monopolize a part of such trade and commerce contrary to the provisions of the act of July 2, 1890, and that further violations of said act in the ways specified or any similar ones be enjoined. 5. That the court adjudge the purchase of coal by the defendant railroad company from others and the sale or transfer of the same to the defendant coal company, or any other party, to be unlawful, and enjoin any such future action. 6. That complainant have such further other and general relief as it may be entitled to.

JOHN B. VREELAND, United States Attorney, District of New Jersey.

GEORGE W. WICKERSHAM,

Attorney General,

JAMES A. FOWLER,

Assistant to the Attorney General.

JAMES C. MCREYNOLDS,

G. CARROLL TODD,

Special Assistants to the Attorney General.

February, 1913.

FORM XVIII.-BILL IN EQUITY FOR APPOINTMENT OF

RECEIVER.

To the Honorable the Judges of the [District] Court of the United States for the District of Delaware:

William Buchanan, a resident and a citizen of the City, County and State of New York, on behalf of himself and all other holders of the income bonds of the defendant corporation who may join herein, brings this his bill of complaint against Bay State Gas Company, a corporation created by and organized and existing under the laws of the State of Delaware, and a resident and citizen of said State and District. And, thereupon, your orator complains and says:

I. The defendant above named was incorporated and created by a special Act of Legislature of the State of Delaware in 1889, under the name of the Peninsular Investment Company; a copy of which Act of Incorporation is hereto annexed, and marked "Exhibit A." Immediately upon the organization of the defendant, its name was changed to Bay State Gas Company. The principal office of the defendant is in the City of Wilmington, in the State of Delaware, and it is a citizen and resident of said city and State. Your orator is a citizen and resident of the City, County and State of New York, and is the owner and holder of $100,000 par value of the income bonds of the defendant company, duly issued on the first day of May, 1899, the total issue thereof being, at their par value, the sum of two million dollars. Said entire issue of two million dollars of income bonds, together with three million dollars, par value, of the capital stock of the defendant company, was issued to one Heman G. Mulock, in consideration of the assignment by said Mulock to the defendant of a certain bond or obliga

tion of the Bay State Gas Company of Massachusetts, for the sum of $4,500,000. A copy of the contract between the defendant and said Mulock is hereto annexed, and marked "Exhibit B."

Said Mulock acted in said transaction as the representative of the Beacon Construction Company. A corporation or a limited partnership organized under the laws of the State of Pennsylvania, of which company one J. Edward Addicks was chairman, and held 14,980 shares out of 15,000 shares, the total number of its capital stock, and your orator subsequently purchased said hundred thousand dollars of bonds from said Beacon Construction Company, which then owned the same; and your orator paid therefor to said company, the sum of $100,000 in cash. A copy of one of said bonds is hereto annexed and marked "Exhibit C."

Said obligation of $4,500,000 was, as the complainant is informed and believes, until its alleged cancellation, as hereinafter mentioned, the only asset of the defendant company of any value, and its only source of income. During the years of 1890, 1891, 1892 and 1893, the defendant received from the Bay State Gas Company of Massachusetts, as interest upon the said bond or obligation, about $1,300,000, and thereupon paid to your orator and others interest upon its said income bonds at the rate of seven per cent. per annum in May, 1890, November, 1891, November, 1892, and April, 1893. Since April, 1893, defendant has paid no interest upon its said income bonds to your orator or other holders thereof. A copy of said bond or obligation for $4,500,000 is hereto annexed and marked "Exhibit D."

II. It is provided in said income bonds, among other things, that the defendant will pay to the bearer or assigns so much interest on said bonds not exceeding seven per cent. in any one year, and not to be cumulative, as the net earnings of the defendant for each fiscal year, ending on the 31st day of December, will pay; and, further, that "such net earnings are to be only part of the income of said company as would be applicable to the payment of dividends on its capital stock, and they shall in all events be reserved and applied exclusively to the payment of said interest before and in preference to any payment on account of any other obligation of the said company disposing of the said net income, the intention of these presents being to make the payment of said interest a first charge or lien upon the said net earnings to the extent aforesaid."

By virtue of said provision the complainant and other holders of said income bonds had and have a specific interest in the net earnings of the defendant, and a right to insist that they shall be applied to the payment, to the extent specified, of interest on said income bonds, and shall not be, directly or indirectly, pledged or incumbered for other purposes. It was and is also the duty of defendant not to contract liabilities nor use nor to dispose of its assets in any such manner as to impair its net earnings, except in the legitimate and honest management of its affairs; but notwithstanding its duty in the premises, the

defendant corporation has assumed obligations for the payment of many hundreds of thousands of dollars annually; without any valuable consideration to itself, and solely for the fraudulent purpose of benefitting certain of its officers in control of its affairs, in connection with certain independent enterprises in which they were and are interested. It has disposed or attempted to dispose of the said $4,500,000 obligation of the Bay State Gas Company of Massachusetts, its principal asset, without any adequate consideration, and for the fraudulent purpose above stated. It has likewise pledged the specific income of property to which it is entitled for the payment of obligations other than its said income bonds, and has fraudulently transferred to one or more of its officers in control of its affairs, assets since acquired of great value, without any adequate consideration, whereby it, the defendant, has been nearly or wholly depleted of its assets, has ceased to receive any considerable income, and has been rendered insolvent. In support of said allegations, the complainant alleges the following facts:

III. Ever since the incorporation of the defendant one J. Edward Addicks has been, and now is, the president of the defendant corporation and one of its directors. During all or most of said period one F. P. Addicks, a brother of said J. Edward Addicks, has been vice-president, treasurer and one of the directors. During the same period, or the greater part thereof, one William H. Miller, the private secretary of said J. Edward Addicks, has been the secretary of said corporation and one of its directors. The capital stock of the defendant was by its Act of incorporation fixed at the sum of $100,000, but was, immediately after its incorporation, increased to $5,000,000, of which $3,000,000 was issued to said Beacon Construction Company, of which said Addicks was then chairman and holder of substantially all its capital stock, in part payment of said obligation for $4,500,000. The balance of the $2,000,000 of its stock was issued to said J. Edward Addicks, or his representatives, although, as complainant is informed and believes, no real consideration was ever paid therefor. Subsequently, in 1894, said Addicks, fearing lest he might lose control of the defendant corporation by reason of a large part of said stock having previously been sold to independent parties, caused the capital of the defendant to be increased to $15,000,000. Said J. Edward Addicks caused said increase to be made solely for the purpose of retaining control of the defendant corporation. A sufficient amount of said new stock to enable him to remain in control was issued to him or his representatives or associates without any real consideration therefor; and said issue was fraudulent and in violation of the charter of said company, which provided that all new stock should be offered to existing stockholders in the first instance, which was not in fact done. By virtue of his control of the capital stock said J. Edward Addicks has always named the directors and officers of the defendant company and directed its affairs, and none of the officers or directors of said company have ever acted as such independently, but they and each of them have always acted as officers and directors of defendant solely as the creatures of said J. Edward Addicks.

Prior to or early in 1889, as appears by the agreement next herein referred to, said J. Edward Addicks, together with one W. E. L. Dillaway, who was the attorney of said Addicks, acquired the ownership of the entire capital stock of the Boston Gas Light Company, of the Roxbury Gas Light Company, of the South Boston Gas Light Company, and of the Bay State Gas Company, of Massachusetts, all of which were and are corporations organized under the laws of the State of Massachu setts, and engaged in the manufacture and sale of gas in the city of Boston. On the 16th day of February, 1889, said Addicks caused to be organized under the general laws of the State of New Jersey, a corporation called the Bay State Gas Company, with a capital of one million dollars. Thereupon said Bay State Gas Company of New Jersey issued its negotiable bonds to the amount of sixteen millions of dollars, of which twelve millions of dollars were and are designated as United Gas bonds, second series; and said Addicks and the said Dillaway thereupon assigned to said Bay State Gas Company of New Jersey, subject to the agreements hereinafter mentioned all their interest and the interest of each of them in the capital stock of the above-mentioned Boston gas companies in exchange for seven millions of dollars in the amount of the first series of said bonds of the Bay State Gas Company of New Jersey, and three millions of dollars of bonds of said company, second series, and its entire capital stock of one million dollars. By two agreements similar in terms, dated January 1, 1889, between said J. Edward Addicks, said W. E. L. Dillaway, said Bay State Gas Company of New Jersey, and the Mercantile Trust Company of the city of New York, a New York corporation, of one of which agreements a copy is hereto annexed marked "Exhibit E," it was provided, among other things, that as security for the payment of said bonds of the Bay State Gas Company of New Jersey, the entire capital stock of the said four Boston corporations so transferred to the Bay State Gas Company of New Jersey should be issued in the name of the said Mercantile Trust Company, as trustee, and deposited with it as security for the payment of said bonds, as aforesaid. In and by said agreements it was provided, among other things, that said Mercantile Trust Company should, at all stockholders' meetings of the said Boston gas companies, vote upon the stock for such persons or directors of said Boston gas companies as the Bay State Gas Company of New Jersey should direct. It was also therein provided that the said Mercantile Trust Company, as trustee, should collect the dividends upon the stock of said Boston gas companies, as the same should be paid, and should apply the same to the payment of its compensation for services in the execution of the trusts declared by said agreements, and for its necessary expenses in and about the same; to the payment of all taxes which might be lawfully levied or assessed upon it by reason of its ownership of said stocks; to the payment of interest upon the bonds of said first and second series as the same should accrue, and to the creation, by installments, of a sinking fund, as provided in said trust agreements; and that the surplus, if any, should be paid over to the Bay State Gas Company

of New Jersey. The par value of the stock of said Boston gas companies so transferred to said Bay State Gas Company of New Jersey in exchange for said ten millions of dollars of its negotiable bonds, and one million dollars of its capital stock, and so pledged with the Mercantile Trust Company, as security for the payment of ten millions of dollars of bonds, as appears from the returns of such gas companies to the Board of Gas Commissioners of Massachusetts, was the sum of $4,400,000; and, as appears from the records of the Boston Stock Exchange, the market value of said stocks was, in January, 1889, after the value had been enhanced by the endeavor of said Addicks and said Dillaway to purchase the same, only slightly over seven millions of dollars. As appears from the terms of said ten millions of dollars of bonds, the annual interest thereon was five hundred thousand dollars. The annual charges of the trustee for its services, expenses and taxes paid amounted to from two to three hundred thousand dollars annually in addition. The total annual charges of said trustees under said agreement, exclusive of the sinking fund, amounted consequently from seven to eight hundred thousand dollars. The dividends on the stock of the four Boston gas companies, out of which said annual charges were to be paid, as appears by the sworn returns of the companies to the Board of Gas Commissioners of Massachusetts, amounted in the year ending June 30, 1889, to only $363,000, and in the year ending June 30, 1890, to only $370,200, leaving an annual deficit of approximately, three to four hundred thousand dollars. This annual deficit the Bay State Gas Company of New Jersey as appears by the terms of said agreement, agreed to pay to the Mercantile Trust Company; but the Bay State Gas Company of New Jersey had no assets of any kind whatsoever except the equity in the capital stock of the four Boston gas companies, which was of no value.

As appears by the contract hereinafter mentioned, some time prior to April 9, 1890, said Addicks and said Dillaway fraudulently, by exercising the control by said Addicks of defendant hereinafter described, sold and transferred to the defendant company shares of the capital stock of the Bay State Gas Company of New Jersey of the par value of $995,000. The complainant is ignorant as to what consideration was paid said Addicks and Dillaway therefor. Said stock of the Bay State Gas Company of New Jersey was of no value, as the company had no assets other than the equity in the capital stock of the four Boston gas companies, as hereinbefore stated.

On the 9th day of April, 1890, said J. Edward Addicks fraudulently caused an agreement to be made between the defendant and the Bay State Gas Company of New Jersey, which agreement was signed by said J. Edward Addicks, as president, and W. H. Miller, as secretary, of the defendant, and by said F. P. Addicks, as treasurer, and W. H. Miller, as secretary, of the Bay State Gas Company of New Jersey, of which agreement a copy is hereto annexed and marked "Exhibit F." In and by said agreement it was provided, in substance, that the defendant should pay to the Bay State Gas Company of New Jersey, from time to time, such sums of money as should become due from the Bay