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THE MUSIC TRADE REVIEW
. . . LUDDEN & BATES AFFAIRS IN COURT . . .
William Ludden Claims $62,000—Asks for Injunction—Charges That L & B. Music House is insolvent
—Music House Restrained From Collecting Money on Piano and Organ Contracts, Claimed by
Ludden—The Plaintiff Says an Agreement Entered Into With the Music House and the Mathu-
shek Piano Company Was Broken —Defendants Say They Are Solvent and Will Fight.
[Special to The Review.]
Savannah, Ga., July 9, 1901.
In the Superior Court here Judge Fal-
ligant granted Wiliam Ludden a temporary
restraining order in which the Ludden &
Bates Southern Music House is enjoined
from making collections on certain piano
and organ contracts amounting to about
$57,000. The plaintiff alleges that the de-
fendant company is insolvent and is in-
debted to him in an amount not under
$62,000.
The petition for an injunction is against
the Ludden & Bates Southern Music House
and the Mathushek Piano Co. The music
house is incorporated under the laws of
Georgia and the piano company under the
laws of Connecticut. The petition filed in
court and argument upon which will be
heard by Judge Falligant Saturday morning,
is a lengthy one and contains over forty
paragraphs and allegations.
It is stated that after negotiations, by
reason of the fact that the Music House was
. largely indebted to the Piano Company, and
to the petitioner, and was unable to meet
its indebtedness, a tripartite agreement was
entered into between the two defendants
and Ludden, on Aug. 16th 1899. It appears
in the agreement that the Music House was
indebted at that time to the Piano Company
in the sum of $192,161.83, and to Ludden
in the sum of $91,574.76. It is charged
that the Music House was then unable to
meet its indebtedness, and is now insolvent.
The plaintiff alleges that as soon as the
agreement was executed, he assigned and de-
livered to Henry S. Parmelee certificates
representing two-thirds of the capital stock
of the Music House, procured the resigna-
tion of J. A. Bates and J. D. Murphy, two
of the company's directors, and that Henry
C. Parmelee and C. C. Buckingham were
elected in their stead, all in accordance with
the agreement. As further agreed in the
contract at the first meeting of directors
in September, 1899, Parmelee was made
president of the Music House.
It is charged that about April, 1900, the
music and merchandise stock was materi-
ally reduced without the consent of Lud-
den, to whom it had been pledged as se-
curity, under the agreement. The differ-
ence in the valuation of the stock by its
reduction is estimated at nearly $1,500.
It is further shown that under the con-
tract the indebtedness to Ludden was to
be paid off by payments of $1,000 per month
for one year, beginning June 1st, 1899, and
after June 1st, 1900, payments of $1,500 a
month were to be made until the indebt-
edness was paid in full. It was agreed that
as often as payments were made to Lud-
den the Piano Company had the right to
draw $2 for one paid to the plaintiff. The
petitioner recites that up to the first of last
April the money was paid, and that then
$750 was paid on account of the April pay-
ment.
The plaintiff charges that between June,
1899, and April, 1901, the Piano Company
received about $40,000 more than it was
entitled to under the agreement and that
it is continuing to collect more than it is
entitled to, in total disregard and in viola-
tions of the rights of the petitioner as a
creditor of the Music House. It is further
shown that Henry S. Parmelee is president
of the Music House and the Piano Company
and that Henry F. Parmelee, his son, is
vice-president of the Music House.
It is contended that the Mathushek pianos
were not supplied at the prices, or under
the conditions agreed upon. The prices were
raised and payments were demanded before
they were due under the agreement. It is
charged that because President Parmelee's
pecuniary interest in the Piano Company
is larger than in the Music House the com-
pany has received the $40,000 which it is
not entitled to under the contract. It is
further charged that the Music House was
not permitted by President Parmelee to pur-
chase pianos and organs of other makes
and styles, such as were needed profitably
to prosecute the business. It is also con-
tended that the Music House failed to pay
to Ludden the amount due him under the
contract and still fails and refuses to pay
him.
The Music House is charged with hav-
ing failed to carry out one of its obliga-
tions when it did not assign to Ludden
piano and organ lien contracts on which
amounts are due. It is contended that there
were other violations of the contract, and it
is charged that Parmelee has not conducted
the business for.the benefit of the creditors
of the Music House, save only his Piano
Company, and his individual interest, and
that the rights of Ludden have not been
regarded, and that no effort is being made
to subserve them in any way.
It is related that the Music House be-
ing in default, Ludden, on April 8th, last,
through his attorney in fact Jaspersen Smith,
took charge of the music, merchandise and
fixtures, together with the books of accounts
and money on hand, contained in the store
at No. 140 Bull street. It is claimed that
the property taken covered everything in
the building, save the pianos and organs,
and things connected with that business.
It is alleged that the petitioner's attorney,
Smith, placed in charge of the property M.
Temple Taylor, who remained in possession
thirty days. At the end of that time it is
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PIANOS
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NEW YORK."
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charged he was illegally and forcibly dis-
possessed by the representatives of the Mu-
sic House, at the instance of President Par-
melee.
It is shown that on April 10th the plain-
tiff wrote the Music House and notified them
that because they had broken the contract
the full indebtedness was due, and that the
piano and other contracts with books and
papers had been taken. A similar letter
with 373 shares of the stock of the Music
House was sent on the same day to the
Piano Company. Ludden avers that for
many years the Music House had been in-
debted to him, and the course had been to
transfer to him the piano and organ con-
tracts made with the Music House, and due
to it as security for this indebtedness. At
the time the tripartite agreement was made
Ludden claims to have had on hand a large
number of these contracts, aggregating over
$85,000.
It is shown that when the plaintiff wrote
the letters claiming that the contract had
been broken the indebtedness to him amount-
ed to $63,824.76. At that time he alleges
that he had in his actual possession contracts
on which were due $57,013.33. On May
31st, last, there had been collected on these
accounts since April 10th about $1,284.62,
and since then there have been several col-
lections which may amount to a few hun-
dred dollars. The balance alleged to be
now due Ludden by the Music House is
not less than $62,000.
The plaintiff avers that while his rights
to collect these contracts is clear, the collec-
tion has been hindered and embarrassed by
written notices served in the name of the
Music House, but at the instance of Parme-
lee and Buckingham, who reside in New
Haven, upon the parties owing these con-
tracts, forbidding their payment to Ludden or
his agents. It is claimed that in this way
serious damage is done Ludden and dam-
age not easily ascertained. It is claimed
that these contracts are inadequate security
for the debt due and that the notices sent
out are particularly hurtful to the plaintiff.
Mr. Ludden alleges that by correspon-
dence, he has endeavored to adjust the mat-
ter, but without success. He avers that the
Music House is now actually collecting
money due under the contracts, notwith-
standing the fact that it refuses to pay the
plaintiff as required by contract. With this
showing the court is asked to grant a tem-
porary injunction.
It is desired to have the defendants en-
joined from serving notices upon parties in-
debted under the contracts, and from inter-
fering with the collection of this money by
the plaintiff, and from collecting or attempt-
ing to collect any part themselves. Also
from an interference with the right of Lud-
den to the possession of the music, mer-
chandise and fixtures, with the books and
accounts. From paying over moneys to the
Piano Company in excess of what it is en-
titled to under the contract. That the de-