The San Francisco call., 1896-06-11
TO PAY PEOPLES BANK,
Every Stakeholder Who Still
Owes on Shares Will
Be Sued.
The Banks New Attorney SO Advises
and the Directors Adopt the
Suggestion.

The Board of Directors of the Peoples
Home Savings Bank will sue every stock
holder and director who has not paid in
the full amount of his shares, and thesuits
will be pushed with vigor.
Such was the course decided upon at q
meeting yesterday, when the attorney for
the board had presented suggestions in re-
gard to the many delinquents. There are
about 10 stockholders, and on many Of the
shares there is still due the bank $66 6625 a
share.
General John F. Sheehan, manager of
the affairs of the bank, asserts that recent
newspaper articles suggesting that the
present management has been responsible
for delays in the trial of test cases ema-
mated from the opposition and were not
according to the facts. He mentioned, for
example, the Booth and Barnett case, set
last week, postponed to yesterday morn
ing at the request of the defendants, and
again postponed yesterday until the 18th,
on the request of the defendants.
The alto rney, who succeeded Mr.. Flour
noy in the prosecution of the five test
cases, in his letter of suggestions on which
the board acted, says:
I desire to call your attention to the fact
that there are at least three classes of cases
which involve questions OF fact and law.
The five cases now pending are actions
wherein the defendants are sued upon their
original subscriptions. OF course there will
be individual cases where stockholders will
claim certain equities and defenses growing
out of presentations and acts urged to be
prejudicial to them committed by various
boards of directors. AS TO these nothing
need be noticed further.
1t is, however, the fact that in addition to
the original subscribers who are now or here
after to be sued there are two other additional
classes whose defenses are not involved here.
First, those who have by assignment pur-
chase succeeded to the ownership of certain
shares of stock, and as to whom the cues ton
of liability for tne unpaid subscription is to be
determined; and secondly, those cases in
which stockholders have, in anticipation OF a
calling in of the unpaid subscriptions. and in
anticipation of the insolvency OF the bank
made assignment to irresponsible persons as
against whom any judgment must remain un-
satisfied.
l would suggest in any event that suits
be brought which will determine the rights OF
the board in both OF these latter classes
L desire, however, speaking generally, to call
your attention 10 the fact that in my opinion
any case, whether test or otherwise. will not
result in enforcing collection from others than
the mere individuals sued.
In the five cases now pending If judgment
were rendered in all of them it could not, in
my opinion, secure payments from the other
deltnquents. This must certainly be so in any
event until the Supreme Court has passed upon
all of the questions involved. This could not
, in all probability be done until the questions
as to the statute OF limitations would be
brought into the cases by reason of the delay.
think that suits ought to be begun against
all of the stockholders and an earnest effort
made TO collect these assets on hehaf of the
creditors of the bank. 1t might then be ad-
visable, after such suits were brought, to Sc
Iect number as test cases, and thereupon to
stipulate that the judgments rendered in such
cases should be conclusive as to all questions
involved in the others.
This, it would seem to me, ought 10 be the
course to be pursued, but merely beginning
and carrying on five cases in the expectation,
without any agreement therefor, that other
delinquent stockholders will pay mp without
suit is, in the light of experience in past
events, not to be expected.
AS to all the other Htigations of the bank
you have been informed from time to time by
me. and no effort is being spared to obtain ad-
Indication In all matters. Very truly yours
+. S. STRATTON.