The San Francisco Call. Newspaper, November 17, 1898, Page 1

FRANCISCO. THURSDAY, NOVEMBER 17, 1898 PRICE FIVE CENTS. Horace W. Garpentier Was't Tool of ‘o, . the (Old Financier, Valuable Market-Street Land Ille- gally Transferred to Cheat Depositors. vVRINRLRLNK s nBH 2 % and the methods thatruined the Pacific % Bank and the People’s Home Savings Z Bank has borne fruit. « city on Market strect, near Sanchez, a & very valuable picce of property belong- 2 ing to Dr. R. H. McDonald. Through a + serics of dishonest and iliegal transac- @ tions it was transferred with a purpose #z of defrauding the creditors of the bank # to Horace W. Carpenticr. £ of creditors have been on the'lookout # since the Call bggan these exposures, & and several of them, acting through £ their assignee, S. G. Murphy, president 2 of the First National Bank of this city, 8 attached the propesggrycsterday after- = mnoon and will have it sold to satisfy one ¢ of the judgments againstDr. McDonald. # This will be done for the benefit of the @ creditors, and is only the beginning of the Call piace. nRHEN The Call fulfills this morning its, it would not who wreck- but that it promise 1o the public th: only expose the scoundr ed the McDonald banks would also show to the robbed creditors of the defunct tutions how they may obtain something of what right- fully bel to them. The startling exposure of the dishonest schemes that destroyed the Pacific. Bank and the People’s Home Savings Bank h reached such a stage that it is neee creditors of the bank that in this city there is very valuable property belon~ing to Dr. McDonald and subject to attachment. When The Call began its startling expose its pri- mary purpose was to recover for the creditors if possible some of the prop- erty that the dishonest bankers and thelr parasites diverted to their own gary to show the The Call’s expose of the scoundrels other and similar legal action, which will exploit in the proper IRNRRRRRRUBNN There is in this Thousands 2 RN NENNRRNRR RN RNNHRR 8 % LR R AR AR AR AR A A AR A AR AL benefit and then protected from any proceeding that the creditors might un- dertake. This purpose is partially accom- plished in.the announcement that Dr. R. H. McDonald owns a very valuable plece of property on Market street, near Sanchez. The estimated value of this property ranges from $40,000 to $60,000. 1t extends for 150 feet on Mar- ket street and cannot but increase in value with the progress of the city. It belongs to Dr. R. H. McDonald, al- though through a series of dishonest transactions it now is recorded in the name of Horace W. Carpentier. The man in whose name this property now stands is on® of the most widely known if not favorably known persons who ever lived in California. He was a close friend and adviser of Dr. R. H. Mc- PERTY OF DR. McDONALD IN THIS CITY SEIZED BY ROBBED CREDITURS The McDonald Property on Market Street That Is in Carpentier’s Name. Donald and was ready to perform al- $ most any service that the dishonest old financier requested. When the banks were on the verge of destruetion Frank McDpnald trans- ferred a piece of very valuable local real estate belonging to his father to a bogus corporation organized by the McDonald family to cheat their credi- tors. This corporation in turn trans- | ferred back to Dr. McDonald the prop- erty in question. The old banker again transferred the land to Horace W. Car- pentier, in whose name the property | is now recorded. All of these transfers | were absolutely illegal and The Call | presents this morning the full and com- plete evidence of this fact. The full description of the property which is still owned by Dr. R. H. Mc- Donald, although it stands in the name of Horace W. Carpentier will be of in- valuable assistance to the depositors in their efforts to recover what right- fully belongs to them. This property wus purchased by Dr. McDonald many years ago, and the old man realized in the later days of San Francisco it would be of tremendous value. This land above all others he wished to keep to himself, and he was more than particu- lar in transferring it through bogus transactions so that his name would not appear as owner. The property in its full description is as follows: Beginning at a point on Market street, on the southeast side, one hun- | dred and eleven (111) feet and three (3) inches ‘from the corner of Sanchez | street, and extending southwesterly | along Market street for one hundred | and fifty (150) feet; thence at right | angles to Market street southwesterly | one hundred and ten (110) feet; thence | northeasterly and parallel to Market | street one hundred and fifty (150) feet; | thence at right angles and northwest- | erly one hundred and ten (110) feet to the point of beginning. Also beginning at a point on the southeasterly side of Market street and northeast of previous piece, distant eighty-three (83) feet and four (4) inches southwesterly from the south- | westerly corner of sald Market streét | and Sanchez street; thence southwest- erly along said line of Market street twenty-five (25) feet and eight (8) inches; thence southeasterly and at right angles to Market street on® hun- dred and ten (110) feet; thence north- easterly .and parallel with said Market street fourteen (14) feet and eleven and one half (11%) inches to the westerly side of Sanchez street; thence north- erly along said Sanchez street sixteen (16) feet and five and one half (5%) inches; thence northwesterly and at right angles to Market street ninety- seven (97) feet and six (6) inches to the point of beginning. The exposure undertaken by The Call placed the creditors of the two wrecked institutions on their guard. The thousands of men and women who lost their money through the dishonesty of the McDonalds understood ‘that the exposure, was not made for any purpose of sensationallsm. . They were assured that something of material advantage to them would result from the revela- tion The Call has made, and yesterday afternoon the first attachment upon the | property of Dr. R. H. McDonald in this city was made. This attachment was issued in the suit of S. G. Murphy against R. H. McDonald. The prop- erty on Market street has been attach” ed by the legal representative of Mr. Murphy, who will now proceed to get gervice on the defendant by publication and have the property sold under judg- ment to satisfy one of the debts that | Dr. McDonald owes to the robbed creditors of his banks. In January of this year S. G. Murphy, who at one time was cashier of the | Pacific Bank, and is now president of | the First National Bank, was made the assignee of many of the depositors and creditors of the Pacific Bank. Acting in the capacity of assignee Mr. Murphy filed 'a suit against R. H. McDonald to recover $34,842 50, the amount of several claims assigned te him. Dr. McDonald was sued personally on his liability as a stockholder of the wrecked bank. The old man being the principal stock- holder, legal action was first directed against'him. Murphy was unable to serve a summons on Dr. McDonald and the suit dragged along up to the time of the death of Daniel Titus, who was Murphy’s attorney. began its startling expose of the men and measures that accomplished the ruin of the Pacific Bank, Murphy, | among thousands of others, was on the ‘When The. Call |- qui vive for any development that would lead toward the location’ of at- tachable property. He became convinced that the prop- erty that now stands in the name of Horace W. Carpentier actually belongs to Dr. R. H. McDonald, and his attach- ment immediately followed. Alfred Sutro was employed by Murphy to prosecute the case from the point where Titus had left it when he died. As a result of this employment an attach- ment was levied upon the property and the Sheriff will take proceedings to- | day. This attachment furnishes a fcundation for service upon McDonald by publication. It is supposed that Dr. McDonald is in Montreal, Canada, al- though he was known to be in New York a few weeks ago. The suit which has been filed in behalf of S. C. Murphy does not affect any one but Dr. MeDon- ald. The way Is clear, therefore, for civil action against all of the other con- spirators who wepe concérmed.dn’ the ruin of the Pacific Bapk. DR. McDONALD’S DI HONESTY. The Call has already proved that Dr. R. H. McDonald was thoroughly in- formed of the condition of his banks in this eity. He knew that faflure was absolutely inevitable, and he had al- ready given his solemn promise to the Bank Commission to pledge his private fortune for the benefit of the robbed tepositors of nis insutution. A few cays after he made this prom- ise, in December, 1891, he fled from this city and State, with the purpose of placing the burden of dishoner on his | sons and to save his own property from the grasp of his deluded creditors. ile owned enormous properties, not only in | this city, but in Norfolk, Va., and he determined to protect his own posses- sions from the consequences of his own dishonesty and that of his sons. For nearly two years, in conjunction with his son, Frank V. McDonald, and their parasites, he plotted and planned to conceive a method by which he could secure his property from threatened and prospective attachment. Frank V. McDonald, who has already proved himself to the public a more than or- dinary clever and crafty schemer, planned the organization of a gigantic corporation, which was to be known as the McDonald Company, into which ali { of the available assets of Dr. McDonald were to be thrown and protected from attachment. This company was con- ceived in the brain of Dr. McDonald and his unscrupulous son early in 1503, when the affairs of the Pacific Bank were in such a condition that collapse seemed inevitable. The son had various suggestions to offer and his ideas fin- ally culminated in:the organization of the MecDonald ‘Company, which was nothing more or less than Dr. McDon- ald himself. The doom of the banks came more quickly, however, than the dishonest father and son expected. This great company did not possess even the sem- blance of organization until two days before the Pacific Bank collapsed. Father and sons had planned thelr scheme for many months, but they nad neglected to make it a legal reality un- til two days before the crash came. This fact is of the greatest possible sig- nificance to the depositors and creditors of the ruined banks, particularly in reference to the plece of property on Market street which was attached yes- terday and belongs absolutely to the creditors of the McDonald banks. It was early in June that the Me- Donalds saw that the ruin of their in- stitutions could mot be prevented. Dr. MecDonald had already induced his sons to steal $142,000. He had forced them to take from the vaults of the Pacific ‘Bank $13,000 in coin for his own per- sonal necessity. He had cautioned them to be on their guard agginst any action that might convict them of fraud. He understeod thoroughly: that the month of June, 1893, could not be passed with- out ruin. After he had transferred as mmuch of his personal and real property as he could he delegated to his son, Frank V. McDonald, the duty of sav- ing this very valuable plece of prop- erty on Market street, near Sanchez. THE TRANSFER TO THE COMPANY. As a precautionary easure in this campaign of theft Dr. R. H. McDonald gave to hisson Frank hisabsolute power of attorney. Frank used it for every dishénorable purpose that he could con- ceive. He had already stolen, for his father nearly $225,000. He determined to steal more. He was informed by his father that the piece of property on Market street must be taken out of the McDonald name, but retained in the possession of the McDonald family. ‘While the giant corporation that was subsequently known as the McDonald Company had been conceived in the dis- honest brains of the bankers it was not yet a legal reality. Frank traded upon his ability, however, to deceive the pub- lic and the creditors of his banks. Pos- sessing the power of attorney of his father he deeded the piece of property ‘yon Market street, which has already | been described, from his father, R. H. | McDonald, to the McDonald Company. This deed was made on June 14, 1893— at least six days before the McDonald Company of Norfolk, Virginia, was in existence. This fact should not be for- 'gOttAIT, for it is the evidence that viti- -ates the legality of the transfer. Cer- tain facts in reference to the organiza- tion of the McDonald Company of Nor- folk, Virginia, prove this assertion. The first meeting of the directors of this corporation that was called for the pur- poses of organization was held at Nor- folk on June 20, 1893, six days after Frank McDonald had deeded this valu- able piece of local property to & corpo- ration which did not exist. Even the meeting of directors that was held at Norfolk on June 20,1893, did not make the McDonald Company a legal corpo- ration under the laws of the State of Virginia. It was necessarv before the company | could be legal that a charter should be | obtained from the State authorities of | Virginia. This charter had not been obtained, and while Frank McDonald possessed the power of attorney ‘for his father, the McDonald Company certain- 1y could not haye a legal representa- tive in this city before the corporation had an existence. It is the purpose of The Call to trace step by step the theft of this Market- street property and to show the credi- tors of the McDonald banks how they ]may recover something of what is due them. ‘When Frank V. McDonald deeded the Market-street property to the McDon- ald Comrany of Norfolk, Virginia, he swore before a notary that he did so in consideration of $50,000. No such consideration wnas ever received. Not a dollar of money .passed in the trans- fc nor was subsequently received by the corporation. Frank McDonald was simply delegated to steal wherever an onvortunity offered, and he carried out his contract, expecting that investiga- itors would never discover the vitally important discrepancy of six days. For over five years the robbed deposi- tors of these banks have been striving to locate some property of Dr. McDon- aid - that might be legally levied upon and confiscated in part payment at least of what is due them. Every possible effort was made without avail, and to-day The Call ~ives to these de- positors the important information that to Dr. McDonald, and+belonging to him is ‘the property of the depositors. When the banks failed the estimated value of this property was between $60,- 000 and $70,000. . It is now probably worth $40,000, no insignificant sum in the finances of the Pacific Bank. When Frank McDonald, empowered as the legal representative in this city of his father, signed the deed on June 14, 1893, he allowed the transaction to rest for several days. He waited until the crash came in the Pacific Bank before he made public his thieving transaction. It was not until June 22, 1893, that the deed transferring the Market street property from R. H. McDonald to the before a notary public. This notary gally one under the laws of Virginia. On the following day, June 23, 1893, the deed from R. H. McDonald to the McDonald Company was recorded the office of the Recorder. in this city ‘at the request of the McDonald Com- pany. The record shows that at thirty- placed on record. Even then the Mc- Donald Company had no legal repre- sentative in this city, and the record was as bogus as the deed of transfer ft- self, although Frank (V. McDonald signed himself as being clothed with full power-of attorney for the both par- tles to the transaction. There was no- this pronerty on Market street belongs | (Call's Expose Bears Substantial Results. Fraudulent Deeds Revealed After Six Years of Successful Deception. body here or anywhere else empow- ered to record that deed for the McDon- ald Company. THE PROPERTY SPIRITED AGAIN. Dr. McDonald, who was one of the craftiest and most unscrupulous finan- ciers who ever preyed upon this coun- try, was still fearful that this valuable property might be seized from him by the robbed creditors of his banks. He wished to make the transfer more com- plete. Very soon after the collapse of the Pacific Bank the McDonald Company of Norfolk, Va., became a discredited and dishonored corporation, and Dr. McDonald decided that he would again have this Market street property in his own name. He determined upon this course not for the purpose of retaining the property in his own name, but for the purpose of securing it again that he might once more transfer it in an- other direction. On September 4, 1893, ‘he had the Mc- Donald Company deed the Market street property back to him. When the deed. was made the consideration was given as $1. It should be remembered that Dr. McDonald deeded the land to the McDonald Company in considera- tion of $50,000, and then recejved it back in consideration of 31. These facts in themselves illustrate inspired the transactions. ‘With the craft that came with experi- ence and foreseeing carefully what he intended to do subsequent to the trans- fer from the McDonald Company to himself, Dr. McDonald deliberately made this transfer an illegal one. He knew that the McDonald Company was himself, and he knew that any transfer made by that company that could be proved illegal would certainly be vitiated and the property would re- turn to himself. Utilizing this knowl- edge and fearing to trust any one he deliberately made the transfer back to himself an {llegal one. As already indicated tended this transfer preliminary simply to a second transfer to one of his employes. The old financier did not trust this em- ploye and feared that at some time he would become fractious and attempt to prove ownership of the property. In order to prevent that, Dr. McDonald had made the peculiar contract by .which the property was deeded back to him from the McDonald Company. The record of this deed is in the Re- corders’ office in this city. In the first place the property is not properly described. This may or may not be of significance, but it is cer- tainly of some importance even as an error. In the second place the trans- fer is signed as if it were given by “The he in- should be something of the gigantic fraud that | of Scoundrels McDonald Company” instead of the “McDonald Company,” a most import- ant defect In a legal transfer. In the third place, and more import- ant still, the transfer was signed by in- ferior officers of the corporation, whose signatures did not bind the company. The records show that the deed of transfer was made by Frank S. Ed- minster, vice president, and Charles E. Puttfarcken, acting secretary. As a matter of faet, if these sub- ordinate officers had anything worth attaching. they and not the McDonald Company could be held e¢ivilly responsible for the transfer. The Supreme Court of this State has held that such a transfer must be signed with the name of the corporation by the proper officers. Another and vitally important de- fect in the transaction iIs the fact that when the deed was made from “The McDonald Company” no resolution or- dering the transfer was adopted by the company. As a matter of law, there- fore, as well as of equitable fact, this Market-street property still belongs to Dr. R. . McDonald, notwithstanding the transfer that was subsequently made. In this particular affair the person- ality of Frank S. Edminster is of con- siderable public importance. Edmin- ster was associated with Dr. McDonald from the time that the dishonest old financier was engaged in the manufac- ture of Vinegar Bitters. Edminster was the bookkeeper and secretary of the Vinegar Bitters Company and enjoyed absolutely the confidence of Dr. R. H. McDonald. It was Edminster who es- tablished in New York the notorious ‘“fence” through which the McDonalds attempted to negotiate their worthless bonds. It was Edminster who was ready to perform any services his mas- ter commanded and it was he who be- came vice president of the McDonald Company when that corporation stood discredited and dishonored through the failure of the Pacific Bank before the people of Norfolk. It is of interest and also of great im- portance for the depositors of the banks to know the changes that were made in the description of the property in the deed from the McDonald Company to R. H. McDonald. The correct descrip- tion has been given above. The dis- honest description as made in the deed from the McDonald Company to Dr. R. H. McDonald is as follows: A FAKE DESCRIPTION. Beginning at a voint in the south- easterly side of Market street distant 83 feet 4 inches southwesterly from the southwesterly corner of said Market street and, said Sanchez street; thence southwesterly along said line of Market Continued ‘on. Third Page. MecDonald Company was acknowledged ' was E. H. Tharp. The McDonald Com- | pany was a reality, although not le- | in four minutes past 1 p. m. the deed was D.agram Showing the Location of the Property on Market Street.