The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1899-06-09
THE DIRECTORS LIABLE
A NEW POINT Is URGED IN b. AND l..
LITIGATION.
George Greyer Sues Board of a De-
funct Association - Supreme
Court Decisions.

George Greyer. of Anderson yesterday
filed suit by his attorney. Walter A. Royse,
against Granville NJ. Ballard, Charles X.
Haverfield. William c. Smock. William c.
Thompson and James NJ. Heller, the for
mer directors of the Industrial Alliance
Building and Loan Association. to recover
from them. under allegations of fraud. the
money that he paid into the association as
stakeholder. II was on Greyers suit filed
in February. that the association was
placed in the hands of a receiver, James
p. Baker being appointed. The technical
charge in the complaint filed yesterday is
fraud on the part Of the defendants, grow
ing out of their acts in sending out agents
distributing prospectuses and soliciting sub
scriptions TO stock when the association
was insolvent and becoming more deeply
involved all the time.
The complaint proceeds on the theory
that II is fraudulent for the directors,
knowing that an association is insolvent.
TO hold out to the world that it is a solvent
money-making institution and secure mon
ey from people unacqusinted with its con-
dition, on such false representations. 1t Is
the first case of the kind ever filed in this
State and will raise questions OF much in
terest to all officers and directors of build
ing and loan associations, and especially If
the association is not in very prosperous
condition. While the questions raised are
new to the building association interests of
the State. they are not new in principle.
1t has been held In many cases that direc-
tors of corporations are personally respon-
sible for the loss that occurs to any one
through reliance in false statements know
f.,<~r
culars sent out for the purpose of securing
deposits or investments.
In this case Greyer subscribed for twenty
shares of stock and later bought from his
son i've more shares, on which he paid In
all $312.i0. in twenty-five monthly payments.
He alleges that he was induced to subscribe
for these shares by one Peterson. an agent
of the association, sent out by the order OF
the directors. who represented to him that
the association was In solvent condition
and making a large profit for its sharehold-
ers. and would continue TO do so. 1t Is al
legged that these representations were false
and fraudulent and made in furtherance of
a conspiracy entered into by the defend
Greyer says that In May. 1898. as soon as
he learned of the insolvent condition of the
association. he demanded the withdrawal
OF III reafn s. noRR Rs
suit in the Superior Court, asking for re-
ceiver for the association. and James p.
without any contest on the part of the as
ISOLATION. An examination OF the books OF
the association since then, IL Is alleged.
shows that the stockholders will lose at
least 80 per cent. and that ii may be that
the association will not be able TO pay more
than 20 cents on the dollar. In his COM
stock at more than 20 cents on the dollar,
or s62.5 for the entire twenty-five shares.
He offers to credit this on the amount the
assign the shares TO the defendants. Inter-
est and expenses bring his claim up to $500.