Acting upon the advice of his coun sel, Mr. Frank J. Raven submitted to judgment in the U. S. Court for China, ast Wednesday, when he appeared in answer to three claims totalling Tls. 405,000 filed against him last July by Mr. Frank L, Hough, liquidator of the] American-Oriental Banking Corp. and the American-Oriental Finance Corp. fand trustee of the Asia Realty Ca. Mtr. RT. Evans, who appeared on Mr. Raven's behalf, stated that his client would file almost immediately 2 petition for voluntary proceedings in' bankruptey.
large crowd filled the court-room in' the U.S. Consulate-General during. the morning, and an extra umber of chairs had to be put in. to accommodate the interested specta-{ors In accordance with Federal Court procedure, a large American flag hung from a flag-pole near the Bench, Dr. George Sellett, who was counsel for the plaintiff" and the Gefence, represented by Mr. RT. vans and Mr. Frank Raven, took their seats.
Upon Judge Milton J. Helmick's enquiring as to whether counsel had any objection to the three cases being {ried at the same time, Dr. Sellett ald that for the purpose of the morn~ {ng's hearing, both he and Mr. Evans Gesired that all three cases be called together.
Dealing briefly with the bills complaint, he said that with regard fo the Bill of complaint filed by Mr. Hough as liquidator of the A-O.BC.
was alleged that in January, 1992, following a resolution of the board fof directors, the bank paid to the defendant Tls. 195,000 as a hon num, and this money was actually paid to him on January 19. It was fileged that the bank was insolvent fat the time, although the plaintitt dia hot consider it necessary to, prove this. In the case of the suit by the trustee of the Asia Realty Ca, it was} alleged that the same sum was paid fon or about the same date, and for the same reason, although there was no jon that the company was insolvent. The Asia Realty, however, did not owe Mr. Raven any money fat the time, With regard to the A. OFO. there was the same allegation fs in the case of the A-O.BC.
"An answer to the bill of complaint of the A-OF-. only had been filed by the defence, selting out that the Tls. 135000 had been voluntarily returned to them in the Spring of 1933. 'AL the time the complaint was Med, this had not been known. They were how claiming interest, at the rate of 6 per cent. per annum, on this sum. from January 19, 1982 to February 25, 1933.
"The defendant in this case denies that the bank and the finance corporation were insolvent, and denies! Buy allegation of fraud," said Mr. Evans. "The plaintiffs counsel has announced that he proposes to offer evidence in support of the allega-Hon of insolvency. Notwithstanding this, I have come to the conclusion, fatter a careful examination of the Jaw and the facts, that the burden of proof is on the defendant, even in the} absence of fraud or insolvency, Justify the payment to him of the sums referred to in the complaint, and that in order to establish the Correctness of such payments he must prove that. the American-Oriental Bank and Asia Realty Ca. were respectively indebted to him at the time of the passing of the resolution of January, 1992, and to establish such Indebtedness he must prove a contract, express or implied to pay him compensation.
"Inasmuch as the bye-laws of the: corporations concerned contain no provision for the remuneration of Officers and directors, and as there: was no express contract, and as the: Gefendant cannot establish the exist ence of an implied contract in view of the death of the only independent persons who could now testify to Such a contract, namely. Messrs. Britton and Fleming, I have advised the defendant to submit to judgment, and hho now does so submit, "I accept full responsibility for his! decision, 16 which I have come after the most painstaking investigation of which I have been capable, and my client in accepting judgment against hhimselt is following my advice. In the case of. the American-Oriental Finance Corporation there is a plea of payment and I understand that this conceded.
"The fact that the amounts received by Mr. Raven in January, 1982, were paid to the Raven Trust Ca. to bolster that company is, I am satisfied, irre-ovant, and even if the companies concerned had desired to pay the money direct to the Raven Trust Ca. [it would have been beyond the power of the directors to authorize such payment"
Dr. Sellett said that he wished it be understood that the plaintiff did not waive the allegation of fraud. In the case of the A-O.B.C., he would have been able to prove that, far from performing services as president without any form of salary, Mr. Raven had been receiving a regular and monthly wage since 1921, With proved, although payments did not begin so far back. He also pointed out that most of the stock of the Raven Trust Ca. was held either by the defendant or his family.
Stating that he did not want to enter into an argument, Mr. Evan said that his client wished it to be known that he did not receive any money from the Raven Trust Ca., and the money put into it was for the benefit of creditors and preferred stock-holders. A dividend was declared not long afterwards, but Mr. Raven received no part of this.
Tt was admitted that the defendant had received money from the OBE, and for some time from the Asia Realty Ca. But Mr. Evans asserted that this was no evidence of fraud, and that his client would strongly fight the criminal charges gainst him.
His client further wished him to Mle voluntary proceedings in banke rupted, and as soon as a date could be fixed by the court, he would do Judge Helmick instructed Dr. Sellett to draw up a decree for the return and restitution of the money, fo submit it to Mr. Evans for con: sideration, and then to bring it before him for signature.
Text read from the printed page and cleaned; old type leaves the occasional error.