The Mill That Vanished Before Its Workers Got Paid

Baird and Dan McPherson commenced a suit yesterday against the Kent Lumber Company, A. E. Smith, L. Smith, Ziba L. Smith, John W. Trounce and George A. Smith to have a receiver appointed, alleging fraud on the part of the defendants.

The complaint alleges that the Kent Mill Company became indebted to the plaintiff, Dan McPherson, for labor on saw logs at the mill, and also to Baird for $150.92 for labor. Each filed a lien on the logs in the mill pond about the mill, brought suit to foreclose, and secured judgment. It is then alleged that on June 12, 1894, defendants Ziba L. Smith, John W. Trounce and George A. Smith, fraudulently and with intent to cheat and defraud plaintiffs, filed a certificate of incorporation under the name of the Kent Lumber Company; that the Kent Mill Company was and is insolvent; that defendants L. Smith, A. E. Smith, Ziba L. Smith, John W. Trounce and George A. Smith, with the intent to defraud the creditors of the Kent Mill Company, conspired to form the new corporation, in which Ziba L. Smith, John W. Trounce and George A. Smith have only a nominal amount of stock, the balance being owned by the defendants A. E. and L. Smith. It is claimed that, when incorporating the Kent Lumber Company, A. E. and L. Smith were the owners of the Kent Mill Company, including horses, wagons, lands, machinery, timber, mill and office fixtures, etc., valued at $18,000; that in pursuance of the conspiracy entered into between the defendants it was agreed that L. Smith and A. E. Smith should transfer to the Kent Lumber Company all the property of the Kent Mill, and that said partners should become the owners of the stock of the new corporation; that Ziba L. Smith, John W. Trounce and George A. Smith should be assigned a nominal amount of stock in order to become the incorporators, holding out to the public that they were the owners of the corporation; that the defendants, with the intent to defraud their creditors, did make such a transfer to the Lumber Company of all the property of the Kent Mill Company, which transfers and bills of sale are fraudulent and wholly without consideration; that the plaintiffs caused an execution to issue on their joint judgment, which was served by the sheriff on A. E. and L. Smith, but returned endorsed, 'No property found.'

In view of these allegations the plaintiffs ask for the appointment of a receiver, the cancellation of the transfer, an accounting of the property, and a sale of the property to satisfy their judgment.