Stockton Herald, South Durham and Cleveland Advertiser. — 1881-11-26 (Stockton-on-Tees, Cleveland, England)

HERITABLE LOAN COMPANY  AND THE RESPONSIBILITY OF DIRECTORS.  In the Court of Session, Edinburgh, Lord M'Laren has justgiven judgment in an action at the instance of Mr lodd-Lees, S.S.C., Edinburgh, against the directors of the Caledonian Heritable Security Company, at present in liquidation, for £l,lOO in respect of loss sustained by him in the purchase of shares in the Company. The pursuer alleged that he had been induced to purchase the shares through falai) representations as to the state of the Company's affairs made in the directors' reports. It was also alleged that the liabilities of the Company under the head of deposits were over-stated to the extent of £12,000 in 1874, £17,0043 in 1875, £25,000 in 1876, and £26,000 in 1877. The defenders denied that they had made false representation—Lord M'Laren, after reviewing the evidence, decided in favour of the defenders, with expenses. In the course of his observations he said it appeared that sums varying from £6,000 in 1874 to £52,000 in 1877 were advanced on current accounts to other companies, and chiefly to two, the Caledonian Provident and the Edinburgh and Glasgow Heritable Security Company, and which accounted partly for the difficulties of the Company. The true character of the transaction was not disclosed in the reports and balance-sheets, but it was explained in the course of the evidence that the Caledonian Company had been induced to accommodate the other Company by the necessity of finding an immediate outlet for its uninvested funds. There was no doubt , that the shareholders ought to have been informed of this state of affairs, and that the suppression of the fact, from whatever cause, was a misrepresentation of material facts which might have had an influence on intending purchasers of the Company's stock. He had considerable difficulty, however, in forming an opinion as to whether the directors were to be held , responsible for this misrepresentation or ' suppressio yen. He was satisfied on the evidence that the directors of the Company were cognisant of the case, in dealing with which their uninvested funds were lent on accounts current to other companies; but he did not think that they were aware of the extent to which the system of accommodation had been carried. His lordohip held that the directors were entitled to rely on the accuracy of the balance-sheet as prepared by their manager and certified to by their auditor. Consistently with this opinion, he held that it was the duty of the directors to examine the balance-sheets before submitting them to the shareholders, but in a question with a member of the public he was not prepared to say that the directors could be made responsible for inducing people to buy. Mere negligence must not be confounded with fraud in a question with the public. He did not consider that the defenders were to be taken as guaranteeing or vouching anything more than this: that the particular balance-sheet in question was entitled to all the credit due to a document compiled by trustworthy office bearers from the books of the Company, and certified by the auditor of the Company as correct.  BAD CAM Or Stitook.—A painful case of suicide occurred on Thursday at Invernrie, Aberdeenshire. Mr McKenzie, who is a Town Councillor of Inverurie, reported to the Aberdeenshire constabulary on Wednesday that gold and notes, amounting to £23, deposit receipts for £3OO, and silver forks and articles of clothing had been stolen from his house. A policeman found the property in the bedroom of Mary McKenzie, a niece of Mr McKenzie, engaged by him as domestic servant, and she was taken into custody. Her uncle and aunt induced the local inspector of police not to send her to the lock-up, but to let her pass the night at his house, two policemen remaining there on duty. She escaped while the constables were aeleep, and her body was found on Thursday morning in the River Uric, a short distance from the inspector's house.