New-York tribune., 1906-07-07
VCURDY NOT LIABLE
,u7TITaL COUNSEL'S VIEW.
Uah associates, Had Right to Bug
Lascycrs' Mortgage Stock.

qvpressGent Aiccurdy and certain other officers
= ,,en5efs 81 the finance Committee OF the M,i-
-, T,ge Insurance Company are not under any
80 liability 70 the company By. she transaction
e,,sin o00 shares Of the Lawyers Mortgage In
80 company stock were purchased BY them
'-sfsuaIIy and subsequently sold at a consider
- proht This is the conclusion IN a long legat
-..,on lust rendered 10 President Peabody by Jo-
- 4 and william .. -Choafe, special counsel
~ James McKeen, general solicitor OF the COM
paHy .,o,, ......,
-.r,b az May 1901. was the subject of investiga-
-, bg the Armstrong committee. Atfhat time
: w Coggeshali, president of the mortgage in
.,nce company. said that ne had offered 1000
,ssrss Of new Issue OF stock OF the company 20
-. Mutual Life. through President McCurdy. al
-, earne Price il was offered to Old stockholders
-. /. share This offer was rejected by McCurdy,
- ths JO0e shares we're afterWard subscribed for
,s,vJsualv by McCurdy and certain other officers
- mssnbers Of the finance committee. Officers of
:. mortgage insurance company had made the
.,s.l offer TO the Mutual. and some OF them sup
80 that the stock had been taken by It.
~ opinion by the counsel of the Mutual Life
=, maj Henry Morgenihau who had $500 shares
!, he stock 1part o. which it was decided TO offer
= me wuti:an also failed to persuade Mr.. Nc
,,,rsr 70 subscribe on hehalf OF the company. The
,.,,er objected an the ground that company with
o,ir & 00oosO capital would not be strong enough
u gusrantee the large amount OF mortgages put
AT and II the Mutual gas stockholder it might
- under obligations TO take mortgages 1t would
-, otherwise wish 10 take. ~
Tbereupon s. d. Juilliard. a-member OF the finance
committee Of the Mutual. promised 10 take 1000
fhsres individually condition that he could dis
,.ss Of them as he wished, according to the opin-
9n On this agreement the stock distributed
"a various trustees OF the Mutual as follows: Mr.
Nccurdy. NJ. Juilliard and G. G. Haven. each 200
shares; Vice-Pres dent Walter r. Gillette, Fred
elck CromFe l. James y Jlrsiel and Adrian Iselin
II. each 100 sharcs. Then the opinion goes on to
say:
II does not appear what influences were brought
20 bear upon M McCurdy 10 take part of Ihis
eepi as above stated. were members of the finance
committee. ana in fact constituted with Mr. Nc
curdy the finance committee. they wee all very
intimate. and in the haDit of going into business
transactions together Nj; Juilliatd and several
others 0f The purchasers sold their holdings
q pToht Of - 9el cent or more, within few
safsequently the stock OF the Lawyers. Mortgage
Insurance Company was increased to s2,5p0000. Tns
sss y ~ sne ss ~ S aliu ia a. & SL ule III & ne MUTUAL m m
With the approval OF Mr.. McCurdy. president.
on this state OF facts me question is whether the
Individual purchasers OF the stock. or either OF
them has incurred any legal liability 10 the
Mutual ~ reason Of this Transaction eilfier in re-
snpff Ia me sfares purchased v them or lhe nro-
cseds thereof. or in any other respect
As 20 all OF the purchasers, except SIR. McCurdy
Mr. Juilliard, II IS 100 plain 10 need discussion
thar their action in no Nay Wronged Inc Mutual;
they onered certain stock at certain price.
Ehch they told believed was a good pur-
chase and they took it, They had no knowledge
q he same having ueen offered 10 the Mutual II
esnR0l. OF course. be cOntended that every good
thing that offered them they we're bound 10
iIm iG % The Mutual offer to il. merely because
iBeg happened "a be officers members OF its
finance t9nmttee. Mr. McCu Curdy and Mr. .Juiliiard
knew that the offer mad been made. and the fur
ihfr question is whether this created any obligation
their part the part OF either Of them 10
atstal from purchasing their individual
In respect 10 Mr.. Juiliiard. he seems to nave been
Ellng that thu company should buy II the pr5si-
cent coud be induced 10 approve OF the purchase
enc bring the matter before the finance committee.
Nf see no ground whatever on which he could be
Ted liable 10 damages to the Mutual for the profit
rlc1 II would have made Or might have made If
j had purchased the stock. OF how he in any
Eag disabled IN law by reason of his membership
on he finance committee from purchasing on his
0sn account after that effort failed.
IN respect 10 Mr. McCurdy, the president. and
assuming the most that can be urged 10 his
motive IN not allowing the Mutual to become the
purchaser. namely. that he did IL. not because he
do not believe that tie purchase would be advan-
ageo1s 10 the Mutual, but because ne irritated
With the parties who offered il. by reason Of their
not fgFmeTly Offering something else. which had
proved 10 be good subject of purchase. We think
% ground Of legal liability is shown against him.
y cannot be claimed that the president of the
company even II il has a large amount Of unem-
eegeo and uninYested money is under legal
gonsauon 70 accept behalf OF the company every
sllent onered which. in his judgment. would
le hkely TO be prota bic investment He Is bound,
= course. 10 general fidelity in the matter Of invest
"ehls' as well as in all other matters.