The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1896-12-05
.CHACE FAILS
At SAINT A CRUZ
The Owner Of Two Hotels
Files a Petition in
Insolvency.
Large Number of Creditors Lose
Heavily Because of the
Collapse.
Lack of Experience as a Boniface
Brings Ruin to Popular
Man.

Rufus Chace, proprietor OF the two lead
ing hotels of this city, the Pacific Ocean
House and Sea Beach Hotel, both being
well known to all visitors to Santa Cruz,
departed with his wife yesterday for San
Jose, and left behind him petition in in
solvency, with debts of over $4,000.
Everything he has is mortgaged, and
many local creditors will suffer losses.
All of the property that could be secured
has been by. the Bank OF Santa Cruz
County and the City Bank of Santa Cruz,
and whensthese two creditors. with f. A.
Him & Co., are paid, nothing will be left
for unsecured creditors.
The voluntary insolvency proceedings
were surprise to many, but to others not
unexpected. Chace, without previous
hotel experience, undertook, with very lit
tie capital, to manage two of the largest
hotels in the State-houses which needed
an experienced manager and large re-
serve fund.
Chace is 80 years of age. He was born
and raised in Santa Cruz. He was book
keeper for his father, ]. D. Chace, in the
early eighties and later was manager for
the Postal Telegraph Company. In 1887,
during the Santa Cruz boom, he purchased
the interest of Lucian Heath of the real
estate firm off Heath 81 brennan, and in
1890 T. w. Matthews, ex-County Assessor,
who now appears as the indorser of Chace's
notes, purchased the interest OF brennan,
making the firm Matthews g. Chace.
Chace sold to o. L. Tutle in 1892 and pur-
chased with J. T. Sullivan the interest of
McCollum & Barnhardt in the Pacific
Ocean House, the purchase price being
$4,000. Chace put up half OF this amount.
In 1893 be purchased Sullivan's interest
and alone continued the management of
the hotel until yesterday.
In 1895 Chace purchased the business of
the Sea Beach Hotel from Sullivan for
$11, 900, and also assayed to run this alone.
While in the real estate business he &C.
cumulated $4,000, which he invested in
home and other real estate, and in order
to go into the MOTEL business he mortgaged
these properties. From this date, through
lack of necessary experience. he lost heav-
lily, and to meet his liabilities mortgaged
every piece of property he owned and bor-
rowed large sums of money on notes in
dorsed by Elizabeth Chace, 7. V. Mat
thews, Libbie A. Swift, Robert Cardiff, c.
A. Rice and others. His business is now
practically owned by the City Bank and the
Bank of Santa Cruz County, the former
having claims of $500 and the latter $2O,-
900, of which $1,000 is an overdraft on
Chace's bank account. Owing TO the de-
preciated value of all city real estate it is
doubtful if the real estate mortgaged will
return more than go per cent OF its real
value, thus leaving large deficit which
will fall upon a large number of local
creditors.
The petition in i'll solv ncy was filed by
Chace's attorneys. Lindsay & Cassin, this
morning, and Superior Judge Logan ap-
pointed Sheriff Milton Besse receiver.
The hotels are now practically closed.
The hired help is clamoring for recogni-
ton, and rumors are flying fast as to what
will be the outcome, and under whose
management the hotel will be run in the
future. Among those mentioned are
Messrs. Leonard of Boulder Creek aud J.
Il. Sullivan of San Francisco.
Yesterday, Just before leaving, Chace
tried to remove an express wagon load of
his furniture. but it was stopped and re-
turned to the hotel.
There is no doubt Chase lost his money
in the hotel ventures and not by gam bling
or wild speculation. Among the heaviest
San Francisco creditors are: D. Politzer,
Hildebrandt Posner Company, William
Woolf & Co., w. Pogen. Moore. Hunt &
Co., Gold berg Bowen Com panv, Wilmerd-
ing Loewe Company, Willard Bros, Cali
fornia Wine Association, Wetmore Bros,
Crown Dstilling Company. Michalitsche
Manu. Santa Cruz creditors suffer heavily,
among them being Williamson q Garrett,
A. M. Johnston, Santa Cruz Elec ric Light
and Power Company, A. Cohen, Charles
Bley, F. a. Him & Co. (probably secured,
but at present in Doubt Loask & john
son, A. G. Snyder, II. Cowell & Co. and
Roberts & Chittenden.
The petitioner swears there is due $1,000
as outstanding debts to him. from J. f.
Cunningham 5000, Hyck Bros. $3.50, DAVID
Wilson $425 and sundry smaller local
items. There are at present fores hadowed
legal complications arising out of the fol-
lowing affidavit attached to the petition
in insolvency:
About December, 1895, petitioner contracted
with the City Bank to purchase the furniture
of the Sea Beach Hotel for $40, $50. The said
City Bank holds certain promissory notes of
petitioner for the amount of said purchase
price, one of which promissory notes for the
principal sum of $3.50 being signed by Lucy
E. Chace, Robert Cardiff and c. A. Rice as
sureties. Petitioner has never received bill
of sale for said furniture. The City Bank has
ever refused ard still refuses to deliver such bill
of sale, claiming that the said furniture was not
to become the property of petitioner until said
purchase price had been paid and that until