New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1880-08-10
THE COURTS.
TRUSTEES WHO MUST PAY LOSSES.
DECISION IN THE SUIT AGAINST THE TRUSTEES Or
TuR RnNn STREET HAYINGS BANK.
'AY LOSSES.

DECISION IN THE SUIT AGAINST THE TRUSTEES OF
THE BOND STREET SAVINGS BANK.
Willis s. Paine, the receiver OF the lnsol-
vent Bond street Savings Bank, recently began SUIT
against the trustees OF that bank 10 hold them respon'
e for alleged bre aches Of with respect to loans
aud the disposition Of the moneys Of the bank when
were claimed to have been Illegal and Unauthorized I'M
der the law and the charter OF bank The receiver
reces among other allegations OF his complaint tm''
the trustees IN October. 1870 loaned to f. f. Chlld9
$4,000; to Levcrett W. Murray, $4,000; ana 10
Henry t. seelye $4,000, taking as collateral security
promssory notes OF the Riverside Improvement Com
pany secured By trust deeds conveying certain real
property near Chcago-sxty-six lots in all. At that
iimc Mr Chlds was the president Mr. Murray was the
secretary and Mr. 5eeye the treasurer OF the Improve
ment Company. All Of these lots, the complaint al
legcs were unmproyed, yielding no Income, ana not
productive within the meaning OF the banks cDaf-
ter They were merely the prairie in ia naturally vii
and unimproved condition. with a speculative value az
no time worth more than SlO 600. and now worth not
more than $4,000 These loans by the trustees the
complaint charges 10 have been brooches OF trust eEa'
aud plra rires. The trustees are forbidden Dy ~"
directly or INDIRECTLY TO borrow any the funds OF the
bank or in any to the same except to pay
current expense At the time when the above
laws were made David s. Dunscomb one OF the trnteees
o the bank was also large stakeholder ID the In
uroycmout COMPANY Messrs. Chlds Murray ana
S.riyc according the complaint were not persons 81
such pecuuay responsibility that the loans would nave
been made q them without the security Of the trust
deeds The interest on The notes paid only for two
years.
Mc.srs. ChiIds Murray and Scolye now insoyent;
the bank ms expended the premises II 600 and tho
only return il has received for its loans has Deeu the
interest for The receiver says further Una"
the facts alleged known TO he trustees wneh they
made the loans or they could have asceraned them
with proper inquiry. Inc injury 10 the bank from these
lf
the receiver asked Judgment against the trustees
Two OF the defendants demGrred 10 the complaint
and The matter came 90 for hearing before Justice
Var Worst at ecial Term. He gave decision yester
day. sustaining he complaint ana OytrtuIDS me u9
mlrcr Under The statutes an cng this stViugs baek
aud it, trustees, lie says III hs opinion, the lGahsaclOun
action cd either ~ loan 90 the notes OF e
indiy duals Guilds, Murray and seeye VINO %ere tne
officers The ImprO, cment Company, or ON those OF
ia" fcgahy iS1,' t - nrdctye or worth double the
amount advanced and winch situated without the
DTnsc,,nb IN no view can tue transaction DC pro
nonuccd q legal or prouer exercise Of power by the
ct be- rad that the transaction under consiG-
craJon by wnicn the fund. instead OF ben& Sep, were
plee vita ana sent out r tie state ana cif repay
attempted 10 be secured by the notes OF cOrp0,
and ciuzen> rcsing out Of tls uri7tlcon anu
by unmproyod Land situated IN thu state Of Illinois was
WITHIN the power OF the trustees NJ trustee cou1 ot
ID moment believe thar sucn disposition Of the fun4
france Of either the eiter or the spnt o
TIE laws to "mch the cIpo.o'i anu W vs. "
subject II the trustees were PROM Ted from So invest
Oi tue DdNh over ana hIOht WA WIS
needed a., au available fund ID meet current expenses
tori,Drt they WOui be justified IN 80 placing tie
available fund Ihe c0mmtic 70 WHom We mater NdS
referred power 10 purchase, Yl,i Ell the properly
and recommended the loan; the trustee DunscOmD !
VINO hAd p1cunary interest 10 advance, as Is ae-eo
was very active in promoting 8nd obtaining tho same
When tlc private interests or trustee are 10 De al
vanccd poTaie Interests well az those OF tie
ere tOls Become suD, rdH&te ana arc apt 10 % sac
rlicCd. ,.-,
lhe transaction must be held 10 every Wow In which
il may be regarded HrG rycS, an the trustees VINO
sanctioned tB,m are haDi- for breaches Vi duty ava
must make good tAc lO3-' 81,
Among the defendants who were trustees or other |
B1Inum. Jonn Aiken Joseph T. WuittOck, GerSon y. |
Hermann RODor Ifwln. Charles ID. Bailey Erastus /. !
Mead J. q Adams. James W. DOmIulck, Joseph simon
son r., joseph =. Cooper Sinclair TouSey, Edward |
Corning. samuel T. Hubbard, william Phelps, John L.
ruu~ey, aud sherman W. kneYals.
Ths sut s regarded rs a test for similar litiga
lions. Barlow IL Oncy represented the plaintiffs; W.
NJ Powell A. g. sedgwick, h. Il. Robinson, aud Ohers,
various d0feuuants.