Opinion
07-24-1888
WILLIAMS v. HALLIARD et al.
Williams & Cowles, for complainant. Vredenburgh & Garretson, for defendants Smyth and Kelley. Collins & Corbin, for defendants McKay and others. W. M. Dougherty, for defendants Meehan and Keary. Herbert Stout, for defendant George P. Brock. W. A. Lewis, for defendant Farrelly. Peter Bentley, for defendants Reilly and Murphy.
Bill to enforce liability of officers of insolvent savings bank.
Action by Washington B. Williams, receiver of the Mechanics' & Laborers' Savings Bank, against John Halliard and others.
Williams & Cowles, for complainant. Vredenburgh & Garretson, for defendants Smyth and Kelley. Collins & Corbin, for defendants McKay and others. W. M. Dougherty, for defendants Meehan and Keary. Herbert Stout, for defendant George P. Brock. W. A. Lewis, for defendant Farrelly. Peter Bentley, for defendants Reilly and Murphy.
VAN FLEET, V. C. Twelve of the twenty-six defendants in this suit seek to purchase their peace. They offer to pay $47,500 in cash on condition that that sum is accepted in full satisfaction, so far as they are concerned, of all the claims which the receiver is seeking to establish against them by the decree of this court, leaving the receiver free to proceed against the other 14 defendants, and get what he can. When the receiver laid this offer before the court in April last for the purpose of receiving direction as to whether it should be accepted or not, he stated that he was of opinion that it would be judicious and expedient to accept the offer. At that time I fully concurred in that opinion. Since then a part of the persons on whose behalf this suit is brought, have expressed themselves as strongly opposed to the acceptance of the offer. When the bank failed, the amount on deposit was about $219,000. Persons holding about $81,000 of this amount oppose acceptance, persons holding about $42,000 favor acceptance, and those holding the other $96,000 say nothing. The receiver now says, in view of the strong opposition made to the acceptance of the offer, that he is unwilling to take the responsibility of urging its acceptance, but submits the question whether it shall be accepted or rejected to the court without recommendation. So that the offer is now before the court with no opinion by the receiver whether the court should accept it or reject it. In this posture of affairs, I think the duty of the court is entirely plain. The defendants were managers and officers of the Mechanics' & Laborers' Savings Bank. They are charged with gross negligence and willful violation of duty, and the object of this suit is to compel them to make good to the depositors the losses which have been sustained in consequence of their misconduct. Under such circumstances, it is the clear right of the depositors to have the suit prosecuted to final decree, in order that every dollar which the law will give may be recovered. That is their primary right, and that is what a large majority of those who have spoken upon the question of acceptance or rejection say they want. It may be that they want what is not best for them; but at this time nobody can say, with perfect certainty, that that is so. Very decided opinions may be formed both ways, at present, which the future may show are fallacious. The receiver's position in the case is such that the court must, to a large extent, be controlled in its action by his views. He is both client and counsel, and consequently possesses as perfect knowledge of the grounds on which the liability of the defendants rests as it is possible for any person to possess. Besides, he is the trustee of the depositors, and, as such, bound to do the very best he can to protect and promote their interests. Now if, standing in a position where his knowledge is thoroughand complete, and his duty plain, he hesitates to advise the acceptance of the offer,—and he ought not to advise its acceptance unless it appears clear to him that the best interests of the depositors would be promoted by its acceptance,—it is clear that the court should not accept it. An order will be advised directing the receiver not to accept the offer.