- down at the school house-- Mr. J.C . Shinn or Gomer Arthurs said something about J.C. Shinn seeing the Merchants and Farmers Bank and see about making arrangements-~ see if they c ~& could get it. Q. How much was it they were wanting? A. $400.00 Q. Were you at another meeting where it was spoken of? A. Yes,Sir. What wes said about it? He let them know that they could get it, and they all agreed him to go ahead and borrow it. Was that done Mr. Shinn, did he go ahead and get this money? Yes,Sir. How much? A. $400.00 Do you know how the note was made? A- No,Sir, Imver seen that. Did you ever hear it spoken of at any other meeting? Yes,Sir, always put in at the stockholders meeting. How was it spoken of, what debt? It was always spoken of as a debt of the Company? A.Yes,Sir. Stand aside. J.C. Shinn,Sr., being duly sworn, says: Direct. By Mri Grier. Q. Mr. Shinn was there a concern & partnership doing business prior to the 15th or 16th day of October, 1909, known as the Union Grocery Co., or the Union Grocery & Supply Co.? A. The name first settled on was the partnership store, and some 4ifftoulty got in the way. Q. Were you interested in that? A. Yese,Sir,I was. Q. Was there later e corporation? A. Yes,Sir, I told them I would invest more money in it if they would incorporate so that it would not make any one man liable fo the debts. QQ. Who was Secretary a 4 Treasurer of the o14 company’ A. 4.C. Arthurs. Q. The corporation was organised under the name of Union Grocery & Supply Company? A. Yes, Sir. Q. ow, who is Seoretary and Treasurer of that? A. M.C. Arthurs. Q. Where did you do yaur banking? Merchants and Farmers Bank at Mooresille. Q. Was the account changed? A. We never even changed the books» only changed the name. Q. When the new corporation was formed what became of the old partnership business? 4. That all went along in-the same people in the old partnership as in the new corporation, took over the assets. Q. Now, Mr. Shinn were youpresent at the first meeting of the stockholders of the corporation before this charter had been secured? A. I was. Q. Tell the Court what if anything was said and done by the stock holders of the proposed corporation, with reference to borrowing any money, and all about it, at that first meeting ? Plaintiff objects. &. There was a Farmers Union Meeting at the School House-~ there was @ good many stockholders there, I could not say how many of the stockholders-- Mr. Arthurs said to me that they needed some more money up there at the store, I think I told them there that sight if they wanted the money I thought I knew where I could get it, I knew if I could not get it one place, I could another-- they said go ahead and see what you can do, where you can find it. I found the money at the Merchants and Yarmers Bank, at Mooresville, and came back and reported to them. Q. Howmuch 4i4 they want? A. $400.00 Q. Did you report back to it? A. I reported that we could get the money at the Merchants and Farmers Bank, at 6 per cent interest, payable in advance. Q. What did they say do? A. They said for me to go ahead and get it. I said I could not get it on a note of the corporation, I said we will have to give an individual note. M.C. Arthurs as principal, and me and Mr. M.L. arthurs endorsers to the note , that we could get it that way. Q. Why could not the Company get it? -26- ad . / ‘ (A. *Beeause the papers of tncorporation had not been returned yet. Q. Did you do that? A. We did. | Q. Were you at any of the stockholders meetings after that? 4. I suppose I have been to about all of them. 7 Q. Well, at these stockholders meetings what was said and done with reference to the indebtedness of the concern? A. Well at our annual meetings, the indebtedness of the concern was always made known, how much it owed, and also the inventory, how much the thing had you know. Q. It was also told the stockholders about the $400.00. A. Had not been paid, stil] handing on us yet. Q. What was that money used for? A. We left it there to the creidt of the Union Grocery Sapply Company, it was checked out for goods. Q. Who paid the interest on that note? A. Union Grocery & Supply Co. Q. Has the note been renewed from time to time? A. It has. Q. Eaeh time who paid the interest on it? A. The Union Grocery & Supply Co, except the last time. We carried the note just like it was. Arthurs has paid it out of his own money, because under the contract he was to pay the note. Q. The note has been renewed onee since then? Ae paid it for the Company. Q. Did you ever change the form of that note? A. No,Sir. Q. Why was it not changed? A. Mr. Mille never called our attention to it, and we never thought of it. Rs. Mille usually filled it our and mailed it to Mr. Arthurs, Secretary, and he fetched it to me for me to endorse. Q. Mr. Shinn 41d you borrow that money individually? A. No,Sir,I aid het. Q@. Did you use one cent of that money for indivaidual purposes? A. No,Sir. Q. Did Mr. M.L. Arthurs? A. Ho,Sir. Q. Did Mr. M.C. Arthurs? A. No,Sir, he did not. Q. Did you pay for any of your stock with that borrowed money? I paid for it with my own money. -87- Do you know how Mr. M.L. “arthurs paid for his stock? He borrowed part of it. Gus Johnson paid part of it for him. Did he use any of this money? No,Sir, he neverdid anything with it, except sign that note. How many shares in this Company have you? A. I have five shares. Q. Any more issued to you? A. No,Sir. a) Were they issued to you? A. I can tell by referring to my check, I have in my pocket. &. My shares were issued to me 11-13-1909. That is when I paid for the stock, that is the first receipt, that is the first stock company, that is the last receipt I paid in, that is First National Bank of Mooresville. Defendant offers the following-- One share in a joint stock company, to be named Union Grocery Co., as Ostwalts ,.C . Marked Exhibit "E". Check offered in evidence by defendant marked Exhibit “F". Wext evidence - stub certificate #5, of Stub Book-- 5 shares of stock issued to J.C. Shinn- 11-13-09. Q. Now, Mr. Shinn something has been said about this report of this stock being sold at the stockholders meeting, were you present there? A. I Was. Q. How many meetings 4id you have with reference to that? A. We had two meetings. Q. Did the directors also have a meeting in addition to the two stockholders meetings? A. The stockholder had the first meeting - that they had enough to pay it off - decided to call the stockholders to find out what they wanted to do. Directors had the first meeting in January, elon the firet of Yamuary, and then in a few days Arthurs Seore- tary & Treasurer notified all the stockholders, and they all cam together. &. To vote on that stock and see what we would do with it, Q. Now, at that time what atatement,if any,was made as to the liabilities and assets? A. Well,Mr. Johnson stated &t was in bad -28- shape- They were owing the $400.00 to the Merchants and Farmers Bank, and my recollection is they owed a balance of $22.00 to some Implement Company, and also that $16.00 debt. Q. What statement was made about the condition of affairs at the time?&hs A. They were in bad shape-- they were indebted about $446.00 or $456.00 or something. There had been some discussion between them about buying the stock-&f they could find any one in this first directors meeting, if they could find any one to pay those debts they would give the store to them. Plaintiff Objects. Q. That seems to be a year afterwards. «- You are testifying Mr. Shinn, about what was said and done at the stockholders meeting with reference to---- Mr. Shinn what took plece immediately before the stockholders? A. That was last January. Pleintiff objects. &. That wae a directors meeting the first of January this year? Plaintiff objects. Q. Ho evidence concerning a directors meeting. Objected to by the plaintiff, unless the minutes of the meeting are produced. Q. Go ahead Mr. Shinn-- they had 6 directors meeting there that Jamary, Directors meeting was called by the President, and we got notice through the Secretary. Plaintiff objects. Q.wWere there any minutes kept of these various meetings? A. No,Sir. Q. Go ahead. Objection by plaintiff to this evidence. A. They had 6 meeting called by the president, and we had been notified by the Secretery, at that time it was aisonssed as to the best plan to take to pay those debts they were owing. Q. What debts? A. The $400.00 and the amount $22.00 balance due on a note, and the $16.00 reported to the meeting-- The $22.00 that was due at the First National Bank where there was some money borrowed; there was the clerk hire going to Mr. Beulah Johngon $16.00, we agreed that any man or some of us would take the store and pay the debts could have it, Some of the directors objected to that, and some in for it, that we have nothing to pay, and give the man the stock that would do it. We had agreed that we would call a stockholders meeting next time, and let all the stockholders vote as they pleased, we did that. Was there any minutes of the stockholders meeting? I kept the initiale of the man that voted. Where are they: A. They are there on the table. No body else did and I did. Plaintiff objects. Q. Was the vote teken?A. Yes, Sir. Q. Under whose authority was it taken; Was any body authorised to set down the result of that vote? Plaintiff objects. A. There was. Q. Who? A. Me. Q. Have you anything in your hands which show the result af that? A. Yes Sir, this is my own figures and writing. Q. What does it show? A. It shows that 37 in favor and 22 ageinst it. There was 47 votes , I had voted M.C. Arthurs stock-- they raised some question about it and it left 37 then to give the stock to any man that would pay the debts of the concern, and 22 wotees againet it. By voting M.C. Arthurs stock there was 47 for it, they raised some kick about it, so that left 37 votes. Q. Where was M.C. Arthurs? A. He ha@ to attend to the store. Plaintiff? objects. Se Q. That proposal to give the stock to any man that would pay the debts of the corporation giving 37 for it and 22 votes against it. Plaintiff objects. Exhibit. "G". Q. Mr. Shinn in consequence of this vote that you have detailed here, was the stock afterwards sold to any body? Objection by plaintiff. A. It was assigned over to M.C. Arthurs. Q. This instrument of writing signed over that day? Look at this? A. Yes,Sir, this is the instrument of writing assigned to him? Objection by the plaintiff. North Carolina Iredell County For value received the Union Grocery Supply Company hereby sells, conveys and delivers to M.C. Arthurs all and singular its stock of goods, wares and merchandise, choges in action, money on hand and in bank, accounts and 1 bales of cotton at Union Grocery Supply Co. By A.M. Johngon, President. J.C. Shinn Director S.A. Wagoner Director. Witness W.S. Arthurs. and duly probated. Exhibit "H". Objeoted to by plaintiff. brt>uthedk Q. Did you hear the witness Mr. Eli Hartsell said about the $400.00-~ state whether or not you got thet $400.00 to pay for subsc. ibed stock, if you said it. A. I neverhad any such talk with Eli Harteell. Q. Did you ever make any statement to him or any body else about getting the $400.00 to pay for subscribed stock? A. I 444 not. Q. -~31- Q. Did any body ask you-- had you gotten up the most of the money you wanted at the meeting-- Did you say to him that they hhad paid you, or they had borrowed the money to pay it up. A. WNo,Sir, I did not tell him any such stuff as that. Q. Without being able to name the witness, it sesms to me that some other witness made some statement-- did you make any statement to any of the witnesses, Mr, Chandler, Mr. Houston that you, and Mr. arthurs, that you and these other gentlemen had borrowed this money to pay for the stock sub- soribed, or anything of that kind? A . MNo,Sir, I did not. It hab been for another matter-- for the Union Grocery @ Supply Company, for a Bill of Shoes that was bought before the money was borrowed, a few days after that note was signed. Q. Did Mr. Houston make a statement about this debt at the last meeting? A. Make any statement about this #400.00, when it was mde known that the debt was due, Sherwood Houston said it should be paid. Q. Houston said it should be paid? A. Yes,Sir, thet it was an honest debt ,as well ae I oan recolleot ,that at should be paid . Q. Was thet the stockholders or at the Directors meeting? A. That was at the directors meeting. Plaintiff objects. Cross-Examination By Mr. Caldwell. Q. Mr. Shinn you say at the time the debt was first made known, thie oleaim against the concer, Mr. Houston said if it wae an honest debt it ought to be paid. &. What 41d you say? Q. You were the first an that signed the application here for a charter? A. I don't remember whether I was or not. Q. Ien't your name J.C, Shinn, this is it. Q@. Did you subscribe for 27 shares? -32- A. I subscribed for 5 shares. Q. Mr. Shinn did you not subscribe for 27 shares as your charter shows here? A. I subscribed for five shares . Q. Well look at that record? Says here that you subscribed and peid for 27 shares, did you or did you not? Look at the Record ,Mr. Shinn. A. I subscribed for five shares and paid for five. Q. I ask you if you did not go before the Clerk of the Superior Court and swear to this-- witness our hands and seals this the 14th day of October,1909, in the presence of Mr. M.C. Arthurs, saying herein you had 27 shares of stock marked opposite your name, did you swear to it, Did you? Q. How many shares did Mr. M. L. Arthurs subscribe for? A. I don't recollect ,sir. Q How much was paid in Mr. Shinn? A. There was $415.00 psid in at that time,I think . Q. How much has ever been peid in? A. $815.00 @. How much has ever been paid in?$415.00 with the borrowed money $816.00, I think. Q. You made that report to the Secretary of State $815.00, paid in cash. A. I don't remember as I did. Q. Annual statement by a Domestie Corporation. The corporation cbove named ,organized and registered under the laws of the State of North Carolina, does hereby make the following statement with the provisions of Sec. 1162 of the Revieal of 1905, as amended by Chapter 944,Public Laws of 1907. Name of Corporation Union Grocery & Supply Co. Location of the principal office is at Troutmens,N.C. R.F.D.#2 and M.C. Arthure is the agent upon whom process may be served. Third: The character of the business is retail store, Fourth: The amognt of authorised cepital stock $25,000.00, the amount sotually issued and outstanding is $815.00-- -33 | $815.00 paid in cash and by purchase of property, etc., $815.00. The name of the president J.C. Shinn, M.C. Arthurs, Secretary+r & Treasurer, that was made on the 28th day of October ,1910, is that correct. Did youmake that report to the Secretary 7 of State. A. I have no recollection of the exact amount. Q. When you made the report when you reported it at that time was it correct? A. ves, 817. Q. There was $415.00 paid in as stock and the $400.00 was borrowed was paid in. Q@. I ask you had it been paid in as stock? A. Had been borrowed to buy goods with. Q. I ask you the $815.00 was paid in, you testified a moment a go that $415.00 was paid in in addition to the $400.00 borpowed from the Bank, did you not say that? A. Yes,Sir. Q. WAll you stick to that , Mr. Shinn the $815.00 being paid in in cash of that $815.00 then $415.00 of it was money that you borrowed from the Bank of Mooresville, and the other $415.00 was the payments made by other people here wasn't it? A. By myself and other people. Q. Mow, I ask you if you can count up the number of shares that were paid in, and subtsract it from thie amount, if it don't leave you and the Arthurs the amount we are telking about? A. WNo,Sir. Q. Mell how much difference doos it make? A. I don't know. Q. You paid in 5 shares did you not? A. Yes,Sir. Q. You state you paid in five shares. Q. What did Mr. M.L. Arthurs pay in? A. I don't know. Q. Were you president of the concern? A. Yes,Sir. Q. Give you how much? I ask you how much there was of the $815.00 money paid in shares? A. I got it off the books,if I aid. Q. Was that the book where the subscription was made? Q@. Wow, I ask you Mr. Shinn of that $815.00 as subscribed stock if it does not embrace your 27 shares; M.C. Arthurs 27; -34- and M.L. Arthurs 33 shares, they are not paid in? A. I don't know. Q. Well now, at the time you reorganized did you have the necessary amount subscribed and paid in, that you intended to atart business on? A. No,Sir, we did not. Q. Not without borpowing that $400.00 Did you have that emount at the time you incorporated. We had it without borrowing that $400.00. Was that borrowed to make good those shares? It was borrowed to pay for goods, How do you reconcile that,Mr. Shinn? Well the money was borrowed to buy goods with. Q. Why did you need to incorporate, Dont you know you had to have a specified amount in order to enable you to start your business under the charter? Q. Do you know how that was? A. I told you how it was. Q. I ask you if you gentlemen did nnot say the amount of capital stock with which said corporation will commence business is $815.00? Well did you say that? Q. ow, I ask you if that $400.00 was not paid in ana certified as cash , subscribed stock in order to enable you to to start? A. I cannot say that it was. Q- Do you swear that it was not? A. I cannot , I don't know that. Q. If this note in the Merchants & Farmers Bank for something like three years? A. Will be three years this coming fall. Q- You and the two Mr. agthurs have gone ever six months and renewed that note in your individual capacity at that Bank have you not? A. Yes,Sir, we have. Q. Just left it standing eae an individual note? A. Yes,Sir. We Signed the note the first time, and the note was sent out just like it was every time . -35- | | 0 Q. You tell the Court Mr. Shinn that M.C. Arthurs and Mr. M.L. Arthurs and you went in there and signed the note for $400.00 making you responsible here- it was for a dif- ferent concern and you got no profit out of it? A. Yes,Sir, we did do that. You have renewed it every six months? Yes,Sir, we have. Is Mr . A. M. Johnson financial responsible? I could not say. Is Mr. W. J. Campbell financially responsible? I suppose he is. Is Mr. J.". Arthurs financially responsible? He was at one time. T.L. Mclain financially responsible? I don't know whether he was or not. What about D.S. Chandler, is he responsible? I think so. S.A. Wagoner responsible’? I think so. You think these other men responsible for their obligations yet you three gentlemen have gone on and made your individual note without any relief to you at ell, or asking them to come to your aid or assistance on that note? Q. I believe at the time, before the charter was applied for and drawn, when it was a partnership, the store was in « tight placed and needed money but at the time they were getting up this subscribed stock ,the truth of it was they had been over drawing your account every month? A. Wo,Sir. Q. Don't you know there was an over draft in Auguset?A.No,Sir, I don't. Q. Don't you know there was an over draft in September? A. No,S8ir. If you subscribed for £2 shares , you newer paid for of them? I never paid for but five yars. That would leave 22 shares at $5.00 per shares ,$110.00. Re-Direct. By Mr. Grier. Q. Paid the net capital of this Company-- have not paid the full amount subscribed? A. The books show have not paid the full amount subscribed-- they have never éaken it up but have subscribed for it. Q. About how much of that? A. Half dozen or such a matter. I don't know how much the books would show. Q. Whose hand writing was the report to the corporation Commissiom? A. J.B. Armfield was the man we got to.fi11 it out. Q. Was the report made for the purpose of taxation? A. It was some State law-- that report came and we did not understand how to fill it out and got Mr. Armfield to fill it out. Re-- Cross-Examination. By Mr. Caldwell Q. Mr. Shinn ,after you deduct the #400.00 that you say you got-- not included in that-- and daduct then any amonnt not paid, please tell us where you got the $415.007 A. I cannot tell you without taking the checks and counting it. M.C. Arthure,being duly sworn, says. Direct; By Mr.armfield. Q@. You name is M.C. Arthurs ? A. Yes ,Sir. -Q. You were one of the officers, Secretary and Treasurer of the Company? A. Yee,Sir. Q@. You were Secretary and Treasurere.-~- Objection Q. Mr. Arthurs were you present at the firet meeting that has been spoken of by some of the witnesses? A. Yee,Sir, I think I was. Q. Bo you remember what was suid? A.The School House meeting? A. Yes,Sir. -37- Q. That the meeting that was spoken of as being held after the Farmer's Unicn Meeting? A. Yes,Sir. Q. What if anything was said with reference to borrowing . money? Objection. 2. Were there any minutes mede of that meeting? A. No,Sir. @. There had been & good many men coming to me -wanting me to buy a stock of shoes, I did not have the capital to put in a stock of shoes- we needed more money-- capital to do business. Mr. Shinn said he would see if we could borrow some money, if the stockholders were willing. Q. Were the majority of the stockholders there that night? A. I think the majority of the stockholders were there. Q. Well in consequence-- was anything said at that meeting about the money? A. Wanted $300.00 Or $400.00. Plaintiff objects. Q. In consequence of what you said, was the money borrowed? A. It was. Pleintiff ohjects. Q° Carried by the bank for whom? A. It was money borrowed by the Union Grocery Company. Plaintiff objects. Who got the benefit of the money? A. The Company. The interest paid by whom? A. The Company. How was the first interest paid? A. It was padd by check. When it came due? A. It was renewed. Who puad the interest? when it cume due every six months? _ i paid the interest. How did gou pay it? A. I puid it in checks. Checks on what account? A. On the Union Grocery Company account. Q. Mr. Arthure at any other meeting of the stockholders was any report made of thie debt, this $400.00 debt? 2. It was made ut all of them I think, I was not in the last one? Objection. Q. Were you present ut any other meetings? A. Yes,Sir. -38- It was reported you say at these other meetings? Yes,Sir.all the debts were reported. One witness testified as to what you said, I do not recall who that was, Mr. Chandler who said that at one meeting you made the statement that the debts were only $160.00, and so fer as this $400.00 note was concerned that you , your father and Mr. Shinn had that to pay? A. I never said it. Q@. Did you ever make any statement to him or any other person? A. WNo,Sir. Q. You were not at the meeting when they were discussing this stock of goods? A. I was not present? Objection. Q. Where were you? A. Iwas in the store, the meeting was outside. Q. Did you vote in the meeting? A. lio,Sir, I never voted. Q. Was any of this $400.00 borrowed used by you to pay for your stock, or uny part of it? A. No,Sir, it was not. 2. Was any of it used by your futher or Mr. Shinn in paying for their subscribed stock? A. No,S8tr. @. How did Mr. Shinn pay for his stock-- the etock that was is- sued to him? A. He gave me a check for part of it and money for $5.00. He only took one share when he first subscribed, paid for that once, and for the four shares later on. How did you father pay for the stares he received? He paad me the money for it. Who had the costody of the stoek book? How many shares were iseued to you? AL Five shares. How many to Mr. Shinn? A. Five shares. How many to your father? A. Eight shares. Now, Mr. Arthurs, can you refresh your recollection, since they have gone into it, do you recollect any others who did not pay the full amount of their stock, tell us any other stockholders who subscribed stock and have not paid the full amount? -39- A. F.P. Williams subscribed for two and paid for one;J.M. Deal subscribed for five and paid for two; I subecribed for twenty seven and paid for five; J.%. Arthurs subscribed for five shares and did not pay any; J.L. Cloaninger subscribed for four and paid for one; J... Doowin subscribed for two and padd for one; S.A. Wagoner subscribed for five and paid for three; L.C. Beaver subscribed fa three and paid for one. Q. What was the $400.00 used for-- Look over that month and see? A. Well, part of it was used for the bill of shoes, about $300.00 Q. Who did you get them from? A. Belk Bros. Charlotte, I bought some dry goods from Wallace Bros. also. Cross-Examination. By Mr. Turlington. Q. Now, Mr. Arthurs how much did the stock inventory October, 19,1909. A. I don't know. don't remember. Q. Bive us some idea? A. I think a0 ain close on to a thousand dollars. Q. How much stock d‘d you have in that Company- copartnership? A. I had $25.00 paid in on it. Q. How much did M.L. Arthurs have? A. He had $40.00 Q. How much other stock outside of that? A. I don't just know. $415.00 besides the note that was borrowed. Q. What wae the amouht of the capital stock of the Union Grocery Co., the old partnership? A. I don't remember just what thet was. We started on about $250.00 or $260.00. Q. How much more was paid in? A. I don't just remember. Q. How, on October 15th,1909, how much hed been paid in up to that time? A. 19097 &. Yes,Sir. A. I don't know whether the $415.00 had been paid in at that time? Q. Well the new stock was that much extra? A. Yes,Sir. ~40- Q. When did you buy that bill of shoes? A. I bought them the 18th or 19th ,1 think it was, wast to Charlotte, the 17th or 18th, it was the day after or the day after that-- they got the money from the Bank. Q@. You started on $250.00 worth when ? A. I think that was the first of April,1909. Q. and it inventoried $1000.00 in 1910. Q. How much did it inventory the year before? A. I don't remember how much it was before then. Q@. Now, you mean to tell the Court that you place no more money from that time but you hed made $1070.00, and owed nothing, you mean to tell that? A. When do you mean? A. Up to the time you made your inventory? A. 1910. Q. What had been paid in? A. $415.00 and the $400.00 , but we owed nothing at the time we borrowed this money. Q. You made a report to the Secretery of Stete in 1910? A. Yes,Si Q. You signed it? A. Yes,Sir. Q. You commenced said business on $815.00 paid in on stock? I dant remember how it was. $815.00 was issued did you not say that? I don't remember the amount actually issued and outstanding? That is the amount of stock? You signed that report? Yes, Sir. Before you signed another report in 1911, in which you said amount outstanding and issued was $850.00? A. There had been some more money paid in,Yes , Sir. Q. Well then you again made another statement to the Corpor- ation Commission in 1911, did you not? Did you come up here and make another statment, you swore to that one did you not? A. Yes,Str. Q. You swore the capital stock was $850.00 at that time in 1911? A. Yes,Sir. Q. How much stock was issued? A. There was some stock sold out of the store, paid for out of the store. afin oD Q. How. many shares of stock in money was issued at the time this report was made? A. $415.00 is my recollection. Q. You swore to that did you not? A. Yes,Sir. Q. Now, you swear it was only worth $415.00, which tire are you correct, which time are you correct, when you swore it was $450.00, or now when you swear $415.00, which tire are you cor- rect ? You say some money paid out of the store, you explain, when you swore $450.00 or when you swear now it was $415.00? Q. Well this money was paid in out of that, it was not money paid, why then was $450.00 of that $400.00 was not included in the statement? A. I did not swear to anything. Q. You did not go and swallow something Mr. Armfield prepared without looking at it would you? A. I never looked at it. Q. Now, Mr. Arthurs, why was it you went over Merchants and Farmers Bank, got that note, came back , got Mr. Shinn and Mr. M.L. Arthurs to sign, and sent it back there after this corporation had been commenced, why did you do that, why did you not change it into the name of the Union Grocery Company? A. We thought we would change it. Q. Did you ever ask Mr. Nille whether he would take the Union Grocery Company&és paper? A. He said he would take it. Q. Why did you not get him to do it? A. We just never did it. Q. Why did hou not do it? I don't know whey woe did not. Q. Don't you know as a matter of fact, you, Mr. M.1l. Arkhurs and Mr. Shinn agreed among yourselfes to get the $400.00 on your stock? A. No,Sir. Q. Why wes it you subscribed for twenty seven shares and only paid for five of them? A. Why did those other people subscribe. &. I had a right to subscribe as much as I wanted, I did not write it up. iia. oP” Qi Why did you follow that up and swear to the corporation commission that it had been paid? @. Did you swear that $850.00 had been issued and outstanding? A. That was capital stock, that was amount of cash we had. Q. Did you ever swear it was capital stock-- not certain that the shares had been issued for it, did you swear that? A. I did not swear that the shares had been issued. Q. Why did you swear that they had been issued , outstanding and paid , why did you do that, if that is not so? A. A subscription was not stock then was it? It was not there in the business when this report wes made? Q. Did you issue John Shinn 27 shares and M.L. Arthurs 35 shares, that is what the incorporation says , you certified to it there, that this was paid, aid you not, did you do that when you knew it was not paid? A. I aid not swear to anything I knew was not paid. Q. Now the certifica'e of incorpo: ation calls for $815.00, amount of capital etock, did you not enter anto a contract with it, saying that was the capital and was before and that was done, did you, follow that up, certified that had been done, did you not Mr. Arthurs, certify that this charter had been properly drawn and incorporated? A. Of course, I signed it, Mr. Armfield filled it out and I thought ,Mr. Armfield, knew his business and I don't know as I looked at that? Re-Direct. By Mr. Armfield. Q. I made out the report for you, did you tell me what to put in it? A. I don't know whether I told you or not. Q@. I don't thew whether you recall or not, if you know you can tell, do you know the reason why we did put it in $815.00? A. I don't remember about that. Q@. You have stated to the Court, Mr . Arthurs, you have named 15 share of stock that other people besides your own, some of your friends wanted to buy, besides that your father, and you have and Mr, Shinn. -43- Q# You have stated 15 shares of stock amounting to $75.00 that was subscribed was not paid, I will ask yeu if the 15 shares was included in the report to the Corperation Commission. A. It was not. Re-Cross Examination. By Mr. Turlington Q. There were other people who had not signed that charter who took stock were they not ? A. I don't know as there were. By the Court: Who relieved you from your subscription of capital stock 27 shares? A. That was not assigned me. Q. Whe relieved Mr. Shinn of his? A. Wo one. Q. Who relieved yo r father and these otkaer gentlemen from their subscription of capital etock? A. We one as I know of. Q. Bow, when the stockholders of the corporation, were you or were you not ae member of the old partnership? A. Yes,Sir. Q. Great many of you were? I mean were all of them? Some of the old and some new? A. There might have been. Q. On what Basis was the transfer ef the old concern made te the new -- of the property? A. There wasn't any condition that I know of. Q@. I mean on what basis? You have a partnership doing business, ateek of goods , merchandise, was taken over by the corporation, then on what basis was that done? How was that? A. Why a partnership share of steck was considered a share of steck in the corperation-- considered the same. What was the capital of the old company? I don't remember just what it was. Mr. Chandler had nothing to do with the o14 concern,did he? I doen't knew. Did Houston and Cloaninger? A. I am not sure, doen't know t a. hey 4i Sa Fronie Simpson,being sworn,says. Direct. By Mr. Grier. Q. Your name is Fronie Simpson? A. Yes,Sir. Q. Were you present at the first meeting held at the scahool house when this stere business was called for? Objection. A. Yes,Sir. Q. Tell us what was said and done, if you remember the sub- stance of it? A. It had been reported that they needed some more money at the store to put in a stock of shoes, and Mr. Shinn wae looking areund te see if he could get the money at the bank-- te borrow it. Q. Was that discussed at this meeting you ate talking about? A. Yes,Sir. Q. How did it strike the stockholders that were there? Objection. A. They all seemed to be in favor of it. Theynall seemed te want the money so that they could get the charter. “ao Q. Was anything said by them to Mr. Shinn about it? Did they tell him to do it or not te do it? A. I doen't know as they did tell him to as I ‘2ard of. Q. What was said about it-- It was not a regular meeting? A. It was a meeting to get subscribed stock. &. It was a meeting of all those members who were there after the meting of the Farmers Union? A. Yes,Sir. Q. Were you a stockholder? A. Yes,Sir. Q. Were you present at any meeting after that of the cerporation after it was incorporated? A. I was in and out of the m, I was at most of them. Q. At any of the mectings , you were present, was any report made of the debts of the corperation, what the assets were-- what property -- and what they owed? A. Why no, I was in the Sbdes*ae tne time of the steckheolders meeting, I never heard just what was given out. Q. You were in the store? A. Yes,Sir . I was there during two Airectors meetings. Q. So you were not in any stockholders meeting? A. I was in and out, whenever they would call me for anything. Q. De you know whether there was any report made of those debts te the stockholders? Objection. I cannot say as to that. Did you ever help make an inventory? at the store? Yes, sir. Was this debt included in the inventory? A. Yes. Objection. You were not present at the stockholders meeting? Objection. No,Sir, I was there only as they called me out there. That is ahout all you know? A. Yes,Sir. M.L. Arthurs,being duly sworn,says. Direct. By Mr. Grier. Q. Mr. Arthurs you were one of the stockholders of the defunct Union Grecery & Supply Ce? Objection. A. Yes,Sir. Q. Mr. Arthurs do you remember being present after the sub- scription had been taken ,before the charter was returned? Objection. A. Yes,Sir, we had two or three meetings. Q@? Attended it where? A. Union meeting, -- could get subscription for stock, but ceuld not get the money in, Cemer running the store, he said he just have te have same more money, or quite the busi- ness, then we want to work and did get it. Brother Shinn said well just stick to us, just sorter be patient with me, and he would get the money? Bvery one was there? What did yeu de? A. We went shesad, that was left open te the next meeting, then -46- they all agreed to it and we went ahead and got the money? Q. How much did you get? A. Four Hundred Dollars. Who was it gotten for? Union Grocery Co. At the next meeting what was done about it? All said Mr. Shinn was to go ahead and get the money? Objection. They said go ahexd and get it, what did you all do? What did you all do about getting the money? A. We went ahead and got the money. Mr. Shinn seid we could get the money by three of us signing the note-- we signed the note-- the reason the corporation could not give the note it had not received its charter, and the reason this note has not been changed, Mr. Mills would always make out the renewal and sent it by mail, and we would sign it and return it-- he said it could be changed. Q. Did you all keep any minutes? A. We attended business sorter old fashioned, no minutes, nothing. that ought to be done, except by way of mouth, all brethren in the Unien and everything else at that time. 2. Did you have some other stockholders meetings ,after this money was borrowed? A. Yes,Sir. Q. Was this debt never made known at these various meetings? A. It was made known at every meeting. &. That same debt was for the store and had te be paid. A. Ags well as I can recellect I was at all the meetings, it was right near me. Q. The debts were made known? A. Without a doubt they were. Q. How many shares of stock did you have in the Company? A. I had eight shares, I know I was allewed eight votes in the meetings. Q. Hew many shares did you have? A. Eight. Q. Did you ever vote 33 or 27 shares? A. If there are that many — Imver voted them. ~4§- Q. Pne witness, I don't know who it was said at the first meeting that you voted 33 shares, is that correct? Objection. A. Never voted but eight. Objection. Q. Mr. Arthurs that money that you borrowed down there and signed for is that your note, did you borrow that money individ- ually? Objection. No, sir, I borrowed it for the Company. Objection. Did you berrew it to pay for any of your stock? Bary a cent. Objection. Cross-Examination. By Mr. Caldwell But you did subscribe for 33 share of stock did you not? I reckon it was done. Did you do it? A. No,Sir. Did you authorize it done? A. I might have done that. What did you do that for? I don't know. Signed it did you not? Ne,Sir, I did not. Did. not put M.L. Arthurs, Troutmans,.C. 33 shares? If I did I have forgotten that part of it. Did yeu ever pay for 33 shares? A. No,Sir. You paid for eight shares? A. Yes,Sir,1 did. You and Mr. Shinn and the other Mr. Arthurs, just lacked $345.00 of paying what you subscribed? A. I don't know about that. Q@. Mr. Shinn subscribed for 27 shares, and there was 22 shares that he did not pay for, and M.C. Arthurs said he did not pay fer but five, that left him 22 shares, and you subscribed ,er somebody did for you, 33 shares, and you paid for eight.69 shares at $5.00 a share that makes $345.00, that you all never paid. Q@. Did you know you applied for a charter? A. Yes,Sir, I knew 13 , Q. Did you read that oharter? A. No,sir, I cannet read. Yeu just went on blindly, signed it-- did you know that +o) tne charter must have a capital stock with which it was te cemmence business was $815.00? A. Yes,Sir, I think I did. Q. You heard the capital stock with which you would commence on was $815.00? A. Yes,Sir. Q. That was counted as subscribed? A. We had an amount of $400.00 subscribed before we borrewed that money. Q. You did have as much as $400.00 before you borrowed $400 .00? But you knew you could not commence business until you got $815.00, did you het? A. I did not know it. I don't know very much. Q. Have you not just testified that ypu knew you could not commence business until you had $815.00% A. I heard it. Q. You know that you say you had $400.00 subscribed bat it was not paid in? Now, I ask you if you did not give a note fer $400.00, in order to make up the subsctiptieon list? and 4f Mr. M.C. Abthurs, did not certify to it te the Seeretary of State, that you were commencing business with $615.00, paid up capital? A. That was borrowed for goods. Q@. When you could not commence on less than $615.00, you only had $400.00 sabscribed and paid, how did you get the bal- ance, where did you get it from, wher you did not pay your stock, and your son did not pay for his and Mr. Shinn did not pay, where did you get it, how did you get it? If it was not borrowed from the bank , did the subscribers pau it in? Have you not heard what Mr. Shinn said? A. If this was done, I did not know it. Q. If this $400.00 was borpewed to secure, to apply te your charter, did you not knew it? A. If it was borrowed, it was not stated what it was borrowed for. Q. How did you borrow $400.00 in order to make up $815.00. -49- A. I do not know, I have not got very much sense. Q. You know yourcharter was for $815.00 to commence business, did you say that a while ago? Aa: 2 coke that was required, but did not know whether it was obliged to get it. Q. You said you had $400.00? A. About. Q. Where did you expect to get the balance, knowing that you had to have it? Where did you expect to get it? A. I don't know. What you borrowed was to make it up? A. We had to have goods, that money went for goods. Q. I ask you was the borrowed money checked out by your son, was not for goods already bought? A. No,Sir. Q. I ask you if you did not hear Mr. Mills testify,when he was on the witness stand? Objection. You were a member of the store? A. I was. What was the name of the store? A. Union ‘rocery & Supply Co. They applied to me? A. Who? The whole company. Who was the company first? I was one, my son and Mr. Shinn. - How much 4id you commence that store with? A. $200.00, when we first started. Q- When did you commence it? A. About three or four years back, I do not know exactly. Q. How long had you been running when this inventory was made, when this first one was made for $1000.00? A. It was getting on all right, it made a dividend and the in- ventory showed $1000.00. Q. You started on $200.00 te $300.00? A. Yese,Sir. Q. You did not owe anything then at all? A. I don't know. Q. The truth of it ,you don't know much about it, do you Mr. Arthurs? A. What I know, I know, and what I don't know ,I den*t, I am right there, am sure that is all I knew. oe Q. What became of those 25 shares of stock that you did not pay for? A. I don't khow. Q. Now don't you know it took that to make the $815.00. You sorter sneaked up on the State, told them that you had $815.00 ‘that you had subscribed 33 shares of stock, when you only had eight? A. Somebody told them. Q. Don't it appear in the charter? A. I don't know about that. @. You want to see? A. I have not got my glasses. You can read Mr. Arthurs? I can read printing sometimes. This is printed with a machine? I don't want to see it-- don't want to read it. Your charter wanted to commence business with $615.00, read over here that $815.00 was paid in in cash, and the next year $850.00? A. No,I cannot read that. Q. You don t want to read that do you? A. No,Sir. Mr. Mills ,recalled. By Mr. Grier. . De you know M.1. Arthurs? A. Yes,Sir. Do you know his general character?A. Yes,Sir. What is it? A. Good. De you know N.C. Arthurs? Yes,Sir. Do you know his general character?A. Yes,Sir. What is it?A. Beod. Do you know Mr. J.C. Shinn? A. Yes,Sir. De you know his general character? A. Yes,Sir. What is it? A. Good. Cross-“xamination. By Mr. Caldwell. De you know Mr.D.S. Chandoler?A. Yes Sir. What is his general character? A. It is good. De you know J.A. Chandoler? A. Yee ,Sir. Knew his general character? A. Yes, Sir. What is it?A. Geod. De you know Sherwood Houston? A. Yes, Sir. Know his genemal character? A. Yes Sir. &.What is it? A. tot Bye o I | rm Q- Well, Mr. Mills, in your opinion & man certifying to the Secretary of State, under his hand and seal that $815.00 had been paid in cash, stock of that amount of capital issued, and it would turn out that the time he did that thing, no such thing was true, what effect do you think it would have on your estifiate of his charaster? Defendant Objects. A. Well, I would say a man having full knowledge of the fact would be guilty of misrepresentating, but ie he was laboring under an erroneous impression, as probably these gentlemen were, I de not know whether it would change my opinion of them. I* said if he did not have full knowledge of the facts, as to that, Ido not knea} thee gentlemen had or not. til Defendant Rests. Mr. C.L. Sherrill, being duly sworn, says -- fer the plaintiff: Direct. : By Mr. Turlington Q. Mr. Sherrill,did Mr. Shinn ever selicit yeu to subscribe stock in this Company? A. Yes,Sir. Q. When wee it? A. Winter of 1911. Q. What did he say about the defunct Company at that time? 4. They just sent me a statement ef amount of steck, amount of goeds on hand, that hed been inventeried? Objection. Where is it,Mr. Sherrill? I misplaced it some where. I was laying some papers away my desk, I either put it in there, I was cleaning up. Objection. Q. Mow, Mr. Sherrill, stete whether or not from what was said @8 lead you to belteve what was the stock werth? A. BetwoeM$800.00 or $900.00, profit $175.00. Cress-Bxamination. Atand aside. Plaintiff cleses. North ¢ arolina In the Superier Cotrt Iredell County a arm D .S. Chandler, et al i aaYeno j ORDER APPOINTING RECEIVER. Union Grocery & Supply Co.,] This cause coming on to be heard before Hie Honor W.J- Adams, Judge, upon the whole record in the case, and being heard, and it avpe.ring to the Court that it is necessary to adden t a su agrees ah ce ee for Phe ~~ of Zeta pope’ Aeradon fos yo 9 én nae: It is,therefore, ordered and decreed that W.A. Bristol, be, and he is hereby appointed Supplemental Receiver with the usual powers in such matters. It is further ordered that the said Receiver file with the Clerk of the Court a bond to be approved by the Clerk in the sum of Seven Hundred Schteue., danf obat i c ¢. she mp Low a Pa A io ge ~~ A.2h. enihithioiny . eB AB. epee, [Uctes-< North Carolina, In the Superior Court Iredell County, August Term 1915. D.S.Chandler et al. VBe Union Grocery Supply Company To the Superior Court of Iredell County: The undersigned would respectfully report to the Court that he was appoined suoplemental receiver at the Aug.Term of the Supsrier Ceurt of Iredell County,1914,for the purpose of collecting the mmounts due the above defemdant as found and set out in the report of the Referee heretofore filed in this cause. The undersigned would resvectfully report to the Court further that since his said avpointment he has notified and made demand upon each of the persons found by the Referee to be indebted to the defendant for the payment of said indebtedness,and that up to this time all of said defendants have failed and refued to make payment, Wherefore the undersigned receiver asks that the Court authorise him as receiver of the defendant to bring suit against each of said persons upon such, indebtedness. A Supplemental Receiver a _“ Zz FG i 8 oe o North Carolina, In the Superior Court. Iredell County August Term,1915,. D.S.Chandler et al. VS. Union Grocery Supply Cempany,. This cause coming on to be heard upon the report of the supplemental receiver,and upon consideration of said report,it is ordered by the Court that W.A.Bristol as supplemental receiver of the Union Grocery Supply Company be authorized empowered and instracted to bring suit as receiver upon each and every one of the persons found by the referee in this cause to be indebted to said Union Grocery Supply Company for the purpose of recovering said indebtedness. e (FEE FOR FILING IS $1,—SECTION 1233, THE REVISAL OF 1908.) ANNUAL STATEMENT BY A DOMESTIC CORPORATION. ORGANIZED AND REGISTERED UNDER THE LAWS OF THE STATE OF NORTH CAROLINA. The corporation above named, organized and registered under the Jaws of the State of North Carolina, does hereby make the following statement, in compliance with the provisions of Sec. 1152 of the Revisal of 1905, as amended by Chapter 944, Public Laws 1907: FIRST—The name of the corporation is is the agent upon whom process may be served. THIRD—The character of the business is. The amount actually issued and outstanding is $....850.4.°° io paid in cash and $...850.°° by purchase of property consisting of ...... FIFTH—The names and addresses of all the directors and officers and the term when the office of each expires are as follows: Date or Ex.ecrion NAMES OF DIRECTORS. ADDRESS. on APPOUTTMENT. As MM... Tohnneon Troutwan..B...F..D...82......... SIXTH—The next annual meeting of the stockholders for election of directors is appointed to be held on . - lle aey Jan ith 1912. abbas seyiiieidaanLssiniamaliahitdaialil SEVENTH—The name of the corporation has been at all times displayed at the entrance of its registered office, in this _ State, and the corporation has kept at its registered office in this State a transfer book, in which the transjére@ siook are made, and a stock book, containing the names and addresses of the stockholders and the number of shares held by them respectively, open at all times to the examination of the stockholders, as required by law. Witness our hands, the. 26 day of. Sep _ A. D. 1911. A. M,. Johnson _&. Arthurs mer of Inenranne oF Piled Sep.29,1911. J.Bryan Grim@e; sSecretary of State. nocotlll “S¥SANia¥ed “OO F TIBZEO KW F 9787S fo £18}8109S > Ope ‘sreDIffO ‘S10}98lIC ‘puyorey qwoN fo 8787S ey) fo sme] ey? JepuN pezjuRBI0 116l WOd LNAWALVLIS TVONNV - (FEE FOR FILING IS $1.—SECTION 1233, THE REVISAL OF 1908.) ANNUAL STATEMENT BY A DOMESTIC CORPORATION. Company, / ORGANIZED AND REGISTERED UNDER THE LAWS OF THE STATE OF NORTH CAROLINA. The corporation above named, organized and registered under the laws of the State of North Carolina, does hereby make the following statement, in compliance with the provisions of Sec. 1152 of the Revisal of 1905, as amended by Chapter 944, Public Laws 1907: Troutmen.,.B:C.;... BUF 68. , and is the agent upon whom process may be served. THIRD— The character of the business is..... retail satore FOURTH—The amount of the authorized capital stock is $ 25,000.00 outstanding is $..... 815.00. ...¢ $..815 00 paid in cash and $..= property consisting of FIFTH—The names and addresses of all the directors and officers and the term when the office of each expires are as follows: | Dare or Execrion | T or OR APPOINTMENT. i NAMES OF DIRECTORS ADDRESS. ._Shinn,..President,.. Simpson; director; _sonnaon, do... Overcash, do Sitimr;--"** co aA... Vice-Parsrpewrr..: 2p Vice-Paeamwewr...... SIXTH— The next annual meeting of the stockholders for election of directors is appointed to be held on January 1, 1911 SEVENTH—The name of the corporation has been at all times displayed at the entrance of its registered office, in this State, and the corporation has kept at its registered office in this State a transfer book, in which the transfers of stock are made, and a stock book, containing the names and addresses of the stockholders and the number of shares held by them respectively, open at ail times to the examination of the stockholders, as required by law. Witness our hands, the 28 day of October _ A. D. me#.1910. J. ©. Shinn HOIST YS “S¥SBANINe “OD F TIFZEN HS ‘e7e)5 fo 41e7}8198S ‘290 ‘SI@DI{{O ‘S10}9elIC ‘euyoOreS YON fo 9787S ey) fo sme ey) JepuN peziueBs0 116l WOd LNAWALVLIS TVONNV | OD Cs bin fhe Je I, B. @ on A, nnn Secrelaiy a Yale of the Sale tf. Noth Gatelina, do petely coli Mhe foreguiig ant atached{—? fr tN thee lobe luie afiy eomiberecordiirf thiioffice I Wines Whewif!. Vive hereunto sel my hand antl ufftaed, Myf; baad seal Yoneswn office a. Naleigh, bis — (8 } day of: ) tH Uheyeat PourLovd M01 2 | C | Seowla ty of Male Original Summohs, or o names therein SUID scinas wtis cepunsclihapakthdsanbesdseiiie Sibeiiieashabedeccsedieisiaie castes cbbsoves ‘ Notige, foreach name over one ig same pa Judgment final before Clerk ........ hilecangen ts weevnnes engygeenenene seenes || Judgment in favor of Widow's Year’s Support Docketing same “ (*9PoD aq) Ag pexy sy) “TAD-S1S0) 40 THA a | W900 TAI) “on : \ iii i . + CERTIFICATE OF INCORPORATION OF UNION GROCERY SUPPLY COMPANY. THE UNDERSIGNED, hereby associate themselves together and form a corporation under the laws of the State of North Caro- lina. l. Company. 2. The name of said corporation is Union Grocery Surply The location of its principal office in the State is in Barringer township, Iredell County, near Ostwalt post office, on rural route number 2, from Troutmans, N. C. 5. are as follows: The objects for which said corporation is formed To engage in and do a general mercantile retail business; to buy and sell goods, wares and merchandise, and all kinds of supplies and farm machinery. 4. the corporation is twenty five thousand dollars, divided into five thousand shares of the par value of five dollars each. of capital stock with which said corporation will commence business “Ts Wight hundred and Tifteen dollars. 5. bers for stock, and the follows: J. C. Shinn, - - - L. Arthurs, . P, Williams, . f. Johnson, . Hartsell, . Campbell, I [u Shinn, Jr., Deal, Arthurs, . Beaver, ss 2s. 2 Sar 6S Houston, Houston, vy @ Simpson, number of shares subscribed by each, are as Troutmans, Troutmans, Troutmans, Troutmans, Troutmans, Troutmans, Troutmans, Troutmans, Troutmans, Troutmans, N. C., Mooresville,N.C., Troutmans, N. C., Troutmans, N. C., R.F.D.#2, R.F.D.#2, R.F.D.#2, R.F.D.#1, R.F.D.#2, R.¥.D.#2, R.F.D.#2, R.P.D.#2, R.F.D.#2, R.F.D.#2, R.F.D.#1, R.¥.D.#2, R.F.D.#2, ae ww a ee ee ee ee ee Se ee ee, The amount of the total authorized capital stock of The amount The names and post-office addresses of the subscri- shares. shares. shares. shares. shares. shares. shares. sharea. shares. . shares. shares. share. shares. + Cloaninger, Troutmans, R.F.D.#1, share. Spears, Troutmans, R.F.D.#2, shares. - Houston, Troutmans, N. R.¥.D.#2, share. Arthurs, Troutmans, N. R.F.D.#2, shares. Arthurs, ” Troutmans, N. C., R.F.D.#2, shares. hiTane. Troutmans, R.F.0 #2, shares. ;» Cloaninger, » & Troutnans, XN. R.?.D.#2, shares. Goodman, Troutmans, N. C., R.¥.D.#2, shares. Goodman, < Troutmans, N. C., R.F.D.#2, shares. Hobbs, (ih Mn.) Troutmans, N. C., R.F.D.#1, 3 shares. Wagoner, a Troutmans, N. C., R.F.D.#2, § shares. . Chandler, Troutmans, N. R.F.D.#2, 9 shares. Beaver, ‘i Troutmans, N. C., R.”.D.#2, _ 3 shares. Total, = = = =®163 shares. 6. The neriod limited for the duration of said corpor- shall be thirty years. 7. The stockhdlders shall not be personally liable for the debte of said corporation. 8. No stockholder shall own a controlling interest in paid corporation. ? 9. All. the officers of this corporation shall be elected by a majority of the stockholders present at the annual meeting of said corporation and shall hold their offices for the term of one year, and until their-successors are qualified and elected. Witness our hands and seals, this October 14, 1909. J. ©. Shinn, (Seal) [o7_ Mw. L. Arthurg (Seai) fii aimee : Williams, Seal) £ / . M. Johnson, (Seal) 3 FE. ¥. Hartsell, (Seal) Campbell, (Seal) Shinn, Jr., (Seal) - Deal, (Seal) Arthurs, (Seal) Beaver, (Seal) . Houston, (Seal) . Houston, (Seal) Simpson, (Seal) Cloaninger, (Seal) Spears, (Seal) Nouston, (Seal) Arthur$ (Seal) Witness as to all signatures, ¥. Cc. ArthurS$ North Carolina--Iredell County. The execution of the foregoing certificate of incorpor- ation by 7. “. Shinn, M. L. Arthurs, F. P. Williams, A. M. Johnson, E. F. Hartsell, W. J. Campbell, J. ©. Shinn, Jr., J. MN. Deal, ¥. S. Arthurs, E. %. Beaver, S. 4%. Nouston, G. L. Houston, D. F. Simpson, A. L. Cloaninger, ¥. F. Spears, J. ©. Houston and M. C. Arthurs was this day duly proven before me by the oath and examination, and acknowledgment of yw. C. Arthurs, the subscribing witness there- to, and also one of the signers. Witness my hand and official seal, this October 15th, 1909. (Official Seal) J. A. Hartness, Clerk of the Superior Court of Iredell County. Filed Oct. 16, 1909. J. Bryan Grimes, Secretary of State. » Vx a G. biyon Gunes Sacwluny.of Llaleuf the Sale.of) fel ! Gatoleinu, 0 feely wily Whe foregoing ant adachad [{__------Tnree _(3)------sfredli /lo-be aluie afiy of Me Gellijicale of Juco Gowudtonif a i _____siniion Grocery Supply ~ Company, and lhe frilbaletheteon,ubthesameiaten fiom and compared ud lhe cugind, fled tn thes office ontthe 16th diy ol. 7 bathing, EO AEs, Iya Wines Where Vhavehereunto sel. ny hand and offised Wi oft bead: Yonei office a“. Malet, Mhis 16th day of 5 October, 7 the yeavif. tL 100»: nee Toctela by Jtale ed NOILVUOdHOINI 40 3LVIISI LEI ; t~4 MERCHANTS AND FARMERS BANK, S MOORESVILLE, N. C. ” a In account with TBA CBee MERCHANTS AND FARMERS BANK, MOORESVILLE, In account with L909 10400 Las oe “Ss < 102s7 lo 25 tL \S Go +e VV 4 ye" 22°° \o 30“° ‘a. > eo 4 oe etl ccsty EF? —— J S204 ? — - . . i > ‘ Vey f Af Ove bree ces + © #% OUFPRRE . VIRPWONMOOWM OOUUNKROOO®D OBUNOVWOOOW pa wuu Nr O MORAWP_ROM nNwmonowoowo BONS OWO® Lelel. CK. (tide. os x a 153. 1 6. 12 100 24121. 2 O. 42. 8 2. 5. WWOADOLOWAAAR OnmFf&oOuUdodnoo k ‘COCCOMMOCCCOOCO « COSCOHMNWVOAOCOW -WoOnSoubddOw¥oun DQCHAMYT Vet AM in \ * be ais \OoO NN } UVAMWOO OxrWoo ,O* 00000 ' x f iN nN : Le 25 Bata<e OF NRE DOuw AAMWUAANGTIEOAO. ~ WMhbOwounwaOoOo°o. N OnNOOOCOOOOOO y > | » & ° + ow a} ~ i >» BQ wet enOocro > oouo ne A PAOBNAP * ~ ° oe ee eee — nn ToS Spite QW ga Wd \ dN oy % — uv 4 / 2 0 0 0 3 0 0 é 2 O 6 © SOODUsFAQOoOC0C0CO 5 7. Q 5. 5. 5. 4, 1 9. 2 4, 7. 5. JNgtyty % Wits ¥ e re at Noy / J / 2 (Ie? a x Lr.0 f+ \ WA 4 Oil ge ér~ b-- v my Vn ‘B B Fix deo GF ‘] y FF tik as a OSanian ever | Bit Pace tly meHog /] [7H Co er tenet se ~_ WH Sif = atin eft fermen | Sinw Prey! mauded ere ' } OC olpw Phan . é MK Whar e Bs Ainralek ie ge rk ¥ ; “4 - _— wines bo ak tte iT thes “py ser "4 Chay fe Out debt apt Oink Ras ef an Abb? olt as ar aa ws t Wt ter Hh ‘ - fowy IP bi See poe acted of $s 9 ar Ji ~~ the y Wa j Lethe Goh Be lene heh bro 1 p00 AB Chas db. GWA) . beanies 9 net ge0 Me Quhurc — oz! Ce Sorel ty olt 266+ duel nother © Sera Fic v cE i 3 3 3 i _ 5 j ” 3 NAME M. C. Arthurs,Secy & Treas. Account No. 499 ADDRESS Suzet No. FOL. Desits V Caeptts Batance | Date Ivrem = Fou. Desits CaRrprrs BaLarce "to Ns L348 10¢2 i) "So X60 town | Lud if 198; ” 11998 | 2& 2.7.93) ” 12.73 ‘6 lou u210« £o37 1 G4 > ¥ j 7°74 ' 2959) 2s Susqihev 2.0 “40 . 25544) *! 10 el unig’ {o, (7 37 jF\ ns SHIT, .. HH | 24] 34 La! $1 43:14 : $3. gle “9ee / 4 mn 4 4 It ‘9 aa 90 ha*x Vi Carr te 41 14 fam ay / te w q s/95- nwhel S pave. Y3lolel- in Sam SIMs 13. go® So, leo 2/675, iS geen 4 21h7E 6 2 ~ OY QUA w €O. te Ok. 2619S I OF. SO Is ge SI take Be 14. F420. /SU3y gas4 AID Go tz Hee. ae tis ane & 26 Si > m7 i’ 249 2k m- ae s iii a Jd fer » tt ‘s PPMP if :, ote 2 « £9¢61 er L peers. #H# ww DS EOF ey farf Avo rl ‘SaWig « AL Tb! W794 M9V\S% Sb o! Ob i q ; vwvw £/ 299% | 796 | Poet +€O> Lavy ghee 5 1 *? % kfer é@ ‘SoHm> C/ » ctlen * vo ('ese |; F li! sLt4 +e oF 21% b7VbLSf “bteLl ebot +74) -o 4519/5 | eo) S19 Usite GEL beset pres Enite Bs , CUVELE 49 os oo tsp | PF Ot we veo Lacie ot Pao 7 Mo > Ty, onc “bt 59% (es USE A surgaq 10g s EL ava suasx> A i ZORVIVE SLIGac ssaudqav Ip A949 yh 7) Us awn ‘ ) oy tex 4 Sa q be 7ORME DA MAes g Sf 3e% af nae i otartt U Orr Er el tor Ff a7 ire pea 5 Vv WMP IS 4 AU 104 WL] aivq =—— ‘ON iI33HS ‘ON InnOD0y fife OY i rae Lao hs es a ° Shek ¢ f 2 tore bebo “dere Arr etry (lo, 2 er s , wy 4. Kc con, ie A : _ fF } c v/ tt ( W)) 1 ti, WMAed iF | a4 CW Tee ‘ MooRESVILLE.N.G.., . ULL EF Co. ge OP i ce THe First NATIONAL Bank: : MOORESVILLE,N.C WC. bland - aggerines 5. vue a 3 'PAIE NOV 16 1909 MERCHANTS & FARMERS BANK. mtaG recviile A, 6. ; TOOL O94 44 484 WAM 7 Receiver 1912 ast ot. Fee ae | : a | Sit We eetg ox mee eety 1,1 9 a the BK Meonhey pt ‘mine, ’ ee ee foes, et Rae Ke fisves pCa Aenet_| ny rp aa PO. wrath. ssepa 9 1V | a ae °7 cnet A eke ir, Ee Mae dt fo enc oe Fee AI00 aut fS0e* nalce LF Ke Lire? 876 2 SAG broccy inten 5. . wi TRL oni