The herald., 1893-07-01
DRANE DRAINED THE DuCATS,
And Merick Reynolds is Held
Responsible.
Judge Clark Renders a Decision in O
Celebrated Case.
The General Manager of the San Pedro
Lumber Company Given
Severe Scoring by
the Court.

The sensational civil suit OF the San
Pedro Lumber company ct al. vs. Merick
Reynolds ct al, which has been pend
ing in Judge Clafk's department of the
superior court for several months, was
yesterday decided by him in favor of
the company, in accordance with one of
the longest opinions ever filed in any
case in the county, the document con-
sisting of 81 type-written pages.
Those who have lived in Los Angeles
any length Of time will remember the
Sensational flight of @. K. Drane, the
bookkeeper of the company at San Pc
dro, at the time Merick Reynolds was
manager of the business, the. subse-
quent discovery of large and systematic
defalcatione on his part, and the bring
ing of suit to hold the manager per-
sonally responsible for the defalcations.
This is the suit decided by Judge Clark
in favor of the lumber company.
The company was organized in 1882,
and Mr.. Reynolds was employed as its
agent and manager of its business out
side of San Francisco from the time OF
lis organization until October 9, 1899,
when he was discharged.
G. X. Drane was employed by Reyn-
olds as bookkeeper in April, 1886. and
acted az euch until August, II, 1899,
when he disappeared and has never
since been heard from, and his where
abouts remains unknown.
1t was not until the 10Th of the month
that the defendant communicated with
President John A. Hooper, informing
him of Drane's disappearance, and that
in his belief he was short in his &C.
counts and defaulter.
AS result an examination of the
books was made by President Hooper
and G. f. Ludgen, an expert accountant,
and it was easily discovered that there
had been large defalcation. Before
the amount was ascertained, the presi-
dent demanded security of Mr.. Rey-
nolds to cover any loss. He gave it
September 25th, assigning 1882 shares
of stock Of the Rues Mill and Lumber
company, 10l shares of the Blum Lum-
Der company, and Ill shares of the San
Pedro Lumber company. The last two
blocks of stock stood st the time in the
name OF Talbert as trustee for Emily f.
Pope, to whom Reynolds owed $l3. .000
The plaintiff claimed that the exam
ination of tho books showed g deficiency
of upwards OF $53, 900; that this losa
was the reault partly of embellishments
and defslcations of other employees of
the plaintiff under Che management and
control of the defendant, and in conse.
quence of his neglect to properly dis
charge his duties; and partly the result
of variety of fraudulent acts, omis-
sions and breaches of trust, embezzle-
ments and defalcatons on the part Of
Mr.. Reynolds himself.
They asked for an accounting, and the
sale OF the stock pledged by the de-.
fendant, the proceeds to be applied to
pay the amount found due from him.
In his answer the defendant admitted
that he was the trusted and confidential
agent Of the company, and admitted an
indebtedness much less than that
claimed by it, but denied all fraudulent
acts on his part.
Mr.. Reynolds alec fled cross-com-
plant alleging that Drane embezzled
$4,000 of the company's fucds; that
not knowing the amount OF his own in
debtedness he executed the assignment
of stock, although there was only due
from him less than $4,000. He claims
he rendered thatamount to the company
and demanded a re-transfer of the stock,
WHICH, Whs IcIuecu, tuat ID 10 IcdbOu6Uly
worth $40, 900 and he asks judgment for
that amount.
The principal questions involved in
the case, which were discussed by coun-
sci in arguments and briefs, were the
character and admissabiity of the evil
dence adduced to establish the COM
pany's loss, the amount of the loss and
the defendants liability therefor, and
the legal effect of the defendants tender
of $4,000.
Judge Clark, in bis opinion, goes at
length into discussion OF these various
points, and necessarily examines min
utely multiplicity of transactions.
Many of these are detailed, and the
various items are passed upon by the
court. In some instances the amounts
are changed by him to accord with his
views OF the matter. Thirty-three pages
of the opinion are taken up with palms.
taking examination of the various iteme
making up the defalcations charged, and
the court says generally that the pre-
ponderance of the evidence establishes
that the books and accounts when cor
rected and balanced show that there
should have been on hand in cash the
SUN of $4S, ,646.92 in excess OF the
amount actually found to be on hand at
the time referred to, and that loss to
the plaintiff of that amount is proven.
He then takes up the discussion of