The Jersey City news. (Jersey City [N.J.]) 1889-1906, 1889-12-14
ALL RESPONSIBLE
Each Of the Mechanics
and Laborers' Bank
Directors Liable.
DEGREE OF CULPABILIrY.
This Statement Shows Just How
Much Each Will Have
to Pay.
DEGREE OF CULPABILIIY.


and Laborers' Savings Bank, have given
rise to so much uncertainty that no one
of those interested could tell exactly how
the decision affected him, nor could the
depositors make up their minds as TO
what they had gained.
THE JERSEY CITY NEWS is enabled to-
day to present the fullest possible and
the fullest intelligent abstract of the
decision, and show the amounts for
which each one of the directors is liable
$50 QUESTIONS IN THE CASE.
The case was declared by Vice Chancel-
lor Van Fleet, who considered one phase
of it to be one if not the most complicated
of cases in the history of the Court OF
Chancery. On the argument, Mr. Y. Cor
bin said the cause presented $50 dlstlnct
Issues In view of these facts some idea
of the work which the Chancellor mas
had to perform in arriving at conclusion
can be obtained.
The opinion begins with a history OF
the bank and the connection JhereWlth
of each one of the twenty-five defendants:
Sidney B. Bevins, George 2. Brock,
Henry Carol, Adam :. Ditmar, lanes
w Donelson, Aneas Fitzpatrick, Patrick
Farrelly, John Halliard, Joseph Kerry,
John McGuigan. the executors of Owen
T. w. Mcdonald, Patrick Meehan, John
Miller, Matthew Monks. John h. Murphy,
Thomas C. O'Callaghan, Charles w. Per
vail, executors of Patrick Reilly, james
j. Reid, executors of jeremiah sweeney,
Patrick Sheran and Robert Smyth.
POINTS IN THE DECISION.
He finds that as between the receiver
representing the depositors and the de-
PENDANTS, the defendants are all liable TO
the extent of the amounts found against
them, but as to their liability to each
other, that they are to settle between
themselves.
The twenty two loans, which the re-
ceiver claimed were made on inadequate
landed security,is is next considered. These
the Chancellor finds were inadequate,
and then he proceeds to fix the liability
therefor.
A CARELESS TREASURER.
Patrick Reilly, who was treasurer OF
the bank, he declares, performed his
duties as such treasurer in grossly care
less and improper manner. He would
sign sheets of blank checks in the check
book and leave the book at the bank.
Halliard, the president. would take as
many of these checks as he might need,
and fill them in to suit himself. The
Chancellor lays great stress upon the
point that simple inspection OF the books
would have led a careful man to an in,
quiry which would have disclosed the
condition of the bank.
"In the bylaws" the opinion goes on
to say, sit is made the duty of the Execu-
tive Committee to examine the books, and
if they had done so this culpable infrac-
tion of business rules would have come to
light"
The same neglect appears in the exami-
nation of securities A bundle of papers
and list were provided by the secretary,
and the examination consisted simply in
checking the items as they were called of
by the secretary.
Even fictitious mortgages, the Chancel-
lor says, were put in to account for miss
ing money. The finance committee seems
TO have exhibited similar indifference.
DEGREES OF CULPABILIrY.
"Where loss has resulted from dishon-
esty, disregard of the charter require
ments or culpable negligence" says the
opinion, ''al1 the defendants who are
chargeable with such faults must be held
alike responsibles so far as the receiver is
concerned. without reference to the de-
gree of dereliction; butamong themselves
there may be degrees of culpability."
The five classes of culpables are then
fixed as published in THE JERSEY CITY
NEWS of yesterday, and the question of
the loans on second mortgageS is dis
cl1ssed at length.
The Chancellor arrives at the con-
clnsion that for a savings bank to take
second mortgages was unwise and grossly
impurdent. and those who consented to
such transactions must be held re-
sponsible. He then takes each loan of
this nature and fixes the liability as fol-
lows
PATRICK REILLY's LOSS.
Loan of Sl,120 to Patrick Hyland with
interest from May l, 1873. John Halliard
primarily and Patrick Reilly secondarily.
Loan of $240 to John Winkler with in
terest from October !, 1876. John Halliard
primarily. Patrick Reilly secondarily.
Loan of $3.50 to Arthur Dundon with
interest from March l, 1871. John Hal
lard primarily, Patrick Reilly seconarily.
Loan of 81 200 to Betsey Robertshaw.
An accounting on this loan is ordered,
and if it appears there was loss to the
bank such loss falls primarily on John
Halliard and secondarily on Patrick
Reilly.
interest from November ], 1S75-John
Halliard primarily and Patrick Reilly
secondarily.
Loan to Arthur H. Dundon of $1,000,
with interest from November !, 1877
John Halliard for the whole amount;
Patrick Reilly for 5000 and interest.
Loan to Matthew 4. Maloney for $500.
the property was bought by the bank for
s.. 500 and some rents were collected by
The receiver An accounting is ordered
on this loan and the liability placed upon
those who were managers OF the bank at
the time.
chased for s., ,427 81 and we're asubsequent
loss to the bank. John Halliard and
Aneas Fitzpatrick are held liable prima-
rily and Patrick Reilly secondarily.
Loan on property of Jeremiah O'Sulll-
van. $500, with interest from May l,
1S7s-John Halliard primarily, Patrick
Reilly secondarily.
Loan TO Richard H. l.. Tighe of 81 ,20C
with interest from November |, 1878; John
Halliard primarily, Patrick Reilly second
arily.
Loan TO Martin Doyle Of $500. The bank
bought the property in for $3.50 on fore
closure. When sold at public auction by
the receiver it was so heavily encumbered
with unpaid taxes that it brought only
S35. john Halliard is held primarily for
the loss and Patrick Reilly secondarily.
Loan of $4,000 to David M. Neeley,
nephew of Halliard, of which S2,6SS. 2.
was lost John Hailiard alone held
liable.
Loan to Adam ]. Ditmar of 81 800 An
accounting ordered to ascertain loss and
Halliard and Ditmar alone responsible.
loan of $4,000 to Owen I. w. Nc
Donald, $1,000 OF which was lost. John
Halliard and Owen 7. w. Mcdonald
responsible primarily and Donelan, who
At this time had become manager, ano
Patrick Reilly, secondarily.
The Chancellor also hold those who