Evening star., 1934-02-02
SURETY COMPANY
WILL PAY 100000
TO PARK SAVINGS
Order Against Underwriters
Based on DefaIcations
Laid to Mcneil,
FURTHER FIGHT SEEN
ON $4,000 PAYMENT
Money Will Go Into General
Fund to Be Paid Eventually
to Banks Depositors.

to Banks Depositors.
Based entirely on losses to the Park
Savings Bank, due to the alleged de-
falcationS of Benedict M. Mcneil. for
mer cashier of the bank. a claim for
SlOO 900 against the American Sur
ETY. Co. of New York has been ap-
proved by District Supreme Court
and was expected 10 be paid by
check today
The funds will be placed in the
bank in charge of the receiver, John
F. Moran.
This payment of 100000 is in full
on the so-called primary bond of the
American Surety Co., taken out in
| 1923, which guaranteed the fidelity
Of officers and employees Of the bank.
Will Go to Depositors.
This money goes into the general
assets of the bank ultimately to be
distributed to depositors on a ratable
basis. Owing to the complex status
| of the bank, however. there Is no
means of predicting when this dis
| tribution of dividends can be made
The court action was taken by JUS
tice Daniel w. O'Donoghue in motions
| court He signed so-called order
! to compromise claims" This petition
under authority of the court author
lied the receiver to accept the $780,
900 from the surety company, but left
! open the question of collection on
another bond written by the same
! company for the same purpose known
as an excess bond" in the sum of
s5OO00.
The surety company is understood
! to be disputing the right of the re-
ceivers to collect this additional $50
| 900 and the matter is to go to court.
Payment without Prejudice"
Justice ODonoghue in his order de-
| clared that acceptance of the $780,
900 shall be without prejudice to the
| right of the receiver of said bank to
| institute legal action, pursue his claim,
and enforce all rights in court of
; competent Jurisdiction on behalf Of
said bank under said excess bond"
| 1t is in the effort to collect under
this excess bond that the receiver will
claim payment for the losses caused to
| the bank by Robert S. StunZ, former
! vice president of the bank, who killed
| himself in March when the bank
failed to receive a license to reopen.
| Mcneil, the former cashier, on the
basis of whose alleged defalcations the
100000 was recovered. is under in
dictment along with three other per-
sons, charged with conspiracy to vio-
| late the penal code. He was indicted
June %, 1888, and appearing July IL
he made bond in S5,000
The charges of defalcations by Nc
| Neil are outlined in detail in the petit
ton to compromise claims filed in the
court by the banks receivers.
Seven Separate Claims
The petition sets out that Mcneil
! was defaulter while an employe and
acting as said cashier of the said
bank" The conservator in charge of
the bank, it is pointed out in the petit
| ton, made claim to the surety COM
pany for losses because of such de-
! fault and the dishonest acts" of Nc
Neil
| Among these claims, disclosed pub
! licly today for the first time, were
r
accounts, totalirg more than 100000.
| These claims included fictitious ac-
counts in the names of the following
I persons and amounts resulting in
! cash losses to the bank: George A.
! Williams, S44,436.15; Robert P. Smith,
s19,300; Albert Hubschman, $4,000:
Mrs. F. L. Harland, $500; Mary E.
Mann, S73750
|
was another claim for s26.030. These
claims so far were totaled as losses
sustained S98,00395.
Charged Against Loan.
'The remaining $4,000 of losses"
/ said the petition, can be charged
| against Fanny Cunningham loan
/ dated December 26, 1928. which was
! Endorsed by Alexander Mcneil and
! being in the amount of $500"
J The primary bond which was to be
paid today was written and signed
/ in 1928, but the excess bond for $50
| 600 over which there still is a dispute
was drawn up and signed in 1881.
Stlpulations Of fact are now being
| prepared to present the claim for this
excess bond.
| 1t was understood that the defense
| raised by the surety company related
to the alleged termination of the cor
,, porate life of the Park Savings Bank.
, The Depositors' Committee of the Park
Savings Bank is in court with a COM
plicated case involving both equity
| and law suits based on the claim that
the Park Savings Bank charter ex-
! pired in August, 1929. and that the
institution thereafter was operated as
| partnership
The contention of the Depositors'
Committee, in which it attempts to
establish the liability of directors for
total losses of more than S2,25O,0OO
attributable largely to Stunz, is now
before Justice Jesse C. Adkins in Dis
trict Supreme Court.
The surety company litigation Is
being handled by j. Bruce Kremer
and George B. Springston, counsel for
the receiver. The action in compro-
missing the claim by receiving first the
100000 and suing for the excess bond
was approved by the controller of the
currency, who was represented in this
case by F. G. Await and Charles E.
wainwright