The morning call., 1894-01-11
The Peoples and Pacific
Banks Deeds.
THAT DISPUTED DOCUMENT.
Was 1t a BOna-Fide Mortgage
or a Transfer ?
WHAT EITHER SIDE ASSERTS.
The Foreclosure Suit Now on Trial
Before Judge Sanderson-R. III.
Mcdonald Jr. Testifies.

The action brought by the Peoples
Home Savings Bank against the Pacific
Bank 10 foreclose mortgage of the latter
banks premises and for the appointment
OF receiver, came up for hearing before
Judge Sanderson yesterday.
Permission had been given the day be-
fore to the Bank Commissioners 10 inter-
vene, and they were represented by Attor-
ney w. f. Baggett p. F. Dunno appeared
for the Pacific Bank directors, while the
plaintiff was represe nted 10y d. S. and
NJ. A. Dorm and Frank NJ. Stone. The latter
opened the proceedings by stating the cir
cumstances leading TO the suit, and said
he intended TO prove that the deed in Ques-
ton was no ordinary deed of transfer, but
bona tide mortgage, given in good faith
by the Pacific Bank directors as security
for two notes of 100000 each held by the
Peoples Home Savings Bank.
The deed was produced in court, and the
signatures of K. II. Mcdonald Jr., vice
president. and 0. +. Miner, secretary of
the Pacific Bank. were admitted as cor
rect, as was the seal of the bank attached
thereto, but il was net admitted that the
bank signed the deed.
1t was shown that a meeting at which
the mortgage was approved was held by
the Peoples Bank directors on June %,
1885, and the signatures of Columbus
Warehouse, president, and j. Z. Farnum,
secretary of the bank, attached TO the min
utes OF that meeting, were admitted as
correct
The books of the Peoples Bank were
then produced in court to show that on
June % the Indebtedness of the Pacific
Bank in respect of the 100000 notes was
transferred from the list of commercial
loans 20 tile place set apart for collateral
loans, on receipt of the deed which is now
in dispute from the Pacific Bank The
books were produced and the accounts
therein verified by Mr.. Palmer, bookkee per
OF the Peoples Home Bank.
j. l.. tarnum, secretary OF the Peoples
Bank and acting manager Of the Pacific
Bank under the direction of the Bank
Comm ssiOners, was then called upon 20
testify. He said that on June %. 1898, the
document which is represented to be a
deed OF mortgage was brought TO him at
the Pc Ople's Bank during business hours
by Frank V. Mcdonald, cashier of the
Pacific Bank. Mcdonald did not stop
long. The witness at once had the deed
recorded and the account changed from
the list OF commercial TO that of collateral
loans.
In crOss-examinatiOnM Mr.. Farnum stated
that the Peoples Bank had been in exist
ence since May, 1888, and had had a de-
post account with the Pacific Bank from
Audl udlt uu III tue dtluC Dduk ClOStu It's
doors on June 23, 1898. The PEOPLES
Bank had money lying in the vaults of the
Pacific Bank and held certificates of de-
post Tor al payments. No other tran
sactlOns existed between the two con-
cerrs. In acknowledgment of the two
l6ans of 100000 each the Peoples Bank
held two certificates of deposit, but no
security whatever. The certificates were
shown 10 the witness and, 1t being pointed
out to him that they were Endorsed, he
was asked If any resolution had been
passed by the board of directors authorlZ-
ing such Endorsements. Mr.. Farnum
replied in the negative.
Mr.. Farnum," asked Dunno, did the
Peoples Home Savings Bank ever demand
mortgage from the Pacific Bank?"
Attorney Stone objected 10 this question,
but tarnum got his answer in first. He
said no such demand had ever been made,
and that while he acce pied the deed as an
officer of the bank he had no authority
from The directors TO do so. IL didn't de-
cline it," be said. II was very glad to get
1t. both as IN officer of the bank and as
citizen"
"When Frank Mcdonald brought you
the deed did he make any request of you"
Yes. He said | ought to give uD those
certificates of deposit. But he didn't stop
long enough to argue the point"
Why were you in such hurry to have
the deed recorded?
DeChuSt L uedTu IndL at D p. NJ. IN at
night the Pacific Bank directors had met
and decided TO discontinue business So
for the Interests of my bank | was desir-
Gus OF securing our deed of mortgage"
X ii. Mcdonald Jr., the vice-president
OF the Pacific Bank, was then called to the
witness-stand. Mr.. Mcdonald stated that
he signed the deed in question and at the
time was under the impression that 1t was a
bona 6de mortgage and not deed of trans
fer. AS such 1t was meant, however. Mr..
Mcdonald had to serve as juror n Judge
Hunts court, so he was excused from
crOss-eXamin alton until this mOrnirg q.
This closed the plaintiffs case and p,
T. Dunno at once introduced in evidence
the minutes of the meeting of The Pacific
Bank directors held June %, 1893, at which
it was decided to suspend business: the
petition OF creditors asking that the bank
be declared insolvent, and the answer
thereto. An adjournment was then taken
until this morning when r. II. Mcdonald
Jr. will he crOss-examined by ATTORNEYS