Arizona republican., 1913-07-23
BANK SUES ITS
 Ex-PRES|DENT
Union Bank & Trust Be gins Suit i'll the Federal Court Against J. K. Ten nant for Alleged Misrep- resentatiOn and Fraud

i Alleging fraud and misrepresenta- 1 ton, the Union Bank and Trust com pany of this city, yesterday filed a suit in equity in the federal court for the district of Arizona, against l J. K Tenant until recently presi- dent and member of the board of
 directors of the bank. It is alleged
 in the petition that in q certain tram saction consummated between the de- l fcndant, Tcnnant and the plaintiff 1 the Union Bank and Trust company, | the defendant presented a bill for | and obtained certain securities in sat ] isfaction thereof in the sum of l $43,106.1S. The suit is brought for i the purpose of forcing the defendant 1 to return the securities of the bank 1 to the amount stated, and in addi- 1 ton a temporary restraining order and temporary injunction is asked for to prevent him from disposing of those certain securities or in any way damaging the interest the bank claims in them The affidavit to the com | plaint is signed by John P. Orme, vice president of the Union Bank and Trust company, and the suit is insti- 1 tuted upon the instructions of the bank by the firm of Sloan, Seabury and Westerfelt of Phoenix.
 For some time past there have been rumors on the street that something was happening in connection with the affairs of the Union Bank and Trust company that would probably lead to a further reorganization of the con cern- It had been re-Organized twice during the past year, once when J. Fred CIeaveland was president. when it was made into million dollar trust and mortgage company, and again when Tennant assumed control, some time after, when the bank resolved to enter the lists of legitimate bank ing and make a bid for the business
 of this section. Tn both of these re- organizations the holdings of the
 stockholders were in no way inn
 paired. according to common know ledge neither is it believed for an
 instant that the present matter will
 have any effect whatever on the abil-
 ity of the bank to continue its busi-
 ness of legitimate banking. which has
 been growing rapidly and has been
 fully passed upon by the bank exam
 iners.
 According to the petition filed in
 the court yesterday, the matters over
 which the suit is instituted came to
 light prominently at a meeting of the
 board of directors of the bank held
 on May II last. At that time the defendant Tcnnant presented an ac- count for allowance to himself for the amount of $43,o00 odd, and cX
 plaincd that is was for charges and
 expenses incurred in selling 1903 shares of the stock of the company. and that the money was paid out
 without profit to himself. He eX- plained further, so the allegations of the complaint go. that he had on January 20, 1913. entered into con tract with the Union Bank and Trust company to sell 20OO certain shares of the company at a rate that would net the company $12O per share. but that in the sale of the stock above mentioned he had voluntarily turned over to the company the equivalent of $1GO per share. He believed there fore that the amount was justly due him because he had turned in a greater amount than was agreed upon.
 By resolution the directors of the bank then Instructed Directors C. F. Mullen and W. R. Rosa to take from the assets of the bank not cash for the amount. but securities equivalent thereto which was done. It is now alleged upon further information Ob- | tained by the directors, that when 1 Tenant made the statements relative to these matters to the directors he knew them to be wholly false and untrue but they were relied upon by the directors because of the fact that Tennant was president of the com pany, and a brother director. as well 1 as a large stockhoIdr in the com pany. And it is now alleged that al no time was the defendant required | to expcnd any of the money and in fact had not spent any such amount. |
 Tn his capacity of salesman of the l preferred stock of the company, he being under contract to sell 2000 shares of it, he acting as independent contractor and not in capacity as president and director of the bank, | organized without any assistance from 1 the bank a corps of saIesmen, who l disposed of what stock was sold, and | that these men were not to be paid | from the funds of the bank but that | Tennant was wholly accountable to l them for the remuneration for their | services.
 The statement is also made in the 1 complaint, that Remnants statement 1 that he had entered into q contract l with the bank to sell the 2000 shares | of preferred stock to net the company 1 $12O is also false, that there is no such contract made on January 20 l last or any other time; and the other | statement that he had turned over | an equivalent of $16O per share as sale price for the stock, is | also false. and he knew it. but the bank alleges that he sold the stock at S20O per share in doing so making a large profit for himself
 When all these things and others came to the knowledge of the majority of the directors, they held a meeting on July last and rescinded the reso Iutfon, and repudi9ted the settlement and authorized the bringing of the suit against Tenant
 The reason given whereby Tennant had so much authority in the opera tions of the bank. the complaint l