The Jersey City news. (Jersey City [N.J.]) 1889-1906, 1889-12-13
BANEDHPOSI7ORSHAPPT
The Mechanics and Labor
ers' Bank Judgment
P1eases the Losers.
THE EFFECT OF THE DECISION.
What is Said About the Liabil-
ity of the Several Directors I'm
der the ChanceIIor's Ruling.

The announcement made by the JERSEY
CRY News yesterday that the Chancellor
had filed an opinion in the Mechanics and
Laborers Savings Bank case and the
extracts of the decision published caused
considerable excitement in the city last
evening.
The depositors congratulated them
selves upon the victory which the decis-
ion gives them, and began to think that
at last they would obtain some of the
money they lost by the collapse of the
bank seventeen or eighteen years ago.
But in this they were a little premature,
as it was stated this morning that some
of the directors who were held RESPONSE
BILE for the losses would appeal from the
Chancellor's decision. This will throw
the matter into the Court of Errors and
Appeals, where it is likely to remain for
some time.
EFFECT OF THE DECISION
So much of the decision as has been
published in this city is construed bv
those acquainted with the facts of the
the case to mean that the Chancellor
holds Directors Bevans, Carroll, Fitz-
patrick, Halliard. Keary, Nc
Bride, Meehan, Perveal Reilly,
and Sheeran responsible for the amounts
lost by the bank through discounts, by
worthless mortgages and funds abb
stracted by the officers of the institution.
The losses by discounts and by worthless
mortgages amounted in each case to
about $50, 600 and the third to over $50, 600,
which, together with interest, will bring
the total amount up to over $1,000 900.
The liability for this amount is under
stood TO be apportioned among the direc-
tors. There are certain portions of the
loss for which one or more of them are
hQld rpcrOncihlo uhfln fnh1 H..
alone.
Still others are primarily liable for one
portion and others secondarily as when
on a note if the maker is not responsible
the.endorser is held to be liable.
AN OFFER REFUSED.
Those of the depositors who objected to
the compromise which the directors offer
ed to make shortly after the bank became
insolvent are jubilant that their objection
prevailed
At that time Patrick Reilly, DE-. O'Cal-
lahan, James Kearey, Patrick Sheeran,
| Farrelly and Hugh Mckay offered the
Receiver, Washington b. Williams,
$50, 000 to release them from any RESPONSE
bility to the depositors.
Mr.. Williams looked with favor upon
| the proposition, but SO much objection
was raised to it on the part of the deposit
| tors that ne referred the matter to the
! Chancellor.
| The latter referred the subject to Vice
| Chancellor Van Fleets .and the Vice Chan
cellor sat three days listening to the OBJ
| jections. He finally reported to the
| Chancellor against the proposition and
the matter was dropped.
| The opinion of the Chancellor appeared
| to have released Mr. Farrelly, who, at
/ that time was willing to bear his propor-
| tion of the responsibility, and Mr.. Mckay.
RESPONSIBILITIES OF FIVE DEGREES.
| In fixing the degree OF responsibility the
! chancellor divided the directors into five
| classes:-
Those who participated in and derived
profits from the unlawful negligent or
imprudent transactions whereby the bank
suffered loss: Those who did not
profit by the transactions, though
they participated therein; those who,
though they were ignorant of these
| transactions by their negligence and the
| improper discharge of their duty
made the loss possible; those who,
though they did not know of the
transactions, negligently failed to
| perform a duty specifically charged
| upon them. Those who though they
| were not charged with a specific duty
were nevertheless under the law charged
with general supervision over the af-
| fairs of the bank.
The Chancellor declares that the bank
| was forbidden to do a discount business
| by it's charter. and that the directors
were not releaved from responsibility if
| they misconstrued that INSTRUMENT.