The Mount Holly news. [volume] (Mount Holly, Burlington Co., N.J.) 1891-1942, 1908-05-19

In AN opinion filed by Judge Dill, of the
Court of Errors and Appeals, the methods
Of those Ia charge of the affairs of the
State Mutual Building and Loan associa
ton were severely criticised. This organ.
ization was In such a shape that a receiver
was applied for. This application was
opposed by the officers Of the concern.
Some of the stockholders who asked for
the appointment were paid their claims In
full. This came to the ears Of others
who were In fair way of losing their
money. and they renewed, the APP
plication, with the result that Vice
Chancellor Leaning declined to appoint a
receiver, but allowed trustees to attempt
TO settle the affairs of the association.
The opinion of the Court of Errors
showed that that body took serious
view OF the proceedings thus far
instituted, and the language used In the
opinion was quite strong In part 1t was
as follows:
Insolvency was demonstrated, but,
more than this, there was made out a
prima facie case of malfeasance on the
part of officers and directors The infer
ence Is strong that the appointment of
these trustees In liquidation was procured
by the directors and officers with a view
to covertly maintaining control, not alone
of the assets of the company, but as well
of the institution aud maintenance of
legal proceedings to which officers and
directors might be proper parties. II this
be the fact. then the proceedings resulting
In the appointment of these trustees was
a palpable attempt on the part of the
directors and officers to evade the con-
sequences of the appointment of an in
dependent receiver, whose duty 1t might
be to call the officers and directors to &C.
count and to hold them responsible for
the failure of the company to the extent
that they were properly chargeable there
with.
1.-THE settled Judicial policy of this
State Is Numerically opposed to the
continuance in control, directly or In
directly, of directors or officers against
whom is made out a prima facie case of
wrongdoing In Office and who appear to
have used their official positions as
representatives of the shareholders 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
liquidation upon the procurement of
officers and directors under charges should,
upon proper presentation of the facts.
be allowed to remain in control of the
situation Is not be tolerated. No
officer, director or other party inter-
ested who is under charges should have
an influencing voice In the selection of the
trustees or the receiver who are 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 corporation through the
appointment of an administrator.
"The order of the Court below should
be reversed, an injunction granted and
receiver forthwith appointed, who,
neither by his Official participation in the
affairs of the insolvent company nor by
personal utilization with the individual
directors. will be In any wise embarrassed
In the due administration Of his office and
the strict and impartial performance of
his duties.
Some of the words above are pretty
harsh, but probably no more so than the
case requires. The first three lines cover
the entire situation. They are: 'Insol
veucy was demonstrated. but, more than
this. there was made out prims facie case
of malfeasance on the part Of officers and
directors" Malfeasance Is defined by the
dictionary as wrongful conduct, espec
tally official misconduct; specifically, the
doing of an act which is possibly unlawful
or wrongful" To be brought up on a ]
charge of mslfeasance is very serious, and |
the opinion quoted says there was prima
facie case of malfeasance made out against
officers and directors OF the association.
These officials are all men of prominence
In the various stations OF life, some OF
them having held high positions In state
affairs. one of them now being on board
where he has voice In deciding matterst