New-York tribune., 1911-11-16

larities IN the proceedings of the bank theE
are bound to take steps To correct thoso
irregularities. They are bound geneIaiiy
TO use every effort that prudent business
man would use in supervising ms own
affairs -
Business men Of New York are probably
the busiest men in the world. They nav
large business enterprises In when lnel.
frst interest lies and TO which their iirst
duty belongs. Most of them are dlreclolSs .
OF more than one corporation ana soiiiss 20
them of many. If they are compeiieo ~
supervise the detail management OF eaon ~
corporation in which they are directors, % os
II they are deemed to have constructive
knowledge of such facts as wouiu re O.
qUired by such supervision, 1t Wouiu pe
wholly impossible for them to accept sutn ~
~ trust They cannot give the tlnle 70 ~
watch the small everyday transactlGJ,,,9 J,,
of the corporation, and II chargeapie VIII
such knowledge as would be acquired theIe
from the risk is too great for them 10 aHi Sie
They are then in effect made ensWerau3,to
Tor tho neglect OF the executive CONN., CONN.,
tee to which is given this duty OF supe
vision. 49,, n,,,st
Plaintiffs contention Is that they must
not then accept the position as ulIcCt0 t.
The obvious answer to TINS cohtSh.,loun ~ &c
that the corporation cannot aloIu or,ora- ~
them One OF the best assets OF coIpole
ton Is the advice and assistance OF nle' me,
OF business experience ana OF lddSo u" d
ress connections upon its board. nelr - &c
vice aud assistance Is or inesutnapIls I n"ipo iLo
In ali emergencies and in determinihs ,ly
no,ic,os % or Tho corporatIon and IN counsel
rpon the more important quesuunS that
arise. Any constructor OF lEe l"m 20
would make IL impossible for such men :, ~
accent positions upon various boards OF l 6l-
rectors would seriously impair botn tlc
effectiveness and stability of corpora'io'9'
IN fact, be little less than calamitouS'
Not in Accord with State Law.
The court holds that the plaintiffs asser-
tion that the directors may delegate to the
evecutive committee their work but not
their responsibility is not in accord win
tbe law of this state. The court draws
distinction between the diligence requ"eu
by director generally and MEMBER o'
the executive committee.
So far as the defendant Gould was con-
cerned, the court says as a director gen
orally he was charged neither 'actuahS
nor constructively with the knowledge oi
the making Of any Of these loans or OF the
collateral upon which they were MADE
Mr.. Gould consented 10 go on the board on
an understanding with President Dresser
that he should not be called on TO attend
any of the meetings OF the boaro' pu'
| would simply allow the use OF his name II
the directorate. This agreement, the court
holds. was clearly beyond the authority o'
| Dresser TO make.
In the case Of the defendant saterlee
! the court says:
! II would seem that he had been thor
oughly diligent, both before his Vacauor
| and after his return therefrom. ana WIN.
out fault in taking that vacation ne CenlliV,' Cni,
he held TO have been guilty OF any negn
gence which could have caused loss 10 Inv
| company.
The $500 which President Dresser DIRE"
before he went abroad. the court says was
not submitted u the executive committee
and the board OF directors had no knoWl-
edge of II.
Whatever irregularities Dresser hao
been guilty Of prior to this time SAYS the
court. none Of them involved any personal
! dishonesty
| The court grants a new trial, all con
! curing except Justice Kellogg. who wrote
a separate opinion in support or Jusucs
Van Kirk's decision, with lnodlncauons