Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-02-16
SHOREHAM BLDG.
TRUST DECLARED
ILLEGALLY ENDED
NotehoIderS Ask That Re-
lease of S2,25O,00O Paper
Be Voided.
SWARTZELL AND RHEEM
ARE NAMED IN SUIT
Action Seeks Foreclosure of Orig
inal Obligation for Failure
to Pay Interest.

The Shoreham Building property at
FIFTEENTH and II streets was drawn to-
day into the legal maelStrom growing
out of the bankruptcy of the invest
ment brokerage firm of Swartzell,
Rheem g. HenSey. Charges are made
that Luther A. Swartzell and Edmund
d. Rheem, trustees. under a trust Sc
curing an issue of 2,790 notes. totaling
$2,250,000, illegally released the trust
when not more than $4,000, 900 had been
paid into their Office on an attempted
ref1nancing of which plaintiffs had not
been advised and to which they had
not aSSented. The trust required that
release should be made only after notes
and interest had been satisfied in full.
Through Attorneys George Curtis
Sh1nn, E. Hilton jackson and william
E. Richardson, the District Supreme
Court is asked to declare the release
void, to re-establiSh the trust for ST.
100000 and to foreclose the original
trust for failure to pay interest due
thereon February /.
The suit was filed by Elbridge p.
Rhoderick and Martha " Rhoderick,
1419 r street, and Henrietta w. Moore
OF Atlantic City. The Rhodericks own
notes totaling $4,000 and Mrs. Moore's
notes aggregating $500. Named de-
PENDANTS besides Swartzell & Rheem
are the Shoreham Investment Co., John
H. Holmead, j. Newton Brewer, trustee;
the Metropolitan Life Insurance Co.,
Clarence Dodge and Martin r. West.
trustees; Harry Wardman, Thomas P.
Bones, Swartzell, Rheem g. Hensey
Co.; Henry p. Blair and Julius I.
Peyser, receivers.
The court is informed that Wardman
and Bones being owners of the prop
erty August /, 1928, encountered it with
a first trust of $2,250, 900, payable in
i've years, and later transferred the
property subject thereto to Edward L.
WiSsman and Fred H. Van Vranken,
who July 9 last decided it to the Shore
ham Investment Co. On July Is the
latter corporation made a trust to
Dodge and West securing the Metro
polltan Life Insurance Co. $1,000, 900,
which note is now held by the insur-
ar1ce company, it is stated. A second
trust was recorded for $500, 900, making
the total refnancing fund only 81, 0OO,-
900, yet, 1t Is claimed. the trustees at
tempted to release trust for S2,250,0 900.
MRS. Lula H. McMaSter, Silver Spring.
Md, through Attorneys Colladay, Nc
Garraghy, Pettus g. Wallace, today
asked the District Supreme Court to re-
establish the lien Of trust for $3.50 900
made by the Westchester Development
co. on one OF its new apartments, and
which was released by Rheem and
Swartzell when a new loan for $1.l85.-
600 was placed on the property, secur-
ing the Metropolitan Life Insurance Co.
On receipt of notice from Swartzell.
Rheem g. Hensey that the note held
by her would be paid, her husband pre-
sented the note to Rheem, Mrs. Nc
Master says, on the Saturday preceding
the fling Of the bankruptcy proceeding,
and was told that the vault had been
locked and payment could not be made
then.
ENJOYMENT Is Sought.
The Westchester Development Co.
has pending in court an application
TO enjoin the receivers of the bankrupt
frm from surrendering any notes Of
the corporation TO any one claiming
under the trust which had been released
when the loan was refinanced. Mrs.
McMaster holds one of these :,otes for
$4,000 and asks the removal of Swart-
zell and Rheem as trustees and for the
foreclosure OF the original trust for
$3.50 900.
The Real Estate Title Insurance Co.
Is made party TO the suit and is
charged with knowledge that the notes
had not been paid before The release
was fled