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Show 1 MERCHANTS BANK I RECEIVER SUES 1 FDR 10,01 . i I SALT LAKE, Dec. 11. Having for its general object a sweeping civil probo of tho affairs of the defunct Merchants bank, particularly for tho past five years, and its specific object ob-ject the collection of a sum aggregating aggregat-ing $800,000 from officers and directors cf the Institution, a suit In equity was !' filed yesterday afternoon in the Third district court by Stephen II. Lynch, as the receiver of the corporation. Failure to neglect to perform their (: duty to the bank and Its creditors, stockholders and depositors; negligence negli-gence In giving proper time and attention atten-tion to Its affairs and management; I permitting the funds and property to J be lost, misused, misapplied and dlssl- IW pated; tho violation and abuse of trust, j confidence and responsibility as offi-I offi-I rcrs and directors; trafficking in ac-r ac-r ronnts of the bank, and the dlsobedl- enco of the rules and principles of banking and the existing banking laws i of the state, are among the charges i which the receiver brings. section of the complaint also sets forth the method by which Jesso D. jpvkes, former slate treasurer, and a number of "preferred creditors" -were ; enabled to withdraw In full amounts on deposit in the bank in the early portion of 1911. f The "actors and participators" In and those responsible for the condition complained of who are named as defendants de-fendants include two former presi-- presi-- dents of the Institution, Harry P. Clark I and John PIngree, and a list of the ; officers and directors under both administrations. Seeks Civil Relief. The suit of the receiver covers a his-1 his-1 lory of the transactions of the bank dating from prior to the month of Jan- nary, 1904, when Harry P. Clark was Ihe president, and comes down to the rondltion as he asserts he found it upon taking possession of the affairs pn July 9, 1918. A criminal investigation investiga-tion of the bank is now under way by a grand jury of the Third district court, which has been at work on those ! aspects of the case for several weeks. The receiver asserts that the depositors depos-itors of the bank will lose $800,000, or about CO per cent, unless civil relief is 'M obtained, and he- asks that an account be ordered so that .the loss mny be pro rated among tho defendants in accordance accord-ance of whatever amount of responsibility responsi-bility each may have had for the alleged al-leged negligence, carelessness and misconduct. mis-conduct. Tho suit was prepared and filed by Cheney, Jensen and Holman as attorneys for Mr. Lynch Directors Arraigned. In the course of the complaint, spe-'clfic spe-'clfic instances of alleged abuses are cited by the receiver. It is charged in one instance that the officers and directors di-rectors of the institution in January and February, 1914, know that the affairs af-fairs of the bank had been so negligent negli-gent and wrongfully conducted that it was in an unsound and unsafe condition; condi-tion; that under the guise of a reorganization reor-ganization an assessment of 50 per cent was levied on tho stockholders, but that nothing was done to safeguard the Interests of those stockholders and tho depositors; that assets were car-1 ried on the books as "valuations which they knew, or should have known, j were excessive," and that at the time ! of this reorganization the directors 'devised and entered into agreements and arrangements for the benefit and protection" of a number of corporations corpora-tions and individuals. "Preferred Creditors" These so-called preferred creditors aro listed in the complaint to include the Deseret National bank, Walker Brothers Bankers, McCormJck & Co., ' bankkers, Continental National bank. National City bank, Farmers and Stockgrowers' bank, Utah State National Na-tional bank, National Bank of the Re-j) Re-j) public, Utah Savings & Trust com- pany, National Copper bank, the First National bank of Ogden, Jesse D. Jewkes, tho then treasurer of the state of Utah; S. A. Whitney, Rodney T. Badger and Hyrum Pingree (deceased), (deceas-ed), as trustees for individual signers j of the state treasurer's bond; W. S. j McCormick, N. W. Clayton, M. S. Browning, R. B. Porter, A. T. Wright, John Spiers, Charles S. Burton, R. T. r Badger, John P. Bennett, Charles B. f Stewart, James G. McAllister, N. T. i MBMT?BMO",ri. rlJL - Porter, George T Odell. Chief of Po-1 lice J. Parley White, John Strlngham, I E. D. Hashimoto, S. A. Whitney, L. B.' McCornick and O. C. Beebe. Loans Bad, Charge Another chnrgo set forth In detail in the complaint asserts that the directors di-rectors "negligently failed and omitted omit-ted to cause true and proper reports of tho conditions of tho bank to be made and filed with the state bank commissioner." The receiver nlso complains that the directors "knowingly "know-ingly and negligently authorized and permitted the withdrawal In the form of dividends of the capital stock and asset," when there were no profits from which such dividends could bo legally paid, it is asserted that John Pingree and George E. Ford, who were in charge of the bank at the tlmo of the failure, were not under any bond for the faithful performance of their duties; that they cither failed to hold or attend directors meetings; that Pingree Pin-gree and Ford individually passed on loans and did not have a proper committee com-mittee to do so as provided by law. Accounts Overdrawn Sundry persdns and corporations are given In the complaint who are said to have been permitted to overdraw their accounts without providing proper prop-er security, these overdrafts existing at the tlmo the bank was closed by the state bank commissioner. Tho persons and corporations named in this connection include James B. Allen, Al-len, -William Allsworth, Howard Aver-Ill, Aver-Ill, Joseph B, Crosby, Dayton Placer 'Recovery corporation, J. W. Duffln, II; IN. Garff, Mrs. W. Albert Hicks, J. H. Johnson, trustee; Kenyon Cafe com-Ipany, com-Ipany, WInnlfred Kerr, W A. Larkins, jS. L. Marsh, David L. McDonald, Mrs. i A. W. McLachlnn, Frances Merrill, Morgan Cafe, Mattle L. Nebeker. R. I W. Nicol, Parrott Bros, company, John i W. Shurtllff, A. D. Smith, E. C. Smith. Mrs. C. E. Spader. J. H. Stallings, John H. Stampolls, Mildred Steelman, F. A. Strain, George W. Walker, H. W. Walker, R. W. Wanlace and E. D. White. Says Risks Unsafe Another section of the complaint cnarges mat me directors and officers "allowed money to be loaned to persons per-sons and corporations who were not safe risks, without any or adequate or proper security, or security in proper pro-per form." This list of individuals ;and companies as listed in tho complaint com-plaint and said by the attorneys in the case to comprise loans outstanding outstand-ing at tho time of the failure, include A. S. Brown, J. H. Horr, Frank A. Hammer, C. E. King, Esther E. and Ida A. Lawton. R. W. Little. Thomas McClatchey, D. C. Mclntyre, W. II. March. John W. Shurtllff. Smith & Sons, W. H. Stout, Franklin E. Smith. Carlo Van Puello, Universal Metallic Tie company, G. B. Cauffield, Chapde-lain Chapde-lain Drug company, Edward J. Mar-gretts, Mar-gretts, L. S. Moore, Newman Sheet Metal works, J. A. Quealy, W. E. and J. K. Boruff, E. J. Broberg, Quincy Land & Lease company, R. C. Bog-nowri, Bog-nowri, Caroline Seymour, L. A. Skcen, Cortez farm, Fred G. Heath, Sarah Kahn, Wellington Town, T. E. Wood, James L. Chesbro, Utah Concrete Pipe company, R. B. Garff and the Silk shop. It is charged that the directors "negligently "neg-ligently permitted increased loans and an undue amount of money to be loaned loan-ed to persons and corporations already Indebted to the bank and to persons and corporations who were in an unsafe un-safe financial condition." This list is given to include the Butte-Salt Lake Investment company, the Kenyon Hotel Ho-tel company, Utah Packing & Provision Provis-ion company, David Mattson, Wasatch Woolen mills, Rose Pickle and Vinegar company, Sullivan Plaster Block company, com-pany, N. P. Hansen, Bert L. Smith and the Taylor-Richards companj. |