Mr. Franklin outlined the case for the defence in the afternoon session of the Court, He said he had listened with great interest and much pleasure to Mr. Bryan's oratorical effort thet: morning, but he did not fect in a picture-framing mood. He had always heard that it was not much use doing much iz" when one had both the Jaw and the facts on one's side, and that was his position, He intended to discuss the facts of the ease, and Mr, Fessenden would deal with the points of law involved, 'The record in the ease, continued Mr. Franklir, was singularly free from contradiction, There was only one conflict in the testimony. The 0. C. was organized under French Inw in 1920, and was registered in the French' Consulite. In 1924 Steen and his associates heard that certain Mr. Gatton owned 600 shares of the 1,000 which represented the capital of the C, 0. C. and was desirable of disposing of his controlling interest. The value of the stock at par value was $60,000, and $100,000 was paid. "In September, 1924, the old board resigned anda new board appointed. Between that date and the end of 1924, 221 additional shares were purchased by Steen and his associates for the "sum of $27,000, thereby acquiring 881 shares. On going into the books after they had acquired control they found that they had been deceived by the former bourd, and that the condition of the company was: such that certain assets required placing much lower valuation, After writings off these assets and putting Proper valuation on other assets it, was "found that the finance situation was not what they would like it to be. The men who had 881 shares reached down into their pockets and donated 258° shares the Realty Syndicate to the C. All losses were made good and they started afresh on what they. hoped would be a successful venture.. A caused buistiess in Shanghai and the vicinity to come to a standstill, and the business of the C. 0. C. being with Chinese the company suffered losses.
The French Directors In the latter part of 1925 Mr. Harold Dollar left Shanghai permanently and upon his arrival in America resigned from the Board. At that time also the French Government promulgated a new ordnance relative to corporations organized under French law, a accordingly three French directo were elected, In 1926 the company was still showing a loss and needed reorganization. About April, 1926, Litehfield acted as general manager and operated the company. Finally in October of 1926 x balance sheet was requested by the Borrd of Directors and it showed that the entire capital of the company had deen ivst and an additional sum of S#146S. The Intter figure was a loss from the mathematical reserve.
The holders of the 881 shares decided to sell the company. They let the fact be known that they wore desirous of disposing of the company and they had several "nibbles," only one of which materialized when Mack represented a group of Chinese and proposed the purchase of the shares. The was decided that $200,000 be placed to the company's interest, and that the 358 Realty Syndicate shares should be withdrawn as an asset of the C. 0. C.
That Letter of Credit So far the facts were undisputed and uncontradicted. The facts and figures concerning the company were freely discussed and the Chinese agreed to the conditions of the agreement as outlined by Steen and Mack, The letter of credit was given to Steen who, thereupon, pro duced the 840 shares of the C, 0, and these were counted by the Chit nese. Steen said he wished first to verify the letter of credit from the Chinese Savings Bank, which he lide A discrepancy in the Chinese wording and the English translation was discovered in the Bank and an wration made by the manager of the bank who stated that the sum of $200,000 was immediately avails ble, Mz, Franklin again referred to the Tetter signed by Sanchez as managing director of the C. 0. and also his letter asking Steen to wend him the letter of credit.
He contended that there was no question of fraud, and the only conflict of testimony was that wer of the Bank denied the istence of the letter of eredit— never was such a docu-the whole thing being a ramesnp" from the beginning to the end, had stated that the cave & and from beginning, to end, but why should Wong deny the existence of the letter of credit? dit the ease should have wen brought in the Provisional Court, but Wore had saved himself andthe $200,000 by lying to the Court that the letter of credit never existed. The only question of fact for the Court to decide was whether there was a letter of credit or not,
Text read from the printed page and cleaned; old type leaves the occasional error.