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TRUST COMPANY IN TROUBLE. Atlanta, Ga., March 31.-The Guarantee Trust and Banking Company today was ordered by Judge George L. Bell of the Superior Court to appear before the court April 15 to show cause why a receiver for the company should not be appointed. Action by Judge Bell followed the institution of two suits against the company by two stockholders and
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# RECEIVER IS # ORDERED IN # GUARANTEE # FIGHT Trust Company Loses in Superior Court, but Will Carry the Case Higher. Judge John T. Pendleton, of the Superior Court, ordered a receiver appointed for the Guarantee Bank and Trust Company Wednesday afternoon. Before this action was taken attorneys for both sides had agreed to draw up a supersedeas order carrying the celebrated case to the Supreme Court. Pending action by the Supreme Court, Judge Pendleton ordered that the case remain in statue quo. Following the Superior Court decision, attorneys in the case began immediately drawing up papers for a rapid execution of the case before the Supreme Court. It is likely that the Guarantee Trust case will go before it in a short time. If Judge Pendleton's decision is sustained in the higher court, the case will be returned to him for appointment of a receiver for the Trust Company. If the Superior Court decision, however, is overruled, the case will be sent back for a new trial.
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# RECEIVER IS ORDERED IN GUARANTEE FIGHT Trust Company Loses in Superior Court, but Will Carry the Case Higher. Judge John T. Pendleton, of the Superior Court, ordered a receiver appointed for the Guarantee Bank and Trust Company Wednesday afternoon. Before this action was taken attorneys for both sides had agreed to draw up a supersedeas order carrying the celebrated case to the Supreme Court. Pending action by the Supreme Court, Judge Pendleton ordered that the case remain in statue quo. Following the Superior Court decision, attorneys in the case began immediately drawing up papers for a rapid execution of the case before the Supreme Court. It is likely that the Guarantee Trust case will go before it in a short time. If Judge Pendleton's decision is sustained in the higher court, the case will be returned to him for appointment of a receiver for the Trust Company. If the Superior Court decision, however, is overruled, the case will be sent back for a new trial.
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APPEAL CERTAIN IN GUARANTEE TRUST TRIAL If Bankruptcy Action Is Pressed, Suit Will Go to United States Supreme Court. Attorneys for plaintiffs and defendant in the Guarantee Trust and Banking Company case Thursday are trying to reach an agreement as to who shall be named receiver for the corporation, and as to the status of the business pending final outcome of the litigation on appeal. Judge Pendleton will issue an order when the lawyers reach an agreement. Prospects are this will be late Thursday. When the suit was started holders of investment bonds of the company were notified of the state of affairs and given their choice of paying installments as they became due. or holding payment pending adjudication, their bonds to remain in the same status as at the beginning of the legal action. Appeal Is Certain. The court's order Thursday is expected to determine just how far the company can proceed in carrying on its business, besides naming the receiver. Appeal is certain and efforts will be made to get decision quickly from the Supreme Court of the State. Meanwhile there is an action in involuntary bankruptcy pending in the Federal courts, and this may. be pressed. If so, the case may go to the United States Supreme Court. The case has been fought bitterly since trial began May 5. Attorneys say there is every prospect of a continued lively contest through the upper courts. Bondholders Few Here. Holders of the investment bonds are said to be comparatively few in Atlanta and in Georgia. Most of the sales have been in Northern States. It is these widely scattered investors who are most interested in the outcome. Briefly, the corporation offered a bond, sold on installments, yielding a most attractive rate of interest. Allegations of the plaintiffs, upheld by the lower court yesterday, are that an insufficient reserve was carried against these bonds; that investments of the corporation were not sound, and that the very origin of the concern was irregular in that owners of the old company, which the Guarantee took over, profited unduly by the sale.
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GUARANTEE TRUST CAN MEET DEBTS Insolvency of the Guarantee and Trust Company, because it has not a sufficient reserve fund, is the "solid ground" upon which Judge John T. Pendleton rests his decision against that concern, according to the order he has entered in the case. He states that the company has sufficient assets to cover its liabilities, but that it does not meet with the requirements of the act of 1904, which requires that there be enough assets invested to equal the reserve fund with 3 1-2 per cent interest. Many of the investments of the Guarantee, he says, are "in the teeth of the act of 1904." The concern is trustee of the reserve fund in every sense of the term, he says, and while legal title to this fund remains with the company, the beneficiary interest is with the bondholders. Part of this reserve, he holds, has been misappropriated. He named John D. Robison, of A. M. Robinson Company, receiver, but this is merely a nominal appointment, as the receivership is held up pending the filing of a bill of exceptions, and then pending the outcome of the case in the Supreme Court. The order of the court restrains the company from carrying on its business, other than conserving assets.
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2 HELD FOR FRAUDS IN BANK S. E. Smith and H. S. Miles Give $11,500 Bond Each-One Count Felony Charge. S. E. Smith, president of the Guarantee Trust and Banking Company, and H. S. Miles, secretary and treasurer. were indicted by the Grand Jury Wednesday on charges of declaring false dividends, buying back their own stock and doing business without a proper license. Five indictments were drawn against each of the men. Warrants for the arrest of the two men were served upon them by Deputy Sheriff Plenie Miner and they were taken into custody at 1:35 o'clock at the banking house in Alabama Street. Smith and Miles went to the office of Solicitor General Dorsey soon after the warrants were served on them by Deputy Sheriff Miner and sought to get a reduction of their bonds from $11,500 each. They represented this as excessive. Of the five indictments, two are for felonies, the bonds being fixed at $5,000 on each of the felonies. The remaining three inictments charge misdemeanors, on which the bond was fixed at $500 each, totaling $11,500 for each man. Refuse to Talk of Case, Neither man would make any comment on the action of the Grand Jury when seen by a reporter. The action of the Grand Jury is in the nature of a sequel to Judge John T. Pendleton's appointment last week of James Robinson as receiver for the company. An appeal was taken to the Supreme Court by the company. Attorney Frank A. Hooper has been designated as prosecutor in the case. owing to the disability of Solicitor General Dorsey. The Solicitor was disqualified from the fact that his law firm is acting as counsel for the petitioners in the case. Long and Bitter Fight. The return of the indictments is another chapter in one of the longest and most spirited fights in the recent history of the Fulton County Superior Court. The case was instituted by Matthew Delaney and others and the trial was entered for May 5 with the plaintiffs charging that the defendant company was insolvent as the result of fraud and mismanagement and the company contending htat it was amply solvent and able to meet all outstanding obligations. The first important step of the plaintiffs, after the filing of their petition in court, was to serve the defendant with a notice to produce in court all its books, records and accounts and to cause the testimony of the president, secretary and chief bookkeeper to be taken under oath before a commissioner. The stenographer's transcript covered more than 600 typewritten pages. Receiver Is Named. On motion of the plaintiffs' counsel, the court appointed C. J. Metz as auditor of the books and records Following the report of Mr. Metz, the plaintiffs contended that every allegation made by them had been sustained and that the business of the former Guarantee Redemption Company had, at a time when the company was insolvent, been sold to the Guarantee Trust and Banking Company for a bonus of $250,000, the greater part of which sum was paid to Smith and Miles. The decision of Judge Pendleton declared that under the evidence, the officers of the company had been guilty of violating the trust relations imposed by its contracts and by the laws of Georgia and was unable to meet the measure of solvency fixed by the statutes of the State The decision was formally concluded by the filing organ order granting all of the prayers of the plaintiffs and designating James D. Robinson receiver.
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A TLANTA BANK OFFICIALS INDICTED BY GRAND JURY Atlanta, July 2.-Indietments charging It is alleged in the first felony count that the concern as a bank had paid an felonies and misdemeanors were returned unearned dividend of 3 per cent prior to this afternoon by the Fulton county grand 1912, in violation of the act of 1904. in the second felony count the officers are jury against Sam E. Smith and Henry IS. charged with having bought capital stock Miles, former president and secretarywith the money of the corporation. treasurer of the defunct Guarantee Trust The misdemeanor counts allege payment of unearned dividends by a corporaand Banking company of this place, retion as distinguished from a bank; the cently placed in the hands of a receiver. operation of the concern without license since 1909 and that the officers bought It was through the receivership procapital stock with the corporation's funds. ceedings that the attention of the grand Both Smith and Miles were arrested, jury was directed to the matter. There bonds in each case being fixed at $2000 are two counts alleging felony and three in each felony case and $500 in each misdemeanor count. charging misdemeanor in each indictment.
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Bank Building to Receivers. * A warranty deed conveying the old Atlanta National Bank Building, on East Albama street, near Pryor, from the Atlanta Savings Bank to James D. Robinson and Harold Hirsch, receivers for the owners, the Guarantee Trust and Banking Company, went to record Saturday, The figure was $60,000. The receivers obtained a loan of $50,000 from the Savings Bank on property on West Peachtree street, 100 feet south of Hunnicutt: on West Cain, 150 feet east of Orme street, and No. 139 West Peachtree street, near Pine.
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# Receiver Named for Paulding Power Co. A petition asking for a receiver for the Paulding County Power Company, at Dallas, Ga., has been filed in Fulton Superior Court by Harold Hirsch and James D. Robinson, receivers for the Guarantee Bank and Trust Company, of Atlanta. The power company is one of a number of concerns in which the trust company was interested at the time it failed several months ago. Stephen Tighe, of Dallas, was named by the courts as receiver for the power company.
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# Receiver Named for Paulding Power Co. A petition asking for a receiver for the Paulding County Power Company, at Dallas, Ga., has been filed in Fulton Superior Court by Harold Hirsch and James D. Robinson, receivers for the Guarantee Bank and Trust Company, of Atlanta. The power company is one of a number of concerns in which the trust company was interested at the time it failed several months ago. Stephen Tighe, of Dallas, was named by the courts as receiver for the power company.
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# Receiver Named for Paulding Power Co. A petition asking for a receiver for the Paulding County Power Company, at Dallas, Ga., has been filed in Fulton Superior Court by Harold Hirsch and James D. Robinson, receivers for the Guarantee Bank and Trust Company, of Atlanta. The power company is one of a number of concerns in which the trust company was interested at the time it failed several months ago. Stephen Tighe, of Dallas, was named by the courts as receiver for the power company.
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# Receiver Named for Paulding Power Co. A petition asking for a receiver for the Paulding County Power Company, at Dallas, Ga., has been filed in Fulton Superior Court by Harold Hirsch and James D. Robinson, receivers for the Guarantee Bank and Trust Company, of Atlanta. The power company is one of a number of concerns in which the trust company was interested at the time it failed several months ago. Stephen Tighe, of Dallas, was named by the courts as receiver for the power company.
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# Receiver Named for Paulding Power Co. A petition asking for a receiver for the Paulding County Power Company, at Dallas, Ga., has been filed in Fulton Superior Court by Harold Hirsch and James D. Robinson, receivers for the Guarantee Bank and Trust Company, of Atlanta. The power company is one of a number of concerns in which the trust company was interested at the time it failed several months ago. Stephen Tighe, of Dallas, was named by the courts as receiver for the power company.