Gloucester County Democrat. (Woodbury, N.J.) 1878-1932, 1908-05-14
RECEIVER FORSTATE MUTUAL

The decision of the Court Of Errors re-
Eersing chancellor Leaming's decision
in this famous case was announced after a
conference last week, but the opinion filed
last Monday indicates that the court takes
most serious view Of the methods en-
ployed by the officers of the association. 1t
holds that the act under which the trustees
were appointed is not applicable to insol-
vent building and loan associations, but it
is intended only to permit the winding up
Of the affairs Of solvent corporations where
the creditors are not involved and where
the shareholders can see that their own
interests will be best conserved by the dis
solution of the ASSOCIATION. The opinion
concludes with the following statement =
Insolvency was demonstrated. But
more than this, there was made a prima
facie case OF malfeasance on the part of
officers and directors. The inference is strong
that the appointment OF these trustees in
liquidation was procured by the directors
and officers with view to covertly main
tain the control, not alone Of the assess of
the company, but as well OF the institution
and maintenance of legal proceedings to
which officers and directors might be proper
parties.
s'If this be the fact then the proceedings
resulting in the appointment Of these trus-
tees was palpable attempt, on the part of
the directors and officers, to evade the con-
sequences of the appointment Of an jnde-
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call the officers and directors to account
and to hold them responsible for the failure
of the company to the extent they were
properly chargeable Herewith.
''The settled judicial policy Of this State
is Numerically opposed to the ontinuance
in control, directly or indirectly, of direc-
tors or officers, against whom is made out
prima facie case OF wrong-doing in Office
and who appear to have used their official
positions as representatives OF the sbare-
holders to their own financial advantage
and to the resulting injury Of the company
and its shareholders.
THAT any person or persons appearing to
have been appointed as trustees in liquida-
tion upon the procurement OF officers and
directors under charges, should, upon a
proper presentation of the facts, be allowed
80 remain in control Of the situation, is not
to be tolerated. No officer, director or other
party interested who is under charges should
have an influencing voice in the selection of
the trustees or the receiver who is to pass
upon his acts.
Both under the law and upon the facts
the Court Of Chancery should have assumed
the administration of the affairs Of the cor
poration through the appointment of the
receiver.
''The order Of the court below should be
reversed, an injunction granted, and a re-
ceiyer forthwith appointed, who, neither by
his official participation in the affairs Of the
insolvent company nor by personal afilia-
tion with the individual directors, will be
in anywlse embarrassed in the due admin
istration Of his Office and the strict and i'm
partial performance of his duty
The suit was brought by Patrick Fitz-
gerald, who was represented by Joseph
Kaighn, Daniel " Summerill, Jr., Joseph
J. Summerill and Guild, Lun & Tamblyn,
while. .Messrs. Armstrong, Iszard and Wilson,
Carr & Stackhouse represented the de-
PENDANTS. y