The Northern Daily Times.
Liverpool, Merseyside, England, 1856-06-23 00:00:00

THE TIPPERARY BANK

In our impression of Saturday we announced the feet
that the Master of the Rolls in Ireland had delivered his
decision on the appeal from the Master in Chancery in
favour of the appellants, the English shareholders. We
have now to add, that in pronouncing his judgment, his
Honour, after giving a complete history of all the transac-
tions connected with the bank, and showing the complicity
of James Sadleir in the frauds of the late John Sadleir,
said, in conclusion, that he fully assented to the opinion
expressed:by Lord Campbell, to the effect, that if a divi-
dend were paid out of the capital of a concern when,no
profits had been made, a gross fraud would be practised ;
and the directors were not only civilly liable to those whom
they had deceived and injured, but they were guilty of a
conspiracy for which they were liable to be prosecuted and
punished. There could be no doubt that a conspiracy by
falsehood (as by a fictitious dividend) to raise fictitiously'
the market value of shares of a railway company, or any'
other joint-stock company, that the Queen's subjects may'
be deceived and injured, and at their expense a profit may'
be made by the conspirators, wo l l be an indictable
offence. I am, therefore, (continued his Honour) of
opinion that the order of, the Master must be reversed. I
have come to the conclusion on the first question raised,
although I am also of opinion, if the argument of counsel
for the official manager was well founded, that James Sad-
leir was the agent of the Irish shareholders in respect
of the contracts entered into with the English share.
holders, that the contract was vitiated by fraud. I
haVe not ddcided whether the 6th of George IV., c.
219

__, sec. applies to this case. It has been con-
tended that that section is only applicable between
creditors and shareholders, and not as between share-
holders inter se. If it is applicable as between shareholders
inter se, it would put an end to all question in the case, but
Ido not consider it necessary to decide that point.. There
is,. I believe, no corresponding section in any Act in force
in England. The Master's order will be reversed 4
In the course of the judgment, which occupies seven
columns of the Mail, the Master of the Rolls read, With
marked emphasis, the following extraordinary letter';
addressed to James Sadleir by John Sadleir ; it bears date
"London, December 31, 1855," a few weeks previous to
the final smash of the Tipperary Bank :

"TIPPERARY JOINT•STOCB RANK.

" My dear James,—The accounts should be made out
treating the paid-up capital as £lOO 000 on the 31st of
December, 1854; therefore, the requisite number of
shares to make this account square should be entered
as vested in A. Ferrall, Esq., and he should be debited
accordingly in an account in respect of the shares.
h" The reserved fund ' should be treated as £14,072 Os
3d on the 31st December, 1854.

" It will not be requisite to print and circulate among
the Irish shareholders a balance-sheet, but as all the
English shareholders are in the habit of getting from
every bank in which they hold shares a printed balance,
sheet each half-year, we must give them a printed balanced
sheet at least once a-year, and for the year ending the
31st December, 1855.
"By this means the present English shareholders will
double their present holdings in the Tipperary Bank, and
I dare say the balance of the £lOO,OOO of stock will be
quickly taken up.
"Now I know many of the English joint-stock banks,
in order to give a good appearance to their balance, have
constantly trebled the amount of their balances, &c., by
making a series of entries, whereby they appeared to have
assets and liabilities to four times the amount they
really possessed or had. This has been always kept very
quiet, and what at first was a kind of fiction became
gradually to be bona fide.
" I enclose you the figures I gave Law (i.e., Farmer
John Law), and some few others, and the balance sheet
for the year ending the 31st of December, 1855 should be
framed so as to tally with this balance sheet for the year'
ending the 3lst of December, 1854.
"An increase of about £30,000 in the item of customers'
balances, &c., should be made to appear. The item trade
fixtures' should be increased or decreased as you con-
sider best.