The morning call., 1893-08-22

time assume absolute control OF any cor
poration's affairs to the exclusion Of stock
holders and other parties interested
therein.
In conclusion. Shaw submitted that IL the
Peoples Bank was not yet insolvent 1t
was in imminent danger of becoming so,
and. under the circumstances. such prompt
action must be taken as is suggested by the
appointment of q temporary receiver.
Shaw was followed by c. n. Fox, who,
in truly dramatic style, rehearsed the
whole history of the two banks and their
system of finance. Every allegation, he
said which had been made in the original
complaint had been practically admitted
There had been frauds on all sides.
Circumstances connected with the GER
tifcates of deposit for 100000 and the
Holder note for S97, 900 were known to
all. Under the guise of friendship and
kindly feeling the greatest hypocrisy had
been practiced. These certificates of de-
pOsit had been carried from the Pacific
Bank to the Peoples Bank and the note
had been accepted in the Pacific Bank and
in the name of the PEOPLES Bank. ''Where
is that $500. 900 now ?" said the speaker;
money belonging 10 the depOsitors of the
Peoples Bank? Gone where the woOdbine
twineth.' For the sun has set upon the
Pacific Bank for ever, and all we have to
show for our $500. 600 is two certificates Of
deposit of probably no value whatever"
There was a threat which the present
restraining order prevented being carried
out, namely, to surrender the certificates
Of 100000 as we'll as the notes of Holder
for S97. 600. AS to this note il was ad-
mitted by the other side that no considera-
ton was given for il, yet they put in as
security for 1t some deeds on real prop
erty executed by Frank Y. Mcdonald on
behalf of r. II. Mcdonald and the other
directors, who knew all the time perfectly
well that no consideration had been given
for tho note. 1t was a fraudulent act to
take out securities about which there was
no question and put in place of them
deeds given with out any consideration
whatever.
Can it be then said that the arm of
equity is so short that it cannot restrain
these men? l think not, your Honor.
This is case which challenges the power
OF the court to protect these assets by an
injunction TO restrain the willful msman-
agement of this banks affairs. IL your
Honor can restrain these men then comes
the question of relief. II is important
that these assets should be preserved for
the benefit of depositOrs and stockholders,
and the only way to do it is by the appoint
ment of receiver.
1--WE are told this is a savings bank and
that no receiver can be put in except at
the instance of the Attorney-Genpral |
fail to see this. / fail to see whom General
Hart represented. He introduced himself
to he court and interrupting Mr.. Dorm in
his speech laid down the law as if he were
the supreme power. But | fail to see that
the Acknowledgement stands above the
Judges of the Superior Court ana can COM
mand them as to what they shall do aud
what they shall not He has nothing
whatever TO do with this case. We have
waited fifty-elght DAYS for him TO speak in
the Deople's interest, but he has been
silent Now he comes to address us, not
on behalf of the people or the Peoples
Qnr, ~ lNUnf1 In. II fnr. 0 h.. IL.
hank. That is the position, If you please,
taken by the AttOrney-General of this
State.
when the Attorney General comes
here in the interests of the people | will
cheerfulfy help him, but when he comes
here and argues in the way he has done
to-day l say he is but man acting for a
master and not for the State of California.
Well, then, il he neglects his duties at the
command OF the man who has committed
the fraud let us have our remedy as
against the man. Let us uphold the court
Of equity that was in existence long be-
fore this State became what il is
Mr. Fox concluded bv denying that it
was the wish nf a small proportion only
of the stockholders that a receiver should
be aDpnin ted, asserting that it was the ma
iOTity that appealed to the court for pro-
lection. Mr.. Farnum was selected for ths
position of receiver by the Bank Commits
sioners; but anotber's name had been put
forward, that of Mayor Ellert If the
court desired TO appoint the Mayor. well
and good. and Mr.. Farnum was willing TO
give way.
P. F. Dunno closed the arguments on
behalf of the petitioner. He denied that
the case before the court was one for bill
in equity. The question was, who asked
for the appointment of receiver? The
application was made on certain repre-
sentations of fraud. The two most nota-
BILE allegations respected the loan of
5000. 900 to the Pacific Bank and the ote
for $500 of c. F. Holder. Counsel said
there was nothing to show that Ihe Pacific
Bank had not assets al the time to satisfy
this claim of the Peoples Bank, and there
was nothing 10 show as vet that the Peo-
pies Bank had lost 81 by the transfer.
So far as the complaint goes the Pacific
Bank gave ample securitY, dollar by dollar.
The same could be said of the Riverside
and Holder equities. mentioned in the
complaint, in neither of which cases could
1t he shown that the Peoples Bank had
suffered any loss.
Counsel maintained that as no intention
to steal had been attributed to these direc-
tors there was no need of the clause in the
com plant in which it was feared that
they might further deplete the assets of
the bank" All bills of equity must state
the facts as they are. and mere expressions
of opinion or apprehension were not suffi-
cent to obtain an injunction such as
prayed for In this case. Aud lastly, it was
urged that the court had no statutory
power to appoint a receiver for a corpora
tion until that corporation had been dis
solved.
The case was then submitted, and Judge
SandeTsOn promised to render a speedy
decision.
Suits by the Bank.
The Peoola's Home Savinps Rank 6lad