The morning news. [volume] (Savannah, Ga.) 1887-1900, 1891-08-10
USED THE COLLATERALS.
MYERS & BROS INT REST III THE
BACKER FAILURE OVER $4,000.

baCSor IN ar6eQ Win AppTOpTldLlDS
Securities Forwarded with Notes
for Discount and Using the Firms
Credit Instead - Myers & Bros.'
Claims and the Terms of the In
junction Granted Against the Two
New York Banks and Backer's AS
signee - Position Of the Savannah
Firm.
The injunction granted by Judge O'Brien
of the supreme court of New York in favor
of H. Myers & Bros. Of this city against
the Merchants National Bank and the Gen.
trail National Bank of New York and Ben
jamin F. Einstein, assignee for Abraham
Backer, according to latest accounts, in
wolves something over $4,000.
A statement of the granting Of the in
junction was published in the MORNING
News the day after it was granted. The
injunction was to prevent the Merchants
Bank from disposing OF sixty bonds of the
Savannah ana Atlantic Railway company
and q note OF 800 900 given by the MuscO-
gee Real Estate Company of Columbus and
pledged with the bank by Backer. The
Central National Bank was restrained from
dfsposinR Of 163 shares Of the stock OF the
individually pledged by Backer.
WHAT BACKER DID.
Backer, it appears frequently discounted
notes for Myers & Bros. Recently they
cent HIM two notes for discount amount
ing to about S72 900. AS collateral they
forwarded the stocks and bonds mentioned.
1t is alleged Backer did not use the collateral,
but discounted the notes on the credit of
the firm. 1t is charged, also, that Backer
Informed Myers & Bros. that the collateral
had been pledged, while in reality he had
put 1t up on his own account.
In the affidavit to the court Sligo Myers
says that the firm employed Baoker to get dis
counted two notes of $40, 900 each, and two Of
Sl2, 500 each. AS security Myers & Bros. de-
posted with Baeker sixty negotiable bonds
of $500 each of the Savannah and Atlantic
railroad, and note of the Muscogee Real
Estate Company Of Columbus Backer
represented to them, the affidavit says, that
he could not get the notes discounted with
out some security for their redemption on
maturity. That statement Myers & Bros
claim to have since found to be false.
Backer discounted one of the four notes
at the New Haven County Bank, o. at the
Chemical Bank, one at the Central National
Bank and the otaer at the Merchants Ma
uonal Bank. They we're discounted on the
strength of their Endorsements, and no Sc
curlty was required by the banks. The Sc
curities deposited by Myers Bros were
taken by Backer to the Central National
Bank, and used with some securities of his
own as collateral for a loan of $4,000 or
more, for his personal use. Backer pledged
the securities without any authority or
right to do 50, and the injunction was asked
for to compel the bank, should Backer's
loan not be repaid at maturity, to salty its
claim on other securities OF Backer's
THE GROCERY COMPANY IN TT
The affidavit in support of the petition to
restrain the Merchants National Bank is
similar in form. Mr. Myers swears that in
June, 1887, his firm delivered to Backer 1853
sl00 shares of stock of the National Bank
Of Savannah, to be used only as collateral
to secure payment of such notes as might be
sent TO him by the firm for discount. On
May IA last the Savannah Grocery Com
pany made te for $500, due Sept. 10.
1891 and sent the note to Becker for discount.
hacker got the note discounted by William
a. Langley 81 Co., and wrote to MYERS
Bros that he had put up the collateral with
Langley, whereas it is alleged ne had taken
the stock with some other securities to the
Merchants National Bank and borrowed
$4,000
The position that Myers Bros. are now in
- that they must pay their notes when due,
but cannot reclaim their collateral unless
the loans Backer got on it are repaid They
declare that they are ready to take up their
own notes at any time.
TERMS OF THE INJUNCTION.
In granting temporary injunction to
the plaintiffs against the MerchantJ
National Bank, the Central National Bank.
Abraham Backer and Assignee Einstein,
Judge OBrien says:
1t appearing to me by the annexed com
plant, duly verified and by the annexed
aildavits, that sufficient grounds exist for an
injunction order namely, that the defendant
Backer, has converted to bis own use l63 shares
| OF STOCK OF the National Bank of Savannah of
| he par value of $4,000. and has pledged the
| said stock of the National Bank of Savannah TO
| the defendant. the Merchants National Bank
TO secure a loan made to him personally ana
mat there Is danger that the said defendant
| the Merchants National Bank may satisfy the
Sald loan out OF the said stock, and that the de
aeh 4t may claim ownership in the stock
ana endeavOr TO recover il or the proceeds
. Ordered, that the defendant, the Merchants
National Bank, he enjoinsd and restrained dur
| ing the tendency OF this action from selling
| Transferring, negotiating. or in any manner dis
| posing OF the aforesaid stock until the 1Ier
| chants National Bank shall exhaust its re-
| medles against the o5her securities to satisfy
| the loan made by it TO A. Backer and until \
| shall sell the other securities for the SstiS'
| faction OF said loan
The osnk Is also enjoined from selling the
savannah Bank stock without giving the
| plaintiffs notice of the time and place of
| 6ne sale. Backer and his assignee. are
also enjoined from making any dis
| position of the securities should thew he
| able to get possession of them. Argument
to show cause why the injunction should
Ut be continued during the tendency of
the action, and why the plaintiffs should
| .ot have such further relief as they deem
lust and proper, will be made Aug. IL.
hackers SIDE OF IT.
Mr.. Backer's side of the case was said by
Assignee Elnstein to be to the effect that the
.ePotiation OF the securities had been au-
fhorized by the owners. 1t was Mr.. Backer's
understanding and it will be so held by
MIN IN the trial of the case, that the securi-
les were given him in the course of the
ordinary debit and credit of business. and
ldat no particular agreement had seen
made to use them as collateral on any par
ocular paper. They We're merely credited
o Myers Bros, and were one of the debts
iow owned by Mr.. Backer, not securities
Iven him IN trust 1t was not expected
dr- Backer will hold, that the Identical
Talue received for the securities should be
-eturned to Myers Bros, but that they
hould constitute credit upon which Myers
Bros q liDprtv tO dra