Los Angeles herald., 1892-10-04
BAD FOR THE STOCKHOLDERS,
A Decision By Judge Ross About
a San Diego Bank.
A Young Man in Trouble About a
Young Woman's Letter.
proceedings Yesterday In the Various
Courts Notes OF Cases on
Trial = New Suits
Filed, Etc.

Yesterday morning Judge Ross, IL
the United States circuit court, handed
down an opinion overruling demurrel
in the case of the county Of San Diego
vs.. the California National bank, which
is very important ruling in the mat
ter in controversy, and as result o
which the stockholders OF the defunc
bank will receive very little of the funds
now in the hands of the receiver.
The suit was originally brought in the
superior court of San Diego county
against the bank, which became in
solvent November IL, 1891, and against
f. N. Pauly, the receiver, on whose mo
tion it was transferred to the circuit
court.
The county charges that August Is
1891. its treasurer, G. R. Daner, de-
posited $5975. 70 county funds in the
bank. and other similar deposits sg-
prepatipp SIC, 900 were made and certiti-
Gates of deposit issused. The bill also
ALLEGES that County Tax Collector II. w.
Weineke deposited $6ll4.85 in the bank
November 2, 1891. and other deposits
aggregating $4,000 additional OF the
COuuJy luOuCy, lOi WhlCAi SOA oihVoOCc vi
deposit were issued, and moneys aggre-
eating $24, ,532 rs, for which no certifi
Gates were taken by him. The bill al
leges that the moneys mentioned were
for safe keeping, and were public and
trust funds. 1t was also alleged that
only $2453 81 has been repaid, and the
receiver has received sufficient sums
since his appointment to repay the
amounts in full. The bill alleges that
there are not sufficient assets to pay the
indebtedness of the bank in full, and
unless the receiver is restrained from
applying part of the funds now in his
hands to the general Indebtedness OF
the bank, the county will not receive its
money in full.
The defendants, by demurrer, urged
that the complainant has a plain and
adequate remedy at law, and that the
bill contains no equities emitting the
complainant to any relief against the
defendants or either of them.
The court Gays that it is very clear
that if the bill states cause of action
at all it is of an equitable nature, and
enforcible in court of equity alone. In
the present case not only did the de-
fendant bank have knowledge that the
depositors of the moneys in question
were at the time of such deposits Off
GERS of the county, and that the moneys
30 deposited were held by the officers
depositing them in trust for the county,
but the bank was chargeable with no.
tice of the fact that the law OF the state
made it illegal for those officers to make
or the bank to receive such deposits.
The bank, therefore, acquired no title
to the moneys go deposited, as against
the complainant, and they continued
impressed with the truet in complain
ants favor. The moneys deposited
were no doubt mingled with the moneys
Of the bank, and their identity lost;
but, asks the court, can such fact de-
stroy the trust in complainant's favor
or prevent the enforcement of it by q
court of equity? The bank being in
solvent, the question was between the
complainant and the general creditors
of the bank represented by the receiver.
The ordinary creditors became such vol
unfairly; they deposited their money
with the bank with their eyes open.
But the money of the complainant was
deposited by it's officers, and received
by the bank, not only without knowl-
edge of complainant, but contrary to
law. To put the complainant
on the same plane with the
ordinary creditors would be to make
the former share in loss to which it
did not voluntarily subject itself, and to
give to the latter ehare in money
which never in equity became the prop
erty of the bank. This would certainly
not be just.
The court holds with Mr.. Justice Brad
ley that confusion does not destroy the
equity entirely, but converts it into a
charge upon the entire mass, giving to
the party injured by the unlawful diver
sion \ priority of right over the other
creditors of the possessor. Tue demur-
rer is therefore overruled, the defen-
dants being allowed 20 days in which to
answer.
Judge Ross also rendered decision
by written opinion in the case of w. E.
Savage vs. w. G. Worsham, a suit in the
circuit court. The plaintiff asked to
have the amended complaint dismissed,
on the ground that the cause of action
therein attempted to be stated is in its
nature and substance different from that
attempted to be set out in the original
bill, and, therefore, cannot be regarded
as an amendment OF the bill. The sub
ject OF the suit is over 40-acre tract of
government land. The court granted
the motion OF plaintiff to strike out the
amended complaint.