The San Francisco call., 1896-11-03
THE TRUE FACTS
AND THE COURT RECORDS
Regarding Judge Hebbard's Con.
nection With the Peoples
Home Savings Bank.


Hebbard's connection with the Peoples home
Savings Bank ltigation:
On the first day of May, 1894. while was
presiding Judge OF the Superior Court at San
Francisco, w. H H. Hart Esq, then Attorney
General of the State of California, entered my
chambers and presented complaint against
the Peoples Home Savings Bank, praying to
have the bank declared insolvent under the
banking act of this State. AT the same time
he represented to me the extreme necessity ior
appointing a receiver to preserve the assets OF
the bank until its affairs could be rescued from
the chaotic condition in which they then were.
Thereupon l said to General Hart: II shall
appoint General John +. Sheehan in this case,
because 1 believe him to be trustworthy and
capable and possessed of exceptional e1ecu-
tive ability" To which General Hart replied:
81 know General Sheehan; 1t Is all right.
On May /, the very day which General
Hart filed his complaint, General Sheehan
qualified as receiver and gave bonds IN the
sum OF 100000. 1t being necessary for the
receiver TO employ an attorney, General Sbee-
han employed James Alva Watt as SUCH at
torney.
That night General Sheehan, as receiver,
after great difficulty, forced his way into the
offire of the Peoples Home Savings Bank. A
short time before the receiver effected his
entrance $500 was paid to the former attor-
neys OF the old board of directors from the
money on hand at the bank, as payment In
advance for services, leaving the sum OF only
81 30 in the bank vaults. At that time the
banking act OF the State as amended was new
and had never been construed by the Supreme
Court There was doubt whether receiver
could be appointed in an action brought by
the Attorney-General, and in view OF that
doubt, in ormed General Sheehan from the
outset that he might never become entitled to
any compensation for his services. General
Sheehan acceotedEthe appointment with that
understanding.
On June II, 1894, the Supreme Court of the
State rendered an opinion, deciding that the
appointment of a receiver was improperly
made in the suit brought by the Attorney-Gen-
erAl, but further stating expressly that cred
itors ana stockholders OF banking corpora
rfnT1f n oil nah
the banking act provided none, because an ac-
tion in equity might be maintained in a proper
case TO afford ali requisite relief. (See 100 Cal.
Reports, page 80. Anticlpa ting this sugges-
ton, an action in equity of the proper scope,
entitled Nathan Goldtree VS.. The Peoples
Home Savings Bank and other defendants"
had been commenced on May 81, 1894 On
June 25, 1894. and in compliance with the ex-
press suggestion OF the Supreme Court above
stated, General Sheehan was appointed re-
ceiver in the equity action.
Before doing so, however, went to the Chief
Justice OF The Supreme Court of the State of
California and consulted with him. During
portion OF that interview Justice Van Fleet
and Justice Garoutte were present. l said
to Chief Justice Beatty: 81 do not know how
you gentlemen are going TO finally pass upon
my acts in relation 10 receiver in This bank
mlddie, and / have not come to talk to you
about the law OF the case. l am going to ap-
point a receiver in an equity case, and have
come to say TO you that whatever l do in the
court be low do without any intention of be-
ing contemptuous of this court i have fact
to grapple with; must do all in my power.
Lawful ly, to protect and save to the depositors
who have been robbed what there is left of
the assets OF the Peoples Home Savings
Bank" Whereupon Chief Justice Beatty said:
Judge. we know what you are doing; go
The Supreme Court, in their decision of June
IL, 1894, held that where bank is in In
solvent condition and Il is unsafe for it longer
to continue In business, the Attorney-Genera
shall commence an action in the name of the
people of the State. That If a decree lie made
by the court declaring the bank insolvent,
the board of directors for liquidation under
the supervision of the Bank Commissioners.
When such dec. ee has been made the court
has absolutely nothing further to do with the
affairs OF the insolvent bank. Even before that
opinion wss rendered was SO very careful OF
the interests of the depositors and anxious
that they should have representation upon
the board of directors that permitted them,
through their attorneys, to come into court
and endeavor to organize new board of di-
members On the 25th day OF January, 1895,
Thomas S. Williams Jr., one of said deposltors,
wrote the following letter to me, recognizing
my efforts in the premises:
SAN Francisco CAL, Jan. 25, 1895.
Hon. j. c. b. Hebbdrd, Judge Superior Court
DEAR JUDGE: My business demands my pres
ence this morning or / would be on my way
out to see you in relation to depositors hav-
ing representation on the Board OF Directors
have Informed members OF our committee of
the efforts you have made in our behalf and
my interview yesterday morning with Rolo
V. Watt, who now objects to my going on the
board. have no prejudice. as he claims, nor
| have any desire 10 be a director, but the COM
m1ttee representing depositors desire repre-
sentation and earnestly look to you in simple
justice to them to use your influence with
Messrs. Sheehan and Watt TO that end. The
time is short and / trust that you can take i'm
mediate action TO bring about our request.
thanking you in advance, am with respect
yours very truly THOMAS 5. WILLIAMS JR.
Acting for Executive Committee.
A day or two after that and following almost
on the heels of the letter Mr. Thomas 6 VII
| liams Jr and Mr. Bartnett of the law firm of
Gunnison, Booth Bar nett, the ATTORNEYS for
| the California Sale Deposit and Trust Com
pany, came TO my chambers. Both gentlemen
earnestly requested me to use nv personal in
huence 10 get them representation upon the
board of directors about TO be organized.
said to Mr.. Williams: "Mr. Williams with this
| affair l have nothing to do judcially. but
W. III now leave my courtroom and chambers,
Will go downtown and l will leave no tone
unturned till / have obtained for your COM
mittee, representing some OF the depositors,
representation upon that board of directors.
And, Mr.. Williams, as you desire to be one OF
that board l will endeavor to nave you Sc
lected as one, but shall have difficulty in
| getting you on the board as director, becaus e
am informed some of the depositors do not
| like you personally"
/ then Immediately went to the California
| Safe Deposit and Trust Company TO General
| Sheehan and TO Mr.. Watt. | also went to Others
] who had influence with the stockholders, and
within a short time succeeded in getting
| elected as n. EN- bers of the board of directors
| OF the Peoples Home Savings Bank. In .qui da-
| tion, Thomas S. Williams Jr. and two OF n is as.
sociaies to represent the depositors OF the
bank. Before doing this, however 1 said 10
| Mr.. Williams: "Mr. Williams, if l succeed in
| accom- plishing this result have one favor 10
! ask of you. Will you go among your people
who have been made TO believe that am
working against their Interest and tell them
the truth?' and he said, Judge Hebbard. ]
| will do So"
In January, 1896, the California Safe De.
| posit and Trust Company, the assignee oil over
100000 in claims of depositors against the
| bank, issued printed report TO the deposit.
ors, in which they made statement in terms
as follows: However, it soon became apparent
| that it would be impossible TO execute our
| trust to the best interests of the depositors
without representation upon the board oi
directors of. the Peoples Home Savings Bank
| but we need not state here Inc vexatious liti
! CATION, trouble and work necessary to accom-
| plish that result. Suffice it to say that only
after the institution of four aciions-one by
| our comrany as plaintiff and three by stock
| holders, our attorneys acting in their behalf
| q representation was accorded the inte rests rep
resented by US. Judge Hebbard of our superior
| Court and Mr.. Kilburn of the Bank Commits
lslon kindly interceded to accomplish this
| result and to give the depositors the repre-
| sen tation TO which they were entitled, NOR
ally if not legally. The result of their inter