The herald., 1893-08-10
MORE CITY BANK TANGLES
The Assets Likely to Be
Further Reduced.
Depositors Preparing to Re-
move Receiver Br0dtbeck.
In Arizona Irrigation Scheme Which
Figures in the Case.
4 Claim That the Receiver Was Not
Properly Appointed-A Big claim
Against the Avsilnble
Assets.

Assets.
The authority Of Receiver Brodtbeck
II the City bank will be called in ques-
lion probably on Saturday or early next
week by the attorney for the depositors.
It appears that there is hardly any
room for doubt that Mr.. Brodtbeek was
not properly appointed. He, it 10
claimed, was appointed under one COM
plant and Ia acting under another, on
which no summons has ever been ls-
iued. This matter will be fully inquired
into in the proceedings which will soon
be commenced.
ANOTHER TANaLE.
The hopes Of the depositors In the late
CITY bank for recovering any considera-
BILE portion of their deposits are far from
being sanguine, nor as the time passes
do their chances appear to be height
sned to any great extent. In fact, every
week seems to reveal some part OF the
.ssets as void, and various means upon
which the depositors relied to help serve
the reimbursement fund are found to be
faulty, and the situation appears worse
now than several weeks ago.
A petition, which materially affects
the present small amount OF assets in
the receivers hands, was filed in depart
ment five of the superior court Last
Monday, and awaits only the return OF
Judge Shaw from his vacation before
being formally argued and presented by
counsel.
1t is a complaint in intervention by
James B. Rice, and was interpreted to
the complaint in the original case OF
Margaret E. Miller vs. the City bank by
an order issued by Judge Smith. The
complaint in intervention asks that the
court order the receiver to pay at once
TO the complainant the sum of $l230 in
tact, already held by the City bank as
trustee, together with certain notes and
papers to the value OF over 100000, re-
serving such sum as may be due the
bank for it's services as trustee.
The reason alleged by the complaint
why that sum should be had now and
not be classed among the ordinary COM
mercial deposits received in the course
OF business, is that it WAS held in trust
by the bank, and trust accounts are
never held in the general banking fund
and are entitled to the preference over
ordinary accounts.
If the ord,r is granted by the court, it
will take exactly $3.50 out of the fund
that the depositors thought was intact
ard would be used in liquidating their
claims. That this new move will not
meet with universal pleasure goes with
out comment.
The complaint is the outcome of an
Arizona irrigation deal started sight
years ago. In that enterprise, Louis
Wolhey. former territorial governor,
saw at Gila Bend, southwest OF Phoenix,
the possibility Of constructing a dam
and to build large irrigating system
over the surrounding country. He en-
gagged several parties in the project, and
sold several hundred thousands of dol.
lars worth OF water right to the settlers
ahead with the work. and party OF
rich Peoria, ILL.,, people stepped in and
offered to finish the system. He
agreed to give them sufficient notes
collected from the settlers to reim-
bursc them for the work; also to meet
ali actual expenditures, with corre-
spending value in the notes. FIe made
q mortgage, in the form OF trust deed,
for the dam site, which he gave to the
City bank to hold as trustee. In order
to further secure the Peoria people he
gave notes to the value OF between $780,
GOO and $4,000.
In its Office as trustee the bank was to
collect from the settlers the interest and
other money accruing on the no,es, and
10 be held in trust. 1t was further pro-
vided that If WolHey failed in his con-
tract with the Peoria people the bank,
as trustee, was to sell the property at
Gila Bend.
During the period OF year the eum of
$3.50 interest on the notes was paid into
the bank. Wolfey failed in his contract
with the Peoria people, and the property
is to be sold August 26th, with the re-
suit that they will buy it all in and in
time develop fortune.
The present action ss brought by Mr.
James M. Rice of the Peoria company,
which is known as the Arizona Construc-
ton company, to compel the payment Of
the $l230 interest to his company.
The item in the receivers report ap-
pears simply as "City bank trustee,
$l23J."
Mr.. A. d. Childress has made affi-
davit, which is attached to the COM
plant, that both the 1920 interest and
the package of papers were held by the
bank as trustee. The 1920 ia 20 en-
tered on the banks books.
Mr.. III. O.~Collins, the attorney of the
Arizona Construction company, was
seen yesterday by a HERALD reporter.
Mr.. Collins stated the reasons for draw
. ing the complaint in intervention as
given above. He said that the matter
cf tho pavmant of tha x1220 uouJ.3 ,,rah..
ably not be decided by Judge Shaw
until he, had carefully considered the
case. AS to the papers, he thought that
there would be no contest made over
them.