Los Angeles herald., 1910-08-10
ACTION AGAINST
TRUST COMPANY
Corporation Is Prohibited from
Doing Business Until the
Case Is Heard
COMMISSIONERS START SUIT
Declare Concern Is Unsafe and
Unauthorized in Complaint
Filed in Court
COMMISSIONERS START SUIT

Because Of alleged Illegal conduct Of
its business and consequent hazard to
the public in general and to it's in
vestors in particular, the Los Angeles
Savings, Mortgage and Trust COM
pany, by order of the superior court of
Los Angeles county, cannot transact
business until a hearing of an action
begun against it yesterday has been
had.
This action was taken as the result
of a suit filed in the name of the people
of the state of California, by U. S.
Webb. attorney general; by u. b.
Power, assistant attorney general; by
George Beebe, deputy attorney gen.
eral
1t is directed against the corpora
ton and John H. Foley, w. B. Ames,
c. r. Ames and o. Rey Rule, directors.
upon complaint of j. P. Transue and
Albert Lindley, state building and loan
commissioners.
BUSINESS UNSAFE
According to the application for an
Injunction the commissioners exam
ined the condition of tine corporations
affairs May q, 1909, and found its
business unsafe and unauthorized"
The commissioners declared that the
corporation was and Is in an unsafe
condition and that it's further pro-
ceedngs are hazardous to the public
in general as we'll as to those persons
doing business with 1t.
The directors of the corporation
were warned by the state commission
ers, October 20, 1909, to cease all unsafe
financial practices, but they refused to
obey, it is alleged.
When obedience to the order was
not had, the commissioners, January
5, 1910, notified Attorney General Webb
tifNfNt TNf-
ficials 20 40 as they were told, state
ment of the corporations condition ac-
companying the notification.
DIRECTORS NOTIFIED
At the same time the directors of
the corporation were made aware of
the commissioners notification to the
attorney general and were told to
transact no new business and to retain
all moneys, securities and properties
intact pending the action of Webb.
In the report to the attorney general
it was declared that a trial balance
shown by the corporations officials
was believed to be false one.
A copy of letter to the corpora
tons directors, ordering that $44,559
to the credit of profit and loss, $22,726
to stocks and bonds and $14,559 to w.
b. Ames be charged back to them and
credited to capital stock, was offered
as an eXtllDll OIl the part VI llIC PCOpiCs
1t was also aVerred in an appended
document that the corporation held
$4,000 of the capital stock of Rule &
aons" Unc) and $25, 900 of the capital
stock of the Ames Mercantile agency.
1t was stated that though those con-
Germs were not on a dividend-paying
basis, Ames made the proposition,
which was accepted, that the corpora
tion put back into it's own treasury
$685. ,0vv OF it's own stock and fill orders
therefrom as the other concerns were
ready for payment.
AMEs' STOCK
"Thus," the appended document
reads, "the corporation so far, on that
basis, has purchased back from Ames
$22,746 worth of it's own stock"
1t was shown that the concern was
incorporated with a capital stock of
$4,000 March 10, 1902, under the name
of "The California, Oregon and Wash
ington Homebuilders," which it later
changed to the "Co-operative Home
builders" and then to it's present cog
nomen.
The plaintiff, the people, declared
that the concern is insolvent, and
asked that all officers and every per-
so connected with it be enjoined
from transacting any business for it
until the court hears the case; that a
receiver or receivers be appointed, or
that the business be liquidated by the
election of a board of trustees equal
IL number to the board of directors
within two weeks after the first Mon
day succeeding the date of such order
and decision on the part of the court.
Judge Bordwell issued a temporary
injunction preventing any person con-
r-cted with the corporation, in any
ca1acity, from transacting any Of its
business, pending further order OF
the court.
The Los Angeles Savings. Mortgage
and Trust company is located in room
716 in the Broadway Central building,
at 424 South Broadway.