Pittsburg dispatch. [volume] (Pittsburg [Pa.]) 1880-1923, 1891-12-17
M'CALLIN'S ANSWER
To the Claim of the Modern Building
and Loan Association.
SAYS HE CANNOT BE HELD LIABLE
Because He Became Surety Under False
Representations.
An ABUNDANCE OF BUSINESS In COURT

Attorney Morton Hunter has filed the
answer OF Mayor McCallin to the suit Of
the Modern Building and Loan Association
of Pittsburg against Theodore Doerf1inger,
William McCallln and Augusta Doerfinger.
The suit was to recover S., 900 on the bond
of Doerfinger. as treasurer of the associa-
tion, on which McCallin and Mrs Doer-
finger were sureties. In the answer it is
claimed that the sureties are not liable. and
the association is arraigned at length.
1t is first asserted that the filing of the
plaintiffs affidavit was premature. A
statement of the alleged short
age was requested by McCallin
from the attorney Of the association,
c. C. Lee, and the agent, J. McCrickart.
They could not give it, the books being in
The hands of an expert and the amount not
being then known. On this account the
plaintiffs were not entitled to proceed. 1t
is further denied that the treasurer, as al
legged, has failed and refused to turn over a
large amount of money in excess of the
amount of the bond, or that there was any
breach of the conditions of the bond. 1t is
further denied that there was any embezzle-
ment, if any at all, since the bond was ex-
ecuted, May, 1891. IF there was any en-
bezzlement it was long before that, and the
defendants are not liable. Doerhinger was
treasurer from the beginning of the associa-
tion, March, 1888.
The Blame the Plaintiffs.
He was reelected annually, and during
his terms the association published semi
annual statements of its financial condition
and audits of its books and accounts, for
distribution among the shareholders and
the public. From these statements it ap-
peared that its affairs were being prudently
and honestly administered, and thereby in
duced the public TO believe that the treas
urer had up to that time, the date of the
last statement which was shortly prior to
the giving of the bond, acted as an honest
and trustworthy person, and the de-
PENDANTS were thereby induced to become
surety for the treasurer, when, if
as alleged, he was an embezzler, he
had been guilty of embezzlement during his
former terms of Office. which might have
been discovered by thu plaintiffs by the e1-
ercise of slight diligence.
The natural and necessary effect was to
deceive the defendants and conceal from
them facts increasing their risk and suffer-
presslonS. BY this course on the part of
the plaintiffs the defendants contract of
suretyship became invalid and they are not
liable. The statements and reflections were
an implied guarantee TO the defendants that
the plaintiffs had audited the treasurer's ac-
count and called on him to turn over all
money in his hands semi-annuslly;
also that the Board of Directors had ex-
amined his books frequently and seen that
he had attended to his duties faithfully as
required by its own bylaws. 1t was further |
its own bylaws and so allowed the treasurer |
10 embezzle.
Disregarded the Bylaws.
The bylaws required that the Board of |
Directors or any officer neglecting or failing |
10 perform their or his duties as required |
hv the bylaws, became liable for all loss or |
damage resulting from such neglect The |
charter and bylaws of the association pro-
rided that as soon as the price of
share, $780, accumulated it was to be loaned |
to the highest bidder. Stated meetings I
every two weeks was to be held to auction /
of, the money. If this had been done more
than 5000 could never have been accumu-
lated in the hands of The treasurer This
was disregarded and large sums allowed to
accumulate. The money, further, was not
auctioned at sta ed meetings, but the prior
ity of the loan determined by some illegal
method and there was nocompetition no for the
loans
Another rule was that money was to be
paid out on a voucher, countersigned by the !
president and secretary. This was to be
given to the person for whom the money
was intended and to serve as q sight
iraft on the bank. The vouchers, however.
were given to Doertlinger an2 he could
thus withhold them, the parties not know
ing the money was due them, and embezzle
he money 50 withheld. If any money was
it was asserted, ii was in this
manner.
If there was any embezzlement, it was as
serted, it was commenced in April. 1890,
md the plaintiff by its own neglect did not
discover it until October, 1891, when bv a
slight effort and reasonable attention it
,oGld have discovered it at once. The
plaintiff was, therefore, negligent and
guilty of a fraud in law. For these reasons.
i is asserted, the sureties are not liable on
he bond.