Detective Sergeant Lally succumbed to gunshot wounds received the previous night while supervising a New Year's Even celebration at the Columbia Club at 3909 Lindell.

At 3:30 am on January 1, 1927, no trouble had occurred at the party and he and his partner, William Mehringer, split up and headed in opposite directions. Shortly afterwards a car pulled up to Sergeant Lally as Laclede and Lindell Streets and the occupant shot Sergeant Lally twice with one round striking him in the chest and one in the knee. Critically wounded Sergeant Lally fired five shots at the fleeing vehicle as he lay on the ground. Due to the noise of the New Year's Eve revelers, the sound of the shooting did not attract much attention. A citizen John Manestar heard Sergeant Lally groaning in pain and rushed to his aid. After describing his assailant and stating that he did not recognize him, Sergeant Lally lapsed into unconsciousness and died on January 2nd at 12:00 am at Jewish Hospital.

Sergeant Lally helped solve some important cases in his twenty-seven year career. He most recently helped solve the $97,000.00 Drover's National Bank robbery. Sergeant Lally shared the $6500 reward offered for the case.

Detective Sergeant Lally had been with the agency for 28 years joining the department in 1899, was promoted to detective in 1907 and to sergeant in 1917. He was survived by his mother.