New-York tribune., 1911-11-16
SATTERlEE AND GOULD
WIN THEIR APPEAL
Appellate Division Orders New
Trial in Case Involving La
biIity of Directors.
DECISION OF IMPORTANCE
Court Holds Calamitous Con
struction of Law Preventing
Big Business Men Acting
as Directors.

Albany. Nov 1.-THE broad question OF
the liability OF directors OF trust companies
for losses due to their alleged negligence Is
discussed at length In an opinion by wal
ter Lloyd Smith, presiding justice Of the
Appellate Division. Sd Department. which
to-day reversed the decision OF Supreme
Court Justice Van Kirk holding Herbert
L. sattorlee and George J. Gould, OF New
York liable for losses sustained by the
Trust Company OF the Republic. of which
they were directors. as a result of the COM
pany's part in attempting TO finance the
United States Shipbulding Company.
The court holds that any construction OF
law that would make Il impossible for men
OF large business connections TO accept po-
stlons on various boards Of directors with
out a detailed knowledge Of the small
everyday transactions Of the corporation
would be little less than cslamitous.'
With eleven others the defendants were
,ued by Charles II. Kavanaugh, OF Water
ford, a stockholder. who sought 10 recover
for losses sustained by the trust company
through loans made on securities OF the
United States shipbuuilding Company in
the GUNNER of 1872. making necessary the
reorganization OF the trust company, which
it now known as the Commonwealth Trust
Company
The case was tried at Saratoga Springs In
the summer Of 1902, and differed from other
stockholders suits previously brought
against directors OF trust company or
hank because the trust company had not
closed It's doors. Kavanaugh, who was rep
resented by Senator Edgar T Brackett, Of
Saratoga, sought to hold the former direc-
tors liable for losses sustained, on the
ground that the losses would not have been
incurred II the directors had attended meet
,ngs OF the trust company in the summer
~ iec
Judgments Against Directors.
Justice Van Kirk decided in Kavanaugh s
favor not only as 70 the losses on loans, but
as 10 $500 which D. Leroy Dresser. pres
dent Of the trust company. took with him
when he went abroad on business in con-
nection with the shipbUdlng company.
Judgments ranging from $4,000 to 1850, 900
were found against each OF the trust com
pany directors. Perry Belmont, Charles D.
Marvin. James Mcmahon, Thomas Grim.
Minis, Charles W Wetmore, William d.
Baldwin, Ballard Mccall, Charles F. Brook
ar. George J. Gould, Elbridge O. Snow,
Herbert l.. Satterlee, George G. Boldt and
stuyvesant Fish.
Justice Van Kirk held each defendant II
able for loans made at any time while he
was a director. although the losses result
81 after the termination of his directorship.
and found judgment against Mr. Gould for
$1,000 and against Mr. Satterlee for $4,000.
As to Mr. Satterlee. It was Shown on the
trial that he attended ell the meetings Of
the directors except one, until he went
abroad, and all the meetings after his re-
turn until he resigned in January, 1903 The
showing as 10 Mr.. Gould was that he was
director from April 30 November, 1902,
and had never attended meeting Of the
directors during hs term Of Office, although
le was IN or near Now Vow
The appeal Of Mr.. Satterlee brought up
the question squarely as 70 whether a di
GERS while he was out of the country. The
issue raised by Mr.. Goulds appeal was
whether director is bound 10 attend
meetings in their regular occurrence, and
whether he may not ful6l the requirements
of his duty, although he IS absent from
an meetings for six months even. provided
lie attends and makes up the average dur
ing the latter part OF the year
The other former directors. against whom
judgments were found and who had at
tended a greater or fewer number OF meet
appeal. Messrs. Gould and Satterlee did
lot settle. believing the principles involved
warranted an appeal