Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-04-16
Testimony Refused Creditors
on Ground 1t Might In
eliminate Him.
HOLDERS OF NOTES
HEAR SALE QUESTIONS
81, 25O, 900 Original Trust Is Dis
closed by Attorney
Jackson.

himself. Edmund D. Rheem, vice presi-
dent of Swartzell, Rheem g. Hensey,
refused to answer number of ques-
tons dealing with the sale of the
Shoreham Office Building at creditors
examination today.
The examination of Rheem by the
creditors, resulting from the failure of
the firm, was held in the companys Of
fees on Fifteenth street. Rheem was
questioned in the presence Of notehold-
ers and number of former employees by
Attorney E. Hilton Jackson.
The attorney confined his questions
to the sale of the Shoreham Building
by Swartzell, Rheem e. Hensey to the
Shoreham Investment Corporation. Sec
rotary of War Patrick ]. Hurley and
Joseph Cromwell, Oklahoma oil man,
are stockholders in the latter corpora
ton.
S2,250,OOO Original Trust.
In the early examination, Attorney
Jackson brought out that there was an
original trust of $2,25000O on the
Shoreham Building. On July 16 or II,
1880, officers of Swartzell, Rheem g.
Hensey took steps to have this trust
released and to substitute trust held
by the Metropolitan Life Insurance Co.
AS ap art of this proceeding, how
ever, it was sought to have a special
account established in the Riggs Ma
tfonal Bank to pay individuals hold
ing notes under the original mortgage.
1t was understood the New York Title
& Mortgage Co. agreed to guarantee
title to the property to the Shoreham
Investment Corporation after this step
had been taken.
About $1,50O,0O0 Advanced.
Mr.. Rheem testified that the title and
mortgage company advanced approXi-
mately 81 $780, 600 toward this account
The balance, $7S5, 900, was placed in
the account by Swartzell, Rheem g.
Hensey, he said. 1t was brought out
that the mortgage house borrowed
money from the Riggs National Bank
for this purpose
After the special account, which
totaled $2,341, 645.80. had been opened,
title to the property was transferred.
Mr.. Rheem denied that the original
trust was released of record before the
money to pay off the trust had been
placed in special account.
Bank Official Called.
George Vass, vice president Of the
Riggs Bank, was then called to intro
duce bank records dealing with Ito
transaction.
Were any of the multitude of notes
paid out Of this deposit?" Jackson
asked.
NO" Rheem replied.
Jackson then asked a question de-
signed to show that Rheem, or Swart-
zell, Rheem 81 Hensey Co, borrowed
money from the Riggs Bank to place in
the special account for the benefit of
the note holders so that the sale might
be consummated and that on the fol-
lowing day check for 100000 wss
drawn on this account to pay off obli-
cations Of the firm at the bank.
In view of the criminal prosecution
threatened against Mr.. Rheem, I advise
him not to answer that question" Leon
Tobriner, Rheems attorney, stated.
Referee Fred j. Eden then instructed
Rheem that he was not bound to an
swer a question which he honestly
thought night tend to incriminate him
Would your answer to that question
have tendency to incriIninate you?"
the referee asked
Yes" Rheem replied
Answer Again Declined.
Suppose you borrowed the money
for the establishment of a special ac-
count for the benefit of the note holders
and then drew out $780, 900 to pay off
company obligations-in that situation
did the company have enough money
on hand to pay of the trust?" Jackson
demanded.
Tobriner again interrupted to advise
his client not to answer the question.
Referee Eden said he die not see how
an answer to the query could have a
tendency to incriminate Rheem
THE question is leading up to a
material one. which might show con-
version of the money in the special
account" Tobriner answered. Rheem
stood upon his constitutional It's and
refused to answer
The next question was: did the peo-
pie to whom you sold notes und-r the
original trust get any part Of the
100000 Rheem again refused to an
swer on the same ground.
Attorney Jackson, who led the ques-
tioning today, has filed suit in Dis
trict Supreme Court in an effort to re-
establish the original trust of the prop
erty. A number of his questions were
phrased In an effort to show that the
Metropolitan Life Insurance Co. was put
on notice when it advanced money for
the substitute trust that the original
trust had not been paid in full
Rheem testified that he owned 423 of
the 675 shares of stock in the SWartzsll,
Rheem & Hensey Co.