The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1907-05-24
JUDGE GR|NNAN
DENIES \ | RECEIVER {: } Il |:.R:||
Application Of the Stock.
holders Of Southern In-
terstate Bank Refused.
BANKS OFFICERS
ARE GEM SUREDs
Bill Of Plaintiff Charges Gross.
Mismanagenent and Alleges
That Galeski, Crunap and
| Others Are Insolvent and 4
Put Up Insufficient Sc
curities as Collateral.

dS sSOllC III oil. ~
After hearing argument by counsel
for all parties concerned for seven
hours yesterday on the application of
Attorney John a. Lamb, for an In
Junction and receivership in the case
OF the Southern Interstate Bank and
others, Judge Daniel Grinnan, In the
Chancery Court Of the city Of Rich
mond, last evening at 1880. declined to
grant the application for q receiver or
to restrain the execution OF the con-
tract between the Southern Interstate
Bank and the Bank Of Commerce and
Trusts.
Immediately, upon announcement Of
this decision Attorney Lamb an. an
nounced that he would this morning
apply to either Judge Keith or to
Judge Cardwell, Of the Supreme Court
OF Appeals of Virginia, for the appoint.
ment OF a receiver and the award OF
an Injunction order. This he may do
OF right, and he has the papers ready
| to make the formal application. Ans
other legal battle will ensue in this
Tribunal in which the argument OF
yesterday will be repeated in the main
For the Good OF All
The decision of Judge Grinnan to
deny the application for a receiver was 4
on the grounds Of public policy and
eXpediency, 1t appearing to him that
tho interests Of the depositors and
stockholders of the Southern Inter-
state Bank would be best subserved by
such action. He intmated.3 however,
| that there was some question as to the
| validity OF the contract by which the
directors OF the Interstate Bank trans
| ferred It's assets to tho Bank Of COM
mercc and Trusts. Judge Grinnan,
speaking Informally from the bench.
i expressed himself in strong raproba-s
ton OF the action Of the directors OF
1 the Southern Interstate Bank, but did
i not desire to be quoted. He based his
action In denying tho receivership4ap
/ plication upon several precedents and
upon his belief that the liquidation OF
the affairs of the defunct bank would
be expedited and the interests OF ALL
parties best conserved by permitting
| the Bank Of Commerce and Trusts to S
execute the trust 1t assumed to wind 4
up the affairs of the Southern Inter-
state Bank.
1t was Ghflcult to catch the precise
language of the court in announcing
his opinion. his voice being drowned
by the noises OF the streets to such an
extent that the attorneys interested
had to lean forward over the bar to
catch his words.
Sensational Allegations.
It was long and tiresome day Of
Inrgument-first upon the demurrer Of
i the defendants to the bill OF the plain
tiff, and later upon the application on
its merits Without specifically sus-I
tanning or overruling the demurrer,
the court determined after the lunch-i
con recess to go on with tho argu-:
ment Of the case upon6its merits. The
Iplaintlrf had filed an amended and
i supplemental bill at the opening OF the.
i proceedings, making even stronger and
! moro sensational the allegations of
I tho original bill, and vigorously at,
tacklng the value Of the securities on
3 which large sums We're loaned. by tho
I bank. At the afternoon session the
Z attorneys representing the parties de-,
fendant and those collaterally inter-
+ ested filed answers to the bill and the
: amended bill Of the plaintiff.
These answers We're on behalf Of the
4 Southern Interstate Bank, the Bank,
& of Commerce and Trusts. S. Galeski,
4 Pew. T. Crump J. B. Montgomery and
others These answers wero general
denials Of tho allegations of the bill
and amended BILL specific denials of
certain specific allegations and protest
against the filing OF certain charges
contained therein.
The Bank OF Commerce and Trusts
in It's answer made 1t clear that it
/, was not there to oppose the appllca-
ton for n receiver, but was ready to
) be released of its trust If the court
i so ordered. 1t was simply there be-
/ cause 1t had been made a party de-
. fcndant and to state It's attitude.
/, ArrnlEns the Directors. s&
The amended bill of counsel for the
a plaintiff Is a vigorous and scathing
document, sharply arraigning the dl-
rectors OF tho Interstate Bank and
condemning In unres trained terms their
9 management Of tho affairs of the bank.
: The attorney, in his bill. charged
: that s Galeski was insolvcnt. and that
] he had alienated his property by trans
t fer to his wife. without any valuable
: consideration and with intent to de-
: fraud, He charges further that Judge
S Beverly T. Crump. former vice-supreme
. governor of the American Guild and a
creditor OF the bank to the amount of
I more than $1,000, was insolvent. and
! that he had borrowed money on securl-
! ties which were worthless at the time
" lielT cFf WGT6N certainty OF
! Very little value, and similar nllega-
tions are made concerning Joseph b.
: Montgomery, supreme treasurer Of the
: guild and e. director Of tho Interstate
Bank In the course OF his argument
Mr., Lamb asserted with emphasis that
: no solvent mnn-and, he added no
honest solvent man--would offer such
securities to reliable and conserva- :
: tive bank for tho loan OF money. IIn
!. charged that much of the original cap-
ital stock of the bank consisted of
| securities OF certain oil companies.
| which We're acquired In the assets Of
: the Provldent Savings Bank. taken
, over by the Interstate BanS. "
e The bill charges that the bank dis
rectors had grossly mismanaged its at-
: fairs, not only in lending money on
, se!ssuls!t!es rof 3ns!ga!Aeapt OF douhtt1