New-York Daily Tribune, September 15, 1909, page 3:
UNITED WIRELESS SUED
CHARGE OF CONSPIRACY.
W. Scott Sims Seeks Triple Damages Under Anti-Trust Law.
W. Scott Sims, the inventor of the torpedo which bears his name, has brought suit in the United States Circuit Court against the United Wireless Telegraph Company, the International Telegraph Construction Company, Christopher C. Wilson and Harry Shoemaker, under the Sherman anti-trust law, and asks triple damages, the first amount claimed being $31,350, making the total $94,050. Mr. Sims, who says he owns 125 shares of the International's stock, charges in the complaint that his loss has been caused by a conspiracy to stifle competition and thus put the International company out of business.
Mr. Wilson is president of the United Wireless Company, and Mr. Shoemaker is now a director. They hold the same offices in the International company. The complaint says that the latter company was incorporated in 1904 in this state, with a capital stock of $100,000 and established a plant in Jersey City. Mr. Shoemaker, who is an inventor, was the consulting engineer, and the company had acquired the rights, according to the complaint, to his patent, known as the radio-telegraph system, and to all his inventions that might be patented. The Shoemaker system, the complaint says, was installed in many vessels, and the company was doing a profitable business when the United Wireless Company was organized, with a capital of $20,000,000. The complaint continues:
On July 25, 1908, the United Wireless Telegraph Company, through President Wilson, with the intent to stifle all competition between the two companies and to absorb and destroy the business of the International Telegraph Construction Company, bought a majority of its capital stock and did acquire a chattel mortgage for $8,500 and another claim for upward of $10,000. Things began to happen then, according to Mr. Sims. He says in the complaint that Mr. Wilson made himself president, and installed the vice president, the treasurer and the secretary of the United Wireless in the same positions in the International. They were S. S. Bogart, W. A. Diboll and C. C. Galbraith. Then the Shoemaker radio telegraph system was adopted by the Wireless company, the complaint says, and large profits were made installing it in vessels. It is further charged in the complaint that the United company sued to foreclose the mortgage of $8,500, which, the bill charges, was null and void, and then the Wireless sued the International in the New Jersey courts for $76,921 and got judgment for $34,266.
On this judgment the Jersey City plant of the International was about to be sold when a minority stock holder, Philip C. Kullman, appealed to the courts for the appointment of a receiver for the International company, and the sale was stopped.
Kullman's petition is recited in the complaint and contains further charges against the United Wireless Company. He alleges that the officers of the International company, acting in the interest of the majority stock holders, had executed a mortgage in favor of Dutilh, Smith, McMillan & Co., a Delaware corporation, for the purpose of "fraudulently hindering the National Electric Signalling Company," a corporation which at that time brought suit against "the said International
Telegraph Construction Company on account of some alleged violation of patent rights."
It was alleged by Kullman that the making of a mortgage was a part of a "conspiracy to defraud the creditors and minority stock holders of the International company," and he added that the judgment obtained by the United Wireless Company was not based on an honest debt. Mr. Sims, in his complaint, alleges that the United Wireless Company owes the International a large sum of money because of its appropriation of the Shoemaker system. The defendants make a general denial.