The daily morning journal and courier., 1897-06-09
DEEAULYEh FOR SG5, ,O00.

rest Occurred May 7-Said to Have Boen Kept secret-how the Defa' cation Was Discovered.
 The fact that James Woodville Sands, secretary of the F. s. Greeley company, which failed October 8, 1896, had been arrested in New York and lodged in Ludlow street jail on May T. became public yesterday He was released the same day on bail of S40,0O0 and is said to have sailed for Europe.
 The E. s. Greeley company, manu- facturers of electrical appliances, is To- cated at and ' Day street, New York. General D. S. Greeley of this city is president and chief stockholder.
 The failure of the firm was caused by the extensive defalcations of Sands. The firm was incorporated in this state in 1887 with a capital stock of $25O,0OO. At the time of the failure the assets were put at $180,0O0 and the liabilities at $160,0 900.
 Application was made for the ap- pointment of receivers to the supreme court in New Haven, and the president and secretary of the company, General Greeley and Sands. were named.
 Subsequently Judge Lacombe in the United States circuit court in New York appointed them auxiliary receivers for that state.
 The arrest of Sands was brought about by the researches of an expert accountant, Frederick w. Child, who was employed by Jones & Laughlin of Pittsburg, creditors of the Greeley conn., pany. to examine the books. Child re- ported that he had discovered extensive discrepancies amounting. it Is said, to about $65,000. The blame was placed upon Sands, and counsel for the receiv- CTS brought suit against the secretary to recover moneys misappropriated." The charges against Sands covered his term of office from January, 1888, to October, 1896. The order for Sands arrest was issued by Justice Smyth in the supreme court on May [, 1897. It states that the ground of arrest is "the conversion and fraudulent misapplica- l tion of moneys and other property by 1 said defendant as an officer and agent of corporation-to wit. the E. S. Gree | ley company, in the course of his en-
 
 I Sands was arrested in his office by Deputy Sheriff Walgering and taken to | Ludlow street jail Late that night his | son-inlaw, William H. Russell, an ar chitect of 32 Nassau street. went to the l jail and arranged for bail. A bond was given for $40,0O0 and Sands was re- | leased.
 Proceedings were then taken before Judge Lacombe for the dismissal of l Sands from the receivership of the company, and Judge Lacombe issued | the order. No one was appoitned in Sands place.
 At the same time papers were drawn up by Attorney Henry G. Newton of this city addressed to the superior court asking for Sands removal as a receiver, on the grounds that he was a defaulter to the amount of $65,000, The matter was held in abeyance, how ever, until the New York case was dis ! posed of It was found that Sands had no means, but his family and friends | had agreed to make good the loss to | the company, the understanding being that the knowledge of the entire af- fair be kept from the public Sheriff Tamsen and Bond Clerk Davis of New York say that there was no secresy observed by them in this case, but that the records of the proceedings were open to inspection as in all other cases.
 Clerk John A. Shields said relative to the matter: There may have been reasons in the interest of justice, as there frequently is, for withholding l 1,,foI T c directed by Judge Lacombe not to make them public. If I was so in- structed obeyed orders That is what I am here for. There are frequent oc- casons when orders of injunction or papers in the nature of criminal pro- ceedings would be nulified in their ef- feet by publication. All papers proper for publicity are free of access to the representatives of the press and to the public"
 Judge Lacombe said:
 Any papers which are filed in actions pending in this court are open to all who are interested in such actions and so far as I know no one who IS entitled to see such papers has ever been refused. As to the rest of the story all I can say is that I haven't heard it; whatever questions may arise in the case will undoubtedly come before me some time in the regular way and will be attended to when they are presented. If the disposition made of them be satisfactory to the parties in- terested that will end the matter, if not there will be abundant opportunity for a review on appeal"
 Sands is about fifty years of age and was prominent in New York and Brook lyn society. The money which he fraudulently obtained from the com- pany he expended it is said, in keeping up a large and fashionable dwelling and otherwise living beyond his means. The facts in this case have been known in New Haven for the past month.
 The money to be obtained will be ap- piled to the estate and will aid mate rially in rapidly adjusting the accounts
 General Greeley expects to wind ur the affairs of the company in about two months and then will permanently re- tire from business.
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