The New York herald., 1876-10-10
How the Guardian Savings Institution
Was PIundered.
PROFITABLE RECEIVERSIIIPS
Judge Bosworth Presents Some
Startling Facts.
WHY DIVIDENDS WERE SMALL

hotion 70 IeoNo niW Suluan resigned, ana foter j.
o'Douohue was appointed in his stead Some
action taken the part Of the creditors havc
Peter J. o'Donohue removed, and Judge Lawrence
referred the matter 10 exJudgc Bosworth take ,cs-
t,mony and report Yesterday the report was SUBJ
mtted to Judge Lawrence by Mr. John T. McGowan,
counsel for the creditors, for approval The report
tells interesting story tor all interested savings
banks, and is IN full as follows:-
Firx-on the IL tn OF November 1871 Jeremiah Quin-
Ian appointed receiver Of the property and effects Of
this institution. Joseph j. ODonohue, brother and
copartner in business and the surety of the present
receiver, became the surety OF Quinlan as such re-
ceiver. IL was understood between Quinan aud Joseph
J. uDonohue when tho latter became such surety Tor
the former that Qunian should employ as his clerk and
bookkccpcr such receiver Joseph Riley, brother
in-law OF Joseph j. O'Donohuc al salary OF 81 900
per annum, and who had the time any
tive occupation, aud that Qunan willing to divide
hs ices or commissions as receiver with Joseph J.
O'Donohue The said Joseph Riley was thus
employed aud paid at the specified rate.
and QunIan as to the compensation TO DO
paid to Riley, but Riley The office the
by dlrcctous OF Joseph j. oDonohue, and upon
his duties. Somewhere about the 18th OF February,
1872 Riley drew from tho Trust Company from FUNDS
OF the Guardian Savings Institution there deposited,
the OF $50 900 for tho purpose OF making payments
deposors; OF that sum he handed S. 600 to Quinan
and Qunan gave s., 500 oil It 10 Riley, and Of this
81 500 Riley paid 81 900 to Joseph j. O'Donohue, who
still retains the same. Between the lst and 10th OF
April 1872, Qunan took other ss 900 the lunds OF
the institution by drawing check TO Riley order for
that amount, who gave half Of this $4,000 TO
Riley, VINO delivered the same TO Joseph j.
O'Donohue. No entries were made by Riley at tho
time ana years thereafter in the books OF of
the OF this use and appropriation of these
moneys. At the time OF his appropriatng these
moneys Qunan stated 10 Riley that they part
his (Qunlans) fcea He had then collected dis
bursed moneys on which his commissions would
amount 10 any considerable portion OF these sums.
Riley claims Il mis- testimony that this money
given 10 him individually But he says that he does
not rccoect that anything said TO him by Quinlan
in relation 10 the 81 500 and the $4,000 when these
were paid TO him by Quinian. The tact that
Riley paid So OF tho $6 500 to Joseph j. O'Donohue
about the time of receiving IT, and the iurther
tact that the latter retained II show clearly, as
think, tuat it was well understood between
tho three that this money paid for
the benefit Of Joseph J. O'Donohue When Quinlau
appointed receiver and asked JoscphJ O'Dononue
become his surety O'Donohue told Quinlan that he
thought Riley was competent person to look after
the interests OF The institution SO he tesLilcs, and
O'Donohue that he would Sivo hn halt his fees, which
O'Donohue says he declined aud stated that all his
"nterest was TO have The Founding Asylum get their
money, and have the matter settled quickly pos
kiolon This asylum then had large deposits in this
institution; Riley gave him ~ 600 and he thinks
February 1872, and in April 1872, the urtner sum Of
$4uO stating the time that no had received it
Mr.. Qunlan; Mr.. O'Donohuo on The 18Th OF April,
1876, stiii had the money but says 1t belongs
TO Riley, and that such thought as calming him
self entered his head IL Is difficult to perceive
what principle on such iacts as the testimony
less be large dcfauer and at the same
tmc be entitled in equity and good conscience 10 full
Office OF receiver the 14th Of January, 1875 and
Peter j. O'Donohue the present receiver, xp-
pointed in his place, and Joseph j. o'Donohue is his
surety. For Quinan's dealcation. TO The amount o:
tho penalty oi the boz sned by Joseph J. O'Dono-
hue The latter is iable concedes tho fact OF such
liability. II must be a very unpleasant duty for the
present receiver to periorm-to be vgilant
in his Efforts to establish the deficiency
is to sae .na. A the Settlement u ouinians accoun, e
commissions allowed 10 him to which he
entitled, to attempt TO reclaim upon Joseph J.
n 81 nj fnn,tr NJ f.n
deposited with him by Mr.. Riley. Peter J. O'Donohue
is younger brother OF Joseph J. ODonohue and
partner IN business, and without intending to re-
ilect in the slightest degree upon his intelligence or in
tegrity OF purpose think II emincnty more fitting
that some competent person who sustains no such
lalion Joseph j. O'Donohuc the present
does should be substituted IN his place receiver
The should be indifferent to all parties and
to the results to them OF efficient performance OF
duty be influenced by lear. favor the pos
sble desire benefit relatives directly indirectly
Second-By an order OF Court dated the 2ls Of March
1872 Jeremiah QuinLin. receiver authorized
sell certain bonds and mortgages therein mentioned
being ot the Guardian Savings lnstitution on
the best terms he might be able TO do Quinian OIL
Tered sell three of them to Joseph J. O'Dvnohue.
amounting 10 the principal sum of about $l4 1856 al
discount oi ten per cent who willing 10 purchase
them Ut that rale but not without an order OF tho
Court authorizing sale OF them ut that Of dis
count An orde Of this Court dated the 10Th Of April,
1872, procured by Qunan receiver, author
iziny HIM TO sell them at that discount and
thereupon he sold them to Joseph J. O'Dono-
hue ut that discount. Although this sale was
authorized bv order Of tho Court Mr. Joseph J.
q Donohuc was unwilling to purchase them under
the order which authorized the receiver to sell them
OH the best he might be able do He required
order of the Court authorizing sale At discount
OF ten per cent THIS does not necessarily indicate
that he believed sale AZ that discount unnecessary
sacrifice o valuable securities HIS position TO the
his surety and his position to the Guardian
Savings Institution as one interested ITO have the
Founding Asylum get their money" owing TO 1t from
the Guardian Saw sngs Institution should have inlu-
enced him to prevent sale a. large or any discount
doubt would be paid in iull These bonds and
CAGES were perfectly good aud one Of them about
maturing. There hnd been cash sale on the Sd
oi April 1872 of part OF the property which Walter
Rochc had conveyed IN trust 10 pay crcdors OF the
Guardian Savings Institution amounting to sy2 225,
and the residue OF it the could sell at any time
and tho aggregate amount OF such sales when made
amounted TO over $500, 900 Mr Joseph J. o'Donohue
in position to be advised Of what being done
with tho assets o the Guardian Savings Institution.
His brother-inaw, Mr. Riley, had beeu appointed the
hue's recommendation; that Rilcy, as he thought,
'was competent person TO look alter tho interest
1872, OF $3.50, and AprI, 1872. OF $4,000 OF
The funds OF the institution. whether for
himself or Mr. oDonohuc, indicate strongly
that Mr.. Quinan was wiling that they should make a
pront at the possible m not necessary loss the cred
tofs OF the institution and that they disposed
make such profit Tho purchase of these three bonds
mortgages at The large discount OF ten per cent
her transaction tue line probably trabck
ing with funds OF the institution which, think, Mr..
oDcnohue should have advised against instead OF be-
Ing au actor I'D IT,
TAira-when Quinlan WAS appointed such receiver he
$lS,0O0 Tor moneys loaned follows, Viz .--Au-
gust IL. 1863 uoho 2sl $1,000; November ~,
1859 folio ISL $4,000; December J, 1869 Qolio
2gl. 5000. He undoubtedly thought Qunian
was perfectly responsible when he loaned this money
to HIM Bu; before ouinian was appointed receiver
Mr. ODonohue expressed TO Quinlan several times
wish to have this monev refunded. II was not re-
funded. On account OF his Indebtedness on this loan
Quinlan paid 10 Joseph j. 0Donohuc, April or 10,
1873 Ev. 256, 25sl. s4ooo; April 10 IL 1873 I'D y
So 900: Ars ~. 1873, Qunsn receiver, received
check assets Of the duarian Savlpgs lnsttutionl
fpr& h4 Eat Rfe hA he
ceivcd April .. 1879, $i2 ZOO Although the evidence
tends somewhat strongly to show that 00o at least
paid by Quinian 10 Joseph }. 0'Donohue paid out
o the funds oil tho Guardian savings Institution, DO
not cc Al liberty 10 conclude against Joseph j.
O'Donohue's cxpcit testimony TO the contrary that
Lc had any suspicion that such tho tact, whom
received that payment But supposng him to be sub
stantay posted as TO the fact OF The receipt OF moneys
by tho receiver, tho chronology these receipts and
payments casts shadow upon the good faith OF this
part OF the Transactions between the receiver Quinan,
and Mr. Joseph J. 0'Donohue. The fact Is undeniabe