Evening star., 1934-07-16
Park Receiver Says Stunz
Dominated Institution With
Board in Ignorance.
SEEKING TO RECOVER
MONEY FOR DEP0SIT0RS
Failure to Require Proper Col
lateral or Even to Attend
Meetings Charged.

Bank directors WHO hlleBeuly per-
mitted their institution to be domi-
mated by one man by failing to at
tend to their duties we're severely
criticized today in a suit by the re-
ceiver of the Park Savings Bank to
recover $2,5s5 ,989 from 2S directors Of
that bank
The petition. filed by John F. Moran,
receiver. charges the bank incurred
losses aggregating the amount sought
as a direct result of negligence by the
directors in permitting Robert S.
Stunz, executive vice president, to
dominate the affairs Of the bank.
Stunz committed suicide In March,
1888. when the bank failed TO re-
ceive a license to reopen at the end
Of the Presidents bank holiday.
Some of the allegations against the
directors are that they failed actively
to supervise the officers and employees
of the bank; that they failed to asceT-
tain from records how the bank was
being conducted, relying instead on
information supplied at directors
meetings by an officer Of the bank
who was also a director: that they
failed to inquire into the official con-
duct Of Stunz; that there was no
regular audit Of the banks books;
that the bank had no proper and
efficient bookkeeping system; that
Stunz was negligentiy allowed to
"wantonly misappropriate, waste,
squander and dissipate funds Of the
bank; that the directors knew or
should have known Benedict M. Nc
Neill, an assistant cashier. had de-
faulted in the sum of $4,000, aud
that they failed to examine into the
defalcation, or make proper claim
against the bonding company for
losses sustained through his acts.
Improper Collateral"
It was also alleged that the directors
failed to require proper collateral for
loans.
Another section Of the petition
stated:
LAS an added charge Of negligence
against the defendant, George w.
White, plaintiff alleges that for
period Of more than five years prior to
the suspension Of the bank-that is
TO say, from January /, 1927, to March
s, 1888. the said defendant director,
George w. White, failed and neglected
TO attend each and every or any meet
ing of the board of directors Of the
bank"
Mr.. White is one of the % directors
named in the suit.
In an itemized statement OF losses
the petition charged the bank lost
$4,000 by thefts by StunZ of Gus
toners notes left for collection and
wrongfully sold by him to other Gus
toners of the bank. In each case,
it was said, the customer now has a
claim against the bank for the fun
value Of the stolen securities.
Irregular Credit Charged.
An additional loss OF $152.20521 was
incurred, according to the suit,
through the wrongful advancing Of
money by the bank and the giving
of irregular credit to the accounts Of
and on the notes for and on behalf
of Benedict McNeill. Alexander Nc
Neill and John Mcneil and bad loan
and irregular credit in the sum Of
$7,853.34 on a note executed by Fanny
Cunningham.
Another charge Is that the bank lost
nearly 5000 900 through the paying Of
interest on depositors' accounts, al
though at the time the bank had no
earnings with which to pay this in
terest.
1t is charged StunZ was allowed to
conceal the true condition of the bank
through fictitious entries in the gen.
eral ledger. It Is also asserted the
bank lost $4,000 through the pay
ment of dividends to stockholders
when it did not have sufficient funds
to warrent such payment.
Finally, it is charged, q loss Of
81, ,596, ,976.60 was occasioned through
the irregular transactions of Stunz,
to whom the directors gave complete
charge of the bank without supervi-
sion. investigation or audit to check
the true condition Of the bank"
1t was pointed out that an audit Of
the banks books disclosed that the
actual liability of the bank to deposi-
tors was more than twice that shown
by the general ledger.
Liability Sought.
The court is asked 10 hold the d.
rectors liable on the theory that they
were and are trustees for those en-
titled to participate in the benefits OF
this suit and OF such recovery as may
be had. The liability of the defendant
directors. it was alleged, constitutes
trust fund for their benefit. The d.
rectors are:
Frank E. Altemus. Wade H. Atkin-
son, Charles w. Bolgiano, L. T. Breu-
ninger. Joseph W. Cox, H. F. Dismer,
Peter M. Dorsch, @. w. Forsberg. John
o. Gheen. E. T. Goodman, Charles E
Gross, John H. Holmead, A. F. Jorss.
E. S. Kennedy, Nathaniel MountforS
C. M. Murray, Claude w. Owen, Rob-
ert L. w. Owens, Norman w. oyster,
Henry A. Polkinhorn, George A. Pre-
vost. Maurice Schlosberg. Warren w.
Spencer. William B. Todd, william M.
Wales, George E. Walker, c. c. Wine
berger and Mr. White
The suit was filed through Attor-
neys j. Bruce Kremer, George B.
Springston and Herbert NJ. Bingham.