The record-union., 1898-12-21

Frank Miller. President of the Ma
tional Bank of D. 0. Mills d Co., was
the first witness called by the defense
He testified that the bank was not nor
never had been Treasurer OF the Union
Building and Loan Association, ana
that no such notification had ever been
made to the bank by the association.
The witness identified a batch OF
twenty-five cancelled warrants drawn
by stockholders against the assccla-
ton and paid by the bank, and they
were admitted in evidence. The war
rants We're paid at request of the as
sociation on a loan made in 1898. Tne
account was subsequently closed and
others were opened.
The witness said in answer to tuftn-
er questions that he had at one time
seen newspaper account OF Injecting
of the Directors of the Union BulioiiiS
and Loan Association to the eHect tna'
the National Bank of ID. o. Mills eA Co'
had been elected Treasurer OF the Us
sociation. but that the bank had never
received official information OF the ldc''
and it seemed to be a case OF the asso-
citation using the name OF the pdhA
without its consent.
The witness said the Union Building
and Loan Association was treated pre-
cisely as other customers OF the pahk'
Witness testified that the bank was
never q shareholder in the Union AS
sociation Prior to February 26, 1896.
! the association borrowed money from
! the bank
| Mr.. Johnson objected to various ques-
tions asked the witness by the detense
for the purpose of showing the na'ur7
| of the associations business WITH the
bank. The objections were based on
the ground that such testimony WAS II
| relevant because if certain thlngs Me'N
| done by the Directors they were doIe
| illegallv-that custom did not make
| them legal. The court sustained soihe
| of these objections and overruled otners.
! In response to a question Mr.. Miller
explained the circumstances attending
the loan made in February, 1896, to the
association. The witness was con-
fined to the conversations leading up 10
the making of the loan. He said the
result was that the bank demanded GER
tain collaterals and got them. The
| interview was between the witness and
| c. F. Dillman representing the BANK
ana B. u. SltlllIl1dll anu AN -
representing the association.
| Mr.. Miller said the association was
borrowing money to pay off series ol
| stocks, and not, as the BANK unosi-
stood, for the purpose OF relenolhS lhe
money. All the payments were lnoorseu
| on the notes, and there remains unpaio
approximately $4,000. Witness could
not recall Just what collaterals are now
| on hand.
| Witness said the bank officials had
no knowledge of the securities belnS
over or undervalued. Neither did they
attempt to direct in any manner how
the borrowed money was to be used.
Counsel for the defense asked num-
| Der of questions calculated to snow
that the bank was never apprlsed .!
any member or officer of the assocld-
ton that any question existed as to the
legality of the transaction. In short,
that the bank was in 20 way response
BILE for the use of the money lent by II.
The right to show this was combatted
| vigorously by Grove L. Johnson, who
| held that if the action was illegal at
the beginning it was illegal all through.
| At this point Add G. HinksOn, who is
counsel in other cases yet to be tried,
| was permitted to argue the point at
issue as it was one that would arise in
collateral cases He claimed that
though the Directors of the association
might violate a rule of the association,
their action could be ratified and made
binding by the stockholders.
The court finally made a pro forma
ruling admitting the character of evil
dence sought to be offered.
Mr.. Miller replied that no officer of
the association ever suggested the pos
sible inegaIity of the loan until couple
of months ago, and no stockholder ever
complained of the act, SO far as he
knew.
The witness said. in answer to a ques-
ton by Mr.. Seymour, the bank mana
gers never authorized the bank to act
as Treasurer of the Union Association.
| Late in the afternoon Grove L. john
| son began the cross examination of
! Mr. Miller. The latter stated that he
and Mr.. Dllman acted for the bank in
| the matter of the Union Association
| loan The bank has no regular rules.
Being a National bank, it is managed
under the regulations prescribed for
such banks. Practically, in the words
of Mr.. Johnson, the witness and Mr..
| Dillman run the bank" but loans are
acted on by the Directors at their
monthly meetings.
Mr.. Miller, replying to Mr.. Johnson's
questions, said he had a knowledge Of
current reports published in the local
papers He had never notified the
State Building and Loan Commission
ers that the bank was not the Treasur-
er of the Union Association.
| Mr. Johnson then led the witness over
| the matters connected with the bank
| loan in 1896 to the association. The
witness was under the impression that
he did not consult any attorney at the
time the loan was made. The transac-
ton had been talked of for two or three
days. Loans have been made to various
corporations.
| Witness said that the Union Associa-
ton officials wanted $4,000 at the time
they applied for a loan with which to
pay off the sixth series of stock. The
sum lent was $4,000. Since February,
1896 a few loans have been made to
the association, one being on the Briggs
orchard for $4,000, the others for
smaller sums.
Payments have been made on most Of
these loans. either by cash or checks,