The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1907-05-22

HEARING FIXED
FOR TOMORROW
What DR.. Galeski and Judge
Crunp Say as to Loans Made
to Then1--Exanination
Of Books Conducted
Yesterday by
Mr.. Lamb.

Nl lIdlllO.
Tho fling OF O. bill in equity IN th<
Chancery Court Of the city OF Rlcn-F
mond yesterday by Attorney John q
Lamb. counsel for certain stockholders &
At the Southern Interstate Bank. OF
th,s CITY. asking for the appointment
OF a receiver to take charge OF the
assets of the bank, made public some
very Interesting allegations as to tho
financial status of the institution and
its banking transactions.
n Among other things, It Is alleged
that certain officers or former ot1- s
GERS of the American Guild have bor-
rowed on various securities large sums
from the Southern Interstate Bank It
is Interesting to note In, this connec-
tion that the guild. whose officers bor-
rowed from the bank. was Indebted TO
the bank on December 81, 1905, to the
amount Of $72.5oo, Mt s per cent. in
terest The American Guild owned 81
per cent. Of the stock Of the Provi-
dent Savings Bank, which was, in
March. 1906 succeeded by the Southern
Interstate Bank.
Grounds for Action.
The bill In equity filed yesterday by
AASA s->AO
G. Sharpley, Dir, G. A. Terrell and T. j.
Terrell. stockholders of the Southern
Interstate Bank, prays tho court to
appoint a receiver for the banl. on the i
following grounds:
The alleged mismnnagemcnt OF
the affairs OF the bnnl1 by it's direc-
tors.
The alleged illegal net of the
directors in turning over all Of the
nssets OF that institution to the
Bank OF Commerce and Trusts for
the purpose Of winding UP the af-
fairs of the Southern Interstate
Bank.
| The plaintiffs claim that the statutes
| OF Virginia provide and prescribe the
:nethod by which a corporation may
wind UP its affairs and be dissolved,
and that tho directors did not pursue
| this method, and did not have tho
fright to transfer the assets OF the bank
| tn the Bank of Commerce and trusts.
The terms on which the Bank of Com.
mcrce and Trusts agreed to collect the
assets Of the retiring bank are as fol-
l.lows: A commission of 2 per cent. on
lccllections OF the gross assets, and, in
laddtion thereto. the salary Of w. Gray
IWattson. cashier Of the Interstate
Bank, to September l., 1907. and $1,000
| for clerical hire and any actual ex-
pcnses incurred in winding up the
affairs of tho branches Of tho Inter
state Bank at Louisa, Mineral, Toanoa
and Powhatan, Va ;sf VI g.$7
II. G. Sharpley plaintiff in the bill,
owns $50 shares Of the stock OF the
Interstate Bank, Of the par value OF
81 each; DR.. G. "A. Terrell owns 800
shares. and T. ]. Terrell 500. Other
| stockholders are permitted to unite
| ,,,i41, +l,. loi N his suit.
Examination Made.
The suit names as parties defendant
1he Southern Interstate Bank, thet
Bank Of Commerce and Trusts ana the
| officers and directors OF the Southern
Interstate Bank. Tho American
/ Guild Is not made g party defendant
| though some of the officers of the
/ bank are also officers OF the guild
| The allegations of the bill are about
as already stated, though the bill 1t
self was only technically filed. the
court permitting the defendants to
have access to tho paper In order to
/ prepare their answer by Thursday.
when the application for q receiver
| viii be argued pro and contra. Mr..
Lamb, counsel for the plaintiffs. had
not a. copy Of the BILL and consented
i that the defendants should be per-
i United to have custody of the docu-
ment filed while preparing their an
4 swer 1t will be really filed In the
i court Tomorrow, though technically
4 filed there now.
i The court also granted permission
4 to the plaintiffs to leHaminr the books
of the bank and q partial Examination
I has been made by Mr.. Lamb. counsel
for the plaintiffs. The interesting
{. phases OF the situation are the results
of this examination.
A Representative of The Times-Dls-
!, patch last night secured statement
from Mr. Hill Montague. counsel for
"A the Southern Interstate Bank. as to
!, the application for rece1,'er for that
Il Iinstitution. Mr.. Montague stated the
conditions of the contract under which
tho Bank Of Commerce and Trusts
has undertaken the collection Of the
assets of tho Southern Interstate
Bank, and emphatcally stated that
tho depositors OF tho bank were guar
, antecd against loss In the trnnsac-
tion, Fre could not speiNs as to the
stockholders nor as to what propor-
ton of their Investment they would
receive in the winding up OF the az
fairs of the retiring bank. He said, In
speaking OF tho matter:
!. $40 depositor OF the Southern
Interstate hank need have the
xlishtes apprehension M to the
result, NO far ns they ARE cOncern-
c,l, us they now have the assets i
of the two banks behind their de-
poslts ana about three times the
security the yformerly had"
/ What MIR. Montague Says.
) Mr.. Montague deprecated the action
!, OF the plaintiffs In endeavoring to So
cure receiver, and expressed the
/, confident belief that the granting OF
tho application for receiver would
i merely serve to retard tho winding up
\ Of the affairs Of the bank and the
/. distribution OF Its assets among the
j lepositors and tho stockholders. He
: further said that about s6o,o0nHof the
s assets OF tha bank were Invested In
!. notes secured by first mortgage on
j, real estate worth twice the amount81
tho notes. and bearing Per cent. In