Ottumwa semi-weekly courier. [volume] (Ottumwa, Iowa) 1899-1903, 1901-04-25
Important Decision in Van Buren,
County Bank Case.
A BIG DEFALCA1ION COMES TO LIGHT
$4,000 mbezzied-Judge w. !. Babb
of Mt. Pleasant, Renders an Import
ant Decision in Case Concerning
Pennington Bank.

burlington, April 24.-A hltheftO
unrevealed defalcation and sensation
al flight of a bank cashier is made
public for the first time in a decision
received yesterday by w. e. Blake,
one OF the attorneys in the case of the
van Buren, county savings bank VS..
the Pennington Wooden Mills of Far
mlngton, Iowa. The decision is by
Judge w. |. Babb, of Mt Pleasant, as
master in chancery and is a lengthy
typewriter document of twenty pages.
In 1894 G. w. Sharp was treasurer
OF the Pennington Wooden Mills and
also president of the Pennington bank
winch at that time was private bank
ing concern. A few years later the
banking paper of the bank was sold
10 keokuk concern, amounting to
Soo,0O0 and this money was used as
the capital of the Van Buren, County
bank. The Sterling Wooden Mills had
on deposit in the bank at the time of
the change $10,3&0 and this money
was transferred by Lapsley to the
new bank by his check as treasurer.
Then he turned around and immedi-
ately drew check of $4,000 on the
Sterling Mills account, but for which
he had no authority from that compa-
ny. The checks of the Wooden Mills
We're drawn by other officials, and
from the testimony introduced at the
hearing it appears that Sharp's only
interest in the company was that he
had the use of the funds but could
draw no money out on that account.
The officers of the Farming
ton Wooden Mills being una
ware of the actions of Sharpe contin-
ued to draw checks on that account
though Sharpe had drawn out all but
$3.50 of their funds, their books show
ing however, that they had still $4,000
in the bank. Sharpe, by collision
with G. w. Lapsley, cashier of the
bank. kept both bank and mill in ig-
norance of his defalcation and enjoyed
the confidence of both until his death.
This he was able to do by depositing
money with I.apsley to meet the
checks of the Sterling Wooden Mills,
Becoming desperately short of money
and unable to meet the demands of
the company he gave note for $4,000
to the bank, signing it simply as
treasurer" After his death Lapsley
was appointed administrator of the es-
tate and he managed to keep up the
deception for a while. A few years
later he found himself in such deep
water that he was compelled to flee
and upon his departure all the facts
came out though suppressed at the
time.
By the showing of the bank books
of the Sterling Mills. which had been
kept by other officials and which are
found by the referee to have been cor
rect, there was still on deposit in the
bank $4,661
The mills had also given notes for
$4,000 but when the two concerns
came to strike balance the Van Blu
rem County Savings bank showed that
the mill account had been overdrawn
a few hundred dollars and it held be-
sides the two notes drawn by the
bank officials of the mill, also one for
$4,000 drawn by Sharpe as treasurer,
and which it was claimed the Sterling
Wooden Mills are liable for. The lat
ter denied liability for the acts of
Sharpe and the bank brought suit in
the federal court at Keokuk for SO 900.
The decision of the referee, Judge
Babb, to whom the case was referred
as master in chancery, is for the de-
PENDANT and is scathing arraignmentI
Of the acts of Messrs. Lapsley and
Sharpe. The referee holds that the
turning over the funds of the Wooden
Mills from the old bank to the savings
bank was legal, in that he had the au-
thority of the company to do so. His
drawing of a check Immediately there
after for the company he holds to be
without authority and therefore null
and void. The note for $4,000 byI
Sharpe he holds was his individual
act and not that of the Sterling Wool
en- Mills. He further says that the
account of the Sterling Wooden Mills
showing a deposit of $4,661.54 in the
Van Buren, County Savings bank is
correct. but as an Offset to this should
be taken the two notes aggregating
$4,000. Consequently he finds that
the Van Buren, County Savings bank
is indebted to the Sterling Wooden
Mills to the amount of s161.54 and the
Judgment for this amount and cost is
rendered.
The entire loss of or defalcation of
over $4,000 falls on the Van Buren,
County Savings bank.
IOWA BANK ROBBERIES.