The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1907-12-25
Law Makes the Money OF
Estates Still Unsettled
Preferred Claims
ANOTHER ASSET CUT
Proposed Proceedings Will
Leave Much Less for
Rehabilitation

The meaeer list of assets of the
shattered California safe deposit and
trust company available for the settle
ment of depositors' claims probably
will be depleted still more through a
suit to be instituted within a week or
two to foreclose mortgages now held
against the cornpany's land and build
ing at California and Montgomery
streets. The action is to be based on
what is alleged to be preferred
claim, covering funds deposited with
the institution by the last three public
administrators, and if successful will
Tighten the asset value of the bank
property by approximately 100000.
Preparations are now being made by
attorneys representing Public Admins
traitor Joseph A. Stulz and his two
predecessors to bring suit for the fore
closure of two mortgages given by the
defunct bank to the state treasurer as
security for. funds held in trust under
the provisions of a statute enacted in
1921. The mortgages are both FIRST
liens and are for 100000 and 5000, zoo
respectively. John Earnham and NJ. j.
Hynes, former public administrators,
have Joined Stulz in order to protect
funds belonging to estates which has :.
remained fl probate since the time Of
their administrations. and will be par
ties to whatever action is Instituted to
force a settlement of these claims
FUNDS SPECIAL TRUST
The funds deposited with the Cali
fornia safe deposit and trust company
by the public administrators constitute
a special trust, in addition to about
$4,000 in specific Individual trusts
held by the bank. The latter do not
come under the provisions of the law
constituting a preferred claim, which,
it is alleged, applies to the funds held
for public administration. The exact
amount OF the latter funds cannot be
determined until a complete report is
made after the books of the defunct
bank have been thoroughly examined,
but it is roughly estimated that, there
remained on deposit at the time OF the
banks failure about $4,000 to the
credit of Public Administrator Stulx
about $4,000 to the credit of former
Public Administrators Hynes and few
thousand to the credit of former Pub
lie Administrator Farnham. "A detailed
report on these deposits is now being
prepared and will be submitted to the
attorneys in charge of the matter in a
few days.
Under the act of 1891, creating trust
companies, it is provided that the pub
lie administrators may deposit funds
with such company instead OF with
the county treasurer. and that these
funds shall be protected by first mort
cages or other securities of equal value
deposited by the trust company with
the treasurer of state. Funds deposited
by the public administrator may only
be Withdrawn upon order of the public
administrators, countersigned by a
judge of the superior court, and it is
on this provision that the contention is
based that such deposits are subject to
preferred claim.
READY TO BEGIN SUIT
Attorney Edward ]. Lynch, repre-
senting Stulz, and John j. o'Toole.
counsel for Hynes. are preparing the
suit, which is to be begun Immediately
after the holidays. They contend that
as the funds deposited under the stat
ute referred to are subject to with
drawal only under order Of the court,
and are specially protected by the
mortgages on file with the treasurer or
the state, the preferred claim is consti-
tuted. Under the construction given.
the law in various former decisions
any trust held in the form OF cash un-
der direct order of court-is a preferred
account, and 1t is this feature that dis
tinguishes such accounts from those
placed on deposit personally by the ad-
ministrator or executor of an ordinary
trust.
The California safe deposit and trust
company has been the depositary for
funds held by public administrators of
tuis CITY anu couHIy praStlcaliy from
the time of its organization, and with
one exception all public administrators
of recent years have kept their funds
on deposit there. The attorneys hav-
ing the matter in hand said yesterday
that the suit for a foreclosure Of the
mortgages against the building and
site OF the ruined institution will be
Continued on Page ?, Middle Col. ?.