Sacramento daily record-union. [volume] (Sacramento [Calif.]) 1875-1891, 1881-04-13
THAT BANK.
ODD FELLOWS BANK MATTERS REVIVED
AND IN COURT.

Deeply-interesting Law Arguments and
Bold and Startling Charges Of Fraud
The Rights Of Depositors-Wili
1t Ever be Tried7
Yesterday there came up il the Superior
Court the Odd Fellows Bank csses, repre-
ssnted in the action of H. G. Smith, az
signee, against the Peoples Saving Bank and
several hundred other defendants Among
the defendants were sixteen depositors who
! had not consented to the transfer of the
assets OF the Odd Fellows Bank to the Peo-
ple's Bank, and WHO had secured judgments
for their claims. These were represented by
Catlin & Hamburger and Henry Eigerton.
Mr.. Smith was represented by Greed Hay
mond. Freeman & Bates and Attorney
General Hart represented the Peoples Bank
and other defendants, and George Cadwal-
ader and r. 7. Deylin appeared for f. W.
Fratt. Judge Williams, of Ell Dorado. pre-
sided. During the hearing of the case the
Court said the case, as developed to his under
standing during the argument, appeared TO
! be one of great Importance and involving
profound interests and ne saw clearly why 1t
was so desirable TO have it determined.
ONE SIDE
Mr.. Raymond, for Mr. Smith, said that
| the Odd Fellows Commercial Bank Was the
successor of the Odd Fellows Savings Bank.
1t, being in a failipg condition, assigned to
! II. O.. Smith all of its property. He took il
and converted it into money at good. fair and
| large prices. The Indebtedness of the bank
was about $3.50, 900. Something like S400,
| GOO in value Of creditors ratified the assign
ment. AS to them there is then no question.
/ Others represented here believed the assign
ment invalid. They attached the property
and garnisheed the money ia the hands of the
assignee. a tan per cent. dividend had been
paid to all parties ratitying the assignment,
and TO these parties represented by Mr.. Cat
! lin, with the understanding That 1t should be
without prejudice TO their portion III The
case. MIR. Smith files his complaint against
the Odd Fellows Bank and the Peoples
! Bank, as successor of the Odd Fellows Saw
| ings Bank, and these parties. He alleges
there was an assignment to him. That is
denied, and forms one issue. He says
suits were brought under deposits mace
under certain bylaws and that makes another
| issue. Smith says he has money in as trustee
suits the property viii! be frittered away, and
asks a court of equity to determine the
method. The Judgment creditors say the as
| sienment is invalid. Smith says the relation
of debtor and creditor never existed between
| these parties and the bank. He asked that
! all parties be enjoined from proceeding
with their judgment, and that al the issues
be determined in this case. They asked
| leave to go to Judgment however, and it was
] ii - : A
motion to dissolve the injunction followed,
and was denied. The assignee is now ready
to dissolve the injunction. He asks for an
account to be taken of all his receipts and
| disbursements and expenses, and of all claims
| entitled to be paid cut and of all moneys and
securities, and that an order be made for a
pro rata distribution, and that as to these
parties represented by Mr.. Catlin, sufficient
be retained to pay their judgments, if so
! finally ordered, and that Mr. Smith be dis
| charged. 1t makes no difference whether the
assignment stands or not. It is a sealed
| book, except as to the $50 0C0 or $40 900
represented by 8lr. Catlin and Mr.. Edgerton
Smith has got all the money, and simply
asks to be relieved of it and let the litigation
| between the other parties 60 on to the end of
time if they wish.
THE OTHER SIDE.
Mr.. Catlin said his statement would differ
from the preceding. The Odd Fellows Saw
| incs and Commercial Bank did a savings ard
loan and some commercial business. 1t had
n deposit debt of over 5000, 0O0 On Septein-
Der y, 1878 it protested to make an assign
ment t. II. G.. Smith for creditors benefit.
It was made by perfectly solvent bank, and
not on any protested ground OF insolvency.
| The bank was not insOlvent. The assignment
was made prCfessedly under the Civil Code
l.,
was fled and sworn 60, and showed the bank
to be far from insolvent The Directors met
clandestinely and protested to execute the
| assignment. There was no notice given. II.
q. Smith was President of the bank. He
was Director too, a stockholeer also, and
largely indebted TO the bank, and, contrary
to the statute, bad borrowed the bank funds.
That evening they passed a resolution that it
was expsdient for the bank TO 90 into liquida-
ton, and that it would assign 70 Il. c. Smith,
the President. To qualify himself, he then
resigned as President and Director, and then,
all the same evening, they elected Edward
Cadwalader President, and he signed the
assignment to Smith. All the Direct
ors but oae were largely indebted
to the bank, having taken It's funds Tor
their own uses, giving bare notes III some
cases, ard security in others. The statute
absolutely prohibits such doings. The bank
! Was Solvent, more 50 tltfH tIE ordinary run
OF savings banks, and had no excuse for IiqUi-
d&tiou except the statement that business
was beginning to be dull. Up to July Of that
year it had declared regular and large diyi-
deuds, and between then and September no
event took place to cause embarrassment
There was no authority for the making of the
assignment. Ii was not for the benefit of
creditors, but proved disastrous to them. 1t
was an assignment for the debtors of the
bank, and they had taken the bank money
contrary to the Ciyilif not the Penal Code, for
they were the Directors OF the bank Que
dictatorship had been left vacant since March
preceding That left eight. At the secret
meeting in September seven we're present.
one being ont of the city. OF the seven six
were largely indebted TO the bank, aggre-
eating about $3.50 0G0. Ii the bank had
needed funds to carry on business, all they
had to do was TO pay up. But they didn't,
but made assignment for their own benefit,
and for delay, and to defraud and cheat the
depositors. OF these Alr. Catlin and MIR.
Edgerton represented in value between
$40, 900 and $40. 900. AS to Mr.. Haymond's
offer to dissolve the injunction, lis position
was the reverse il June, 1880, when the cred
itors moved its dissolution, and he resisted,
toe case then being before Judge Myers, at
| 8uDurn.
TIE TROUBLE BEGINS.
Mr.. Raymond understood Mr.. Freeman
to object to going to trial, as the case is not
III condition for tIial under this rules, but he
asked all TO consent to take up the case as
between themselves and the assignee
Mir Edgerten preferred to try the issue as
to the assignment.
Mr. Raymond said they had no business to
try it except rs 20 the sums they represented.
He did rot care who won so long as an &c
count is taken, and the amount Mr.. Cstlin
claims is deducted t. be fought over and ill
the balance divided between these consentisg
to the assignment; or. he was willing to
divide all the money. Mr.. Smithwould bring
the money into Court, some 100000
Mr. Catliu said it was impossible for him
to 90 that, and if it could be il was only
about 70 per cent. OF what should come, in
Guiding all the property and WHIST 1t
should have earned for two years.
Mr. Hayrnond-Couldn'5 We pay you and
put you ont Of Court
Mr.. Catliu-Pay us and NE will go out of
Court.
Mr.. Raymond said Mr. Catlin was not in
tarested in the whole fund, but he was willing
TO give his clients their pro rata share and
leave the surplus to be invested by order of
Court Didn't propose to bring the 800, 000
into Court Evsry depositor has been paid
dividends due Smith has been swift and
Jealous in discharge of his trust. lie has had