Evening star., 1918-02-20
SOUTHERN BUILDING .
OWNERSHIP DECIDED.
D. c. Supreme Court Auditor
Says II Belongs to Stock
holders of National Fire.
REPORT RAPS REALTY co.

The Southern building, at 18th and II
streets northwest, the equity In whicn
II valued at 100000. belongs to the
stockholders Of the First National FIRE
Insurance Company and not to the
Southern Realty Corporation, according
to the view taken by Herbert L. Davis
auditor Of the Supreme Court of the
District of Columbia, in his report
fled in court today on the question OF
the dissolution Of the insurance COM
pany.
Auditor Davis sharply criticises the
methods adopted in forming the realty
corporation and suggests that tho evil
dence taken before him discloses "the
glaringly apparent object of the realty
corporation to act as cover for the
abuse of power and of acts clearly sub
versive of the rights of the stockhold-
osp in the insurance company"
- xAother part of this report Mr..
Davis, speaking Of the transfer of the
title to the Southern building to the
corporation composed of some of the
officials of the insurance company,
says:
'It is clearly apparent to the auditor
that the realty corporation was used
merely as mask for the insurance
company throughout the various trans
Operated on $1,000 Capital.
The realty company was organized in
Delaware with a capital stock of $1,000
aud took title to the Southern build
ing, issuing bonds of 100000 to the in
surance company for it's equity. The
auditor finds that the bonds are not to
be counted In the assets Of the corpora
ttcu seeking dissolution, but are to be
replaced by the equity in the building,
subject to the first trust of 100000
Philadelphia.
Mr.. Davis recommends to the court
that the dissolution of the Insurance
company be effected. He estimates the
296.e6, and nxes its liabilities at 81, ,0O7,-
4i9.42.: These figures are dependent
upon the contingency Of sale Of the
s?Ythesn stn @ building for not less than
The notion Of the insurance company
tn using Its funds for the creation Of
re. shs really corporation: the auditor
separation in the purchase Of any
stock in any other company. The
auditor recommends, therefore, that ap-
uroerfate legal steps be taken for the
sSC0ISty oi tne IuhuS. Tho sum so al
.1sgsd to have been diverted exceeds
1880. according to the auditors re-
rhs finances Of the corporation pend
fng dissolution are In the hands Of
tempornry receivers. John Lewis Smith
ana Edward J. walsh Of Washington
and William Sohmef of New York city.
isaats and Liabilities.
Tho summary Of assets and liabilities
- the auditors report follows:
Appraised value Of equity in the
1Oathern building. $500. 200: other real
estate. 3s.zos.21; mortgage loans, $685.
100; bonds. sss.157.s7; cash In, once, and
2 banks. $It, 1850; agents balances,
$lS3,4ze. u: bills receivable, $1l. .l0s 81 /;
aue from Carusf and Dudley. trustees,
eSksS: due from Southern Surety Com
Yeny. es1s.40: rs-insursnce recoveries
rsss.v.bls. $500: interest due on
mortgage loans. (past duel, te15; in
tersst accrued on mortgage loans, N,-
HISS; interest due on bonds. e57s; in
tefest accrued on bonds, $1.i18.io; fur
nftufe and fixtures, $2.s%s.45; maps, (es-
timated). appraisal being made, 1880;
oompanies which have not been charg-
- ~ yet. $S.o0e: estimated amount Of
Reinsurance racovariAa receivable.
$4,000; total. S1.2s3,ass.sS
Liabilitles-Bills payable. $4,000;
accrued interest thereon. $411.73; un-
yeid adjusted IRE losses, tss.47Z1s: un-
tax on prsmiums. $4,000; capital stock.
311I.Sss.Se; Charles A. Ksigwin and E.
1Iltsn Jackson, $1,000: q. Hilton Jack
een. S3eo; auditor's fee. si.z5o; total.
Nyee7,l1e.49.