The Detroit times., 1911-05-27
COURT DECLARES
FINANCES JUGGLED
Holds Directors of Michigan Savings
& Loan Association Liable For
$445,000 of Claims.

Judge Swan, of the United States
| district court, has handed down his
decision In the suit brought by Ralph
l.. Aldrich. receiver, against the de-
funct Michigan Savings & Loan as
sociation, In 1903. The court sustains
the charges of mismanagement and
misuse OF funds made against the
officers and holds the directors Of
the company liable for the proven
claims of creditors, aggregating $445,-
6SS.82 For the major part of this
amount three of the former officers
and directors are liable, DR.. John E.
Clark, county chemist, who was presf-
dent Of the concern; ex-Congressman
John b. Corliss, who was attorney for
the company, and Fred B. Wemple,
secretary.
Thomas E. Hancock, vice-president
Of the company, Is held liable with
the others In lesser amount, $1lS,-
92775.
The stockholders are ordered to pay
back about 100000 received in divid-
ends after the company had become
insolvent but before the suit was
started, each stockholder being held
to account for the amount he received
individually.
4 When the court signs the decree
based on this decision II VIII stand Us
a judgment against the directors and
the stockholders for the several sums
mentioned, and the federal authori-
ties may levy on any property they
may find belonging to the defendants
without further process.
received no money from the CON-
pany except about $3.50 per year for
travelling expenses during the seven
years was connected with It." said
DR.. Clark to The Times. "The dis
bursements which the court finds
were illegally made in some instances
were made In good faith and under
the direction of expert accountants. :"
| The history OF the litigation goes
back TO April l, 1901, when Edward
| w. Bishop, an Indiana stockholder
of the Michigan Savings & Loan as
sociation, filed a bill In the United
States district court here asking for
the appointment of receiver for the
company and the winding up of it's
affairs on the ground that 1t was in
solvent On this petition, Mr.. Aldrlch
was appointed receiver and after an
investigation lasting two years, he,
in turn, brought suit against the direc-
tors and stockholders to compel the
repayment Of the money alleged to
be due and to hold the directors re-
sponsible for the debts.
The estate OF George II. Scripps,
one OF the heaviest stockholders, de-
INJURED to this bill and the demurrer
was sustained, but was later set aside
by the circuit court OF appeals, which
found that dividends had been de-
clared while the company was insol-
vent. II Is these dividends the stock
holders must now pay back.
The bill filed by the receiver
made serious charges against the off,
GERS 1t was alleged that improper
reports we're made to the stockhold-
ers, the secretary of state and to the
newspapers, regarding the financial
condition of the company. II was
charged that they "misused and mis-
applied, appropriated and squandered
the funds" that they employed for
years and down to the day OF the as
sociation closed its doors, a dishonest
and incompetent secretary.
In his decree, Judge Swan finds that
the allegations of the bill are substan-
TALLY true