Sacramento daily record-union. [volume] (Sacramento [Calif.]) 1875-1891, 1883-02-22
ODD FELLOWS BANK CASE.
FULL TIKI OF THE DECISION OF
JUDGE WILLIAMS,
The Assign ment to Smith Declared Full
and void-set Aside as to
AL Contrasting creditofs.

The case Of H. G. Smith vs.. The Odd Eel.
lows Savings and Commercial Bank and
others, which mas been before the Courts in
various forms since 1879, and partially tried
at different timer, snd which has occupied the
attention of the Court for the week past, was
concluded yesterday afternoon, and deci.
sion rendered The case was one affecting
! the interests of large number of depositors
in the old bank above.named, and the trial
has been attended with unusual interest.
Colonel Greed Raymond was plaintiffs coIn-
sci, ex-Attorney. General Hart fer the PEG
pies Savings Bank, and A. 2. Cstiiu and
Henry Edgerton for ths contesting creditors.
The case having commenced when Judge
| benson was upon the bench as District
Judge. he being disqualified, It was first par
TALLY heard before Judge Meyers, st Auburn,
but was brought back subsequently to this
city, and tried by Hon. Geo. u. Williams,
| Superior Judge of Ell Dorado county. The
decision, which is favorable to the claims Of
the eontesting CREDITOR, and adverse to those
OF H.sG. Smith, assignee, and the Peoples
Savings Bank, is az follows;
THE DECISION.
The Court said: The only question to be deter
mined at this time is in relation to the validity of
this assignment, and, as am suffering with very
severe headache, will not be able TO review the
testimony fully perhaps it ought 10 be done in
the case and will state the points as briefly as pos
| sible for the decision.
The plaintiff in the case claims to have received
al assignment from the Odd Fellows Savings and
Commercial Bank on the 2lst OF September, 1878.
| BE entered upon the possession, partially II not
fully Of all the property of that institution, and pro-
ceeded to discharge his trust Being brought into
Court by various suits, and having some dfhculty,
as he claims, in dischargng his trust, he brought
this action for the purpose of submitting the whole
| controversy and the matters at issue to the
| Court, that the Court might direct in what
| manner the trust should be administered and what
disposition should bs made Of the assets. large
number or creditors or depositOrS Of the old bank
ratihed and consented to this assignment, acted
uhaer IL ana were willing to accept whatever might
be found TO be due them upon proper and fair set
Element OF the assets i'll the hands Of the assignee
AS TO whether or not they would have yielded to all
the depostors more il they had not undertaken the
| litigation which has been gong on for 80 many
years, is question that the Court hss but little to
/ do with. Certain of the depositors not satisfied
with this proceeding, commenced actions against
tho bank and obtained Judgments, and certain
others, brought into this Court by this action, have
come here and
DENIED THE VALIDITY OF THE ASSIGNMENT
| Under which the assignee has been acting. 1t is
claimed by these depositors and creditors that this
assignment was void-void for several reasons That
the character OF the ms tuition was such that it
could not properly make an assignment; in other
words, it could not make an assignment under this
Act. That the language of the Act is such IS to
preclude the idea that it applied to institution of
this character That the institution could have pro-
| tected ITSELF as ! understand counsel for the Judg
ment creditors to claim, from being harassed by
suits and by parties who would be seeking to sub
ject its property TO the payment of their debts, by
simply causing the claims to be registered and that
having that power, that il does not come within
that sect n of the statute which says that
| a debtor is insolvent within the meaning
of that title when he is unable to pay his debts
| from his own meaDs as they become due. Counsel
for the plaintiff claims on tue question Of the
power of the corp ration TO make this assignment
that the corporation belongs to that class that it
had no power to make an assignment for he reason
that the relation of debtor and creditor did not
list between the bank and It's depositors that this
was a trust and that as such the depostors could
not obtain Judgments, and that the only thing that
could be done would be TO go ana administer the
trust. That question, as presented by che plaintiff
| is in great doubt under the laws Of this State The
decision Of the Supreme Court in Burke against
Badlam does not cover il entirely nor does the de-
| cison in the case OF Mitchell against Beckmsn /
think the great difficulty in the question lies III the
DUAL CHARACTER OF THIS CORPORATION.
| II it was simply loan and eayjrgs society, then
should think there would be no question but that
| the corporation could not make an assignment of
this character under the statute but the Leg lature
| has seen proper TO put into the laws such broad
provision in regard to corporations as to at least
thorize the formation Of corporations of this char
acter to this extent. The question has never been
Irrigated, TO my knowledge that is, w1en corpora
ton is formed ike this corporation formed, and
enters upon business, that it has right to unite
| these two classes of corporations in one-to do
! loan and savings and commercial business.
They ought never to be united, but
that never can be questioned by any
one except the State II, then they have the legal
right to establish bank OF this character, with
commercial department, certainly the relation of
creditors to that portion OF the institution would
| stand the same as creditors to any other banking
| institution-that is. the relation Of debtor and
| creditor would exist.
Now the difficulty, in my mind, Is about limiting
the effect of this uniting of the two characters OF
4 corporations and whilst I had thought in the BE-
ginniDg-Iny mind being directed solely to the ques-
ton of whether or not a loan and savings society
| could make an assignment of this eharacter-yet
when come to consider the fact of this double in
corporation, it seems to ne that it is SO much mat
ter Of doubt that il it was absolutely necessary to
the decision TO decide that point, should held that
the assignment could be made In other words,
that that form of incorporation Is not such 90 to
preclude them from making an assignment But
that is 4 matter about which have grave doubts,
and do not think it is essential that there should
be decision upon this point that would in any
manner affect the determination in this case
think there other points that dispose of il with
out coming to final conclusion on that question OF
law.
IRREGULABITY OF THE ASSIGNMENT.
The next question presented is as to the regular
ity OF the meeting that held at the time the
sgnment made. 1t is claimed by the judgment
creditors that al Of the Directors were not
present, and that IT being a special meet
should be given to all the Directors IN order to
make the meeting regular, one OF the Directors not
attending the meeting. This is disputed by the
counsel upon the other side TO this extent UNDER
stand it That whilst it might be admitted that it
is necessary to give some kind OF a notice that even
IL that notice Is not given that all the Prescriptions
in faver of the regularity of the proceedings
the corporation, and that the attack made ia this
case is of collateral character, and therefore can
not be considered. / must differ with counsel
for the plaintiff in this respect. The very
basis of this proceeding is that assign
ment. 1t is directly attacked by the judy
ment creditors. They come in and by their
peadings say that this is the Of the corpora
ton; that this was special meeting, and that all
the Directors were not present, and that the law
required al OF the Directors TO be present, the alb
sent Director not being notified according to law ,
that these Directors present had DO power then to
acs and therefore not having power TO act that the
assignment that was authorized then null and
void.
THE NOTICE OF THE MEETING.
As to the question OF notice to this absent Di-
rector Mr. Heiibron, it appears from The testimony
that the President Of the corporation, the morn
ing or the at OF the 2lst Of September 1878,
drec ed the clerk Secretary 10 have notice given
TO the Directors that meeting would be held
| that evening or that night do rot remember
which IL was. IhlS secretary, or clerk, JOfu an
other one Of the employees to give this notice He
says that he verbally notified various Directors In
the frat place the President said that il was I'M
necessary to notify or two Of them, because he
had seer them himself Then this clerk notified
some Of the Directors, but unable to find Mr..
| Hebron and was informed that he had gone to
San Francisco. 1t docs not appear that the Secre-
tary ever issued any nctice, and all that done
seems to have been done verbally. This is the
tmony OF the officers Now, one Of the Directors,
Mr.. Schwartz comes in, and says that he gave Dir.
, Hebron written notice. What that notice
was and what was the form of it, and
, who it was signed by, does not ap-
pear Mr. Hebron thinks that he received
notice Now am inclined 10 the opinion taking
the testimony OF the officers and the parties whose
duty it was to give and the notice. that these
gentlemen are mistaken, and think it very easy TO
understand how they could be mistaken. Mr.
Schwartz il he is not entirely mistaken IN regard to
any written notice, probably left note at Mr..
Helbron's place. signed by himself, that there was
: to be meeting that evening. Mr.. Helihron was
probably informed that day, the subsequent day,
Of this melting and from the lapse OF time he
has come to the . Inclusion that he was notified OF
this meeting. ] do not think their statements
can fairly be accepted as being proof OF
notice when the officer who was directed by law to
issue this notice. and those who directed by the
President 10 serve the notice know nothing about a
written notice or anything about Mr. Hebron ever
having been notified On the contrary their opinion
gassat the time that Mr.. Hebron WAS not IN the
} city The provision Of the static which requires
notice under such circumstances is binding
, T1,NJu fryrT A