The herald., 1893-06-13
BOTH FOR THE DEFENDANTS,
Two Important Decisions Rem
dered by Judge Ross.
San Diego's Bursted Bank Loses Two
Large Suits.
The Coronado Beach Company and State
Loan and Trust Company VIII
Not Have to Ante Up
Any More.

In the United States circuit court yes
terday. Judge Ross rendered his de-
cisions, ordering judgment for the de-
fendant in each instance, in two civil
actions brought against corporations by
Receiver F. M. Pauly of the now de-
funct California National bank of San
Diego. The defendant in the first case
is the well-known Coronado Beach COM
pany, the suit being brought against it
as the holder and owner OF certain shares
OF stock in the Coronado Fruit Packing
company, its prorsts OF an alleged in
debtedness to the bank from said COM
pgny.
The opinion gives the purposes for
which the Coronado Beach company was
incorporated, which are in effect to pur-
chase and sell lands and to lay out and
build town, the purposes for which
the fruit packing company was incorpo-
rated are shown to have been to manu-
facture fruit packages, veneers and gem
eral woodwork. e. s. Babcock, one of
the incorporators of the Coronado Beach
company and manager OF that COM
pany, acting for the Coro-
nado Beach company, became one
OF the incorporators OF the Fruit Pack
age company signing the articles of in
corporation sc. 8. Babcock, jr., Trustee
for the Coronado Beach company" In
the same way he subscribed for 100
shares of the Fruit Packing company
stock, for which $4,000 was paid, the
Coronado company paying the money.
The court holds that to incorporate q
fruit packing company and to subscribe
to the stock was not one OF the purposes
of the Coronado company as set forth in
it's charter, and that all of the ecompany's g
acts in any such business were ultra
wires and void; that therefore the Cor
onado company never legally held any
stock in the Fruit Packing company, and
il could not be compelled to contribute
upon any stock 80 illegally held to any
indebtedness the Fruit Packing COM
psny owed the bank. Judgment there
fore for defendant.
The second decision in the case of
Pauley, receiver, vs. the State Loan and
Trust company of Los Angeles, states
that j. W. Collins and s. w. HaveYmall,
each owning 100 shares of the now col
lapsed bank and at time when it was
regularly conducting business and ap-
psared perfectly solvent. together bor-
rowed $12, 800 from the defendant, for
which thev gave their joint note. secured
by these 200 shares of stock. The stock
was transferred to the Trust company,
the transfer being made to it 'as
pledges" and in such fashion the Trust
company held the stock on the day OF
the collapse of the bank, and also when
Receiver Psuley levied an assessment OF
500 per share on all of the bank stock
in whosoever hands it was held.
This case was therefore to collect
from the Trust company $100
assessment on each of the two hundred
shares of the stock it held. The trust
| company had already lost the $12, 500 il
had loaned on the worthless bank stock,
and now this suit was to make it pay
$40, 900 because 1t held that stock.
Judge Ross decides that in order to
enforce an assessment sgainst a stock
holder he must be the owner of the
stock at the time the assessment is
made. That the trust company never
owned the stock and that the verdict
must be for the trus. company.