Phillips State Bank (Chicago, IL)

Episode Information

Episode UID
2011971590
Episode Type
Run → Suspension → Closure
Bank Type
trust
Bank ID
201197 routing
Routing Number
2-0119
Start Date
June 1, 1932*
Location
Chicago, Illinois (41.850, -87.650)

Metadata

Model
gpt-5-mini (chosen from majority vote of a three-model LLM ensemble)
Short Digest
1cfd309dc31762e9

Response Measures

None

Description

Receivership actions were later the subject of a successful court challenge declaring many appointments void.

Events (3)
1. June 1, 1932* Receivership
Newspaper Excerpt
The depositor charged that appointment of receiver for the bank was void ... suit brought by depositor of the closed Phillips State Bank and Trust company Chicago.
Source
newspapers
2. June 1, 1932* Run
Cause
Bank Specific Adverse Info
Cause Details
Heavy withdrawals following the bank's recent assumption of liabilities of other failed banks and acquisition activity undermined confidence.
Newspaper Excerpt
There had been heavy withdrawals in recent weeks.
Source
newspapers
3. June 21, 1932 Suspension
Cause
Government Action
Cause Details
Bank was closed by the state auditor at the board of directors' request after heavy withdrawals.
Newspaper Excerpt
The Phillip State Bank and Trust company ... was closed by the auditor yesterday at the request of the board of directors.
Source
newspapers

Newspaper Articles (15)
1. June 22, 1932 Chicago Tribune Chicago, IL
Article from Chicago Tribune, June 22, 1932

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Article Text

PHILLIP STATE BANK IN ROGERS PARK IS CLOSED Two National Banks of Chicago Shut Doors. The Phillip State Bank and Trust company, 7001 North Clark street, was closed by the auditor yesterday at the request of the board of directors. The bank was capitalized at $500,000 and its surplus and un. divided profit account was carried $285,000. Its deposits at the time of closing were $2,100,000. There had been heavy withdrawals in recent weeks. Trust Company Taken Over. The bank on June 2 acquired the Cook County Trust from Moe Rosenberg, side Democrat politician, through the purchase of $200,000 of preferred stock and 10,000 shares of stock. A year in July 1931, the bank assumed the liabilities of the Illinois State bank, which closed owing $385,000. The Illinois State bank was neighboring bank and the assumption of its debts was declared by Phillip bank officials to be contribution to the of Rogers Park." C. A. Beutel was president of the Phillip bank and Barnet L. Rossett was chairman of the board. Two National Banks Closed. Two national banks were closed yes. terday. One was the Peoples Bank and Trust 1542 West 47th street. The board of directors asked A. P. Leyburn, national bank examiner, to close the doors of the bank. It had deposits of $3,007,000, capital of $1,000,000, surplus of $250, 000 and undivided profits of $110,000. The bank had deposits of $12,000,000 in June, 1930. The Standard National bank of Chi. cago, 7921 South Ashland avenue, was closed. This bank had capital of $300,000, surplus of $25,000 and deposits of $300,000.

2. July 20, 1932 Chicago Tribune Chicago, IL
Article from Chicago Tribune, July 20, 1932

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CASH IS READY FOR OWNERS OF CENTRAL BONDS Gilbert Keebler Lacks Bondholders' List. Bank failures and ships make for strange situations. For instance, owners bonds in the Central building. at the southwest corner of Madison street and Oak Park in Oak Park, have interest today but the Peoples National Bank and Trust which underwrote the and has been the agent for the mortgagor In paying the interest, is closed and in the hands of GILBERT naturally are wondering what to Gilbert E. Keebeler of E. F. Keebler & Co. and son of Mrs. Wilhelmine Keebler of 3300 Lake Shore drive, owner of the property which the bond yesterday notified THE TRIBUNE that cash is on hand in his office in the Otis building. 10 South La Salle street, for prompt payment of every interest coupon presented there. Lacks Bondholders' List. I'm taking this method of notify ing the bondholders because haven't any knowledge of the names or adof the of the Central building,' said Mr. Keebler. They merely have to present their at my office in the Otis building and they'll be paid." The Central owned by Mrs. Keebler. is two and stores and offices. The original bond issue was $135,000. since reduced to $109,000, bearing 6% interest. Terminal Theater. Title to the Terminal theater property at and has ben by the Sheridan corporation to William M. Richards, representing the protective No plan of reorganination has yet been upon The original bond issue for $550,000 was by H. O. Stone Co. It has since been paid down to $426,250. Interest defaulted Jan. 1, 1932. The property is improved with an shaped building ntaining a by the Ascher Brothers. It is now under to the Chi cago Fox interests. Mr. Richards. took title yesterdy, is assistant secretary to the bondholders' protective Name New Committee. The following committee has been named to service first mortgages orig inated by the Adams State bank: Henry F. Tykal, chairman; A. F. Jed licka, Norbert F. Kochka, and John been reserved for the bank who has not yet The law firm of Ring. Uhlir & Cuchna will act for the The principal loans made by the bank on and flat The date for the sale of the Roscoe at Ros coe street, has been set for Aug. 1, It was by the protective committee for the Straus Brothers In vestment company. There are 000 bonds in default on this property. new first mortgage is contemplated to care for the reorganization and other expenses. substantial amount bonds has been deposited with the Metropolitan the Aug. is announced the final date for Conveyance of the Naborhood gar age property 1509 Morse by Michael Long to the 1509 Morse Avenue Building completes the The cor poration took title for the bondholders. This was a $185,000 first mortgage bond issue underwritten by the recently closed Phillip State Bank and Trust company. It since has been reduced to $130,000. Austin L. Wyman was attorney for the bondholders. The garage accommodates 200 cars.

3. February 25, 1933 The Dispatch Moline, IL
Article from The Dispatch, February 25, 1933

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Article Text

Bank Receivers Unlawfully Hold Jobs, Says Chicago, Denis E. Sullivan ruled today that all receivers of closed banks in Illinois are holding office in violation the state constitution and their actions are void. The drastic ruling was made in suit brought by depositor of the closed Phillips State Bank and Trust company Chicago. (If this decision is upheld and applied to all bank receiverships in state will mean that the cevers of three banks in Rock land county will be affected. They Commercial bank of Moline, Smith; Fifth Avenue Savings Robert Cole: Manbank, East Moline, Oscar Ohlufacturers', weiler.) Chicago Case. The depositor charged that of receiver for the bank was void because section 11 of the banking act, providing for such pointments, contravenes the fundamental Illinois. The defendants, including Oscar Nelson then state auditor, filed which Superior Judge Sullivan overruled, upholding complainant. The banking act, Judge Sullivan held, improperly delegates to the auditor legislative power fixing the bond. Only the itself, the court said, can fix terms of bond. The opinion, in part, read: "Without deciding whether the entire as being an illegal attempt on part the legislature to vest judicial powers in an officer, quite apparent that the legislature vest in the auditor delegation of power void for the reason that is in violation the state constitution quite that the legislature intended that the called should give bond of the following provision: the determines that the bank not be reorganized that the should be liquidated through receivership, he shall appoint receiver, and require of him (Continued on Page Eight)

4. February 25, 1933 Globe-Gazette Mason City, IA
Article from Globe-Gazette, February 25, 1933

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Article Text

All Bank Receivers in Illinois Contrary to Constitution, Ruling CHICAGO Denis Sullivan ruled today that all receivers closed banks linois are holding office in violation of the state constitution and their actions are void The drastic ruling was made in brought by closed Phillips State Bank and Trust company of The charged that pointment for the bank void because the banking for such providing the Illinois The including Oscar Nelson as the state auditor, filed demurrer which Superior Judge overruled and upheld

5. February 26, 1933 The Paducah Sun Paducah, KY
Article from The Paducah Sun, February 26, 1933

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Article Text

Bank Receivers Are Held Appointed In Violation of Law Feb. Denis E. Sullivan ruled today that all receivers of closed- banks Illinois were holding office in violation the state Constitution and their actions were void The drastic ruling was made suit brought by depositer the closed Phillips State Bank and Trust Company Chicago. The depositor charged apof receiver for the pointment bank was void because section of the banking act, providing for such appointments, venes the fundamental law of Illinois. The defendants, including Oscar Nelson as then state auditor, filed demurrer which Superior Judge Sullivan overruled and upheld the complainant.

6. February 26, 1933 Jacksonville Journal Courier Jacksonville, IL
Article from Jacksonville Journal Courier, February 26, 1933

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APPOINTMENT OF RECEIVERS HELD ILLEGAL Over 500 Illinois Receiverships Affected of office and void by Judge Denis Sullivan superior court of Cook county The which plunge the scores banks the be appealed by the general Judge founded his opinion of the banking which delegated to state auditor the to name ceivers fix the and terms of their legislative the court ruled, has been adjudged the state supreme court and the entire section of Affects Entire State The affects in Cook county and 400 the entire in The case had been brought by the positor in the closed Phillips State Bank of Chicago The challenged the validity of the and asked of Charles H. Alvers receiver. The attorney representing the auditor entered demurrer this was Judge and the act held unconstit An of the Illinois Bankers informed of the said that the court upholds Sullivan court order or legislative act might necessary ratify the actions of the bank receivtaken The liquidation of defunct banks already in uncertain and sitional state because of new by Edward who has become state Barrett asked resignation of state bank receivers, purposing effect economies in by solidating liquidation under one reThis principle has support of the Illinois Bankers association. which is backing bill before the state legislature all bring ceiverships under direct control of single state On the other hand certain circuit court judges have challenged Barrett's authority require of receivers under circuit court

7. February 26, 1933 Pittsburgh Sun-Telegraph Pittsburgh, PA
Article from Pittsburgh Sun-Telegraph, February 26, 1933

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Judge Voids Acts Of Bank Receivers Judge Denis E. Sullivan ruled today that all receivers of closed banks in Illinois were holding office in violation of the State Constitution and their actions were void. The drastic ruling was made in suit brought by depositor of the closed Phillips State Bank and Trust Company of Chicago.

8. February 26, 1933 Brooklyn Eagle Brooklyn, NY
Article from Brooklyn Eagle, February 26, 1933

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uling Ousts All Bank Receivers Feb. 25 (4P)-Judge DenBullivan ruled today that all of closed banks in Illinois holding office in violation of constitution and ther acvoid. The Attorney Genindicated the decision would be drastic ruling was made in a brought by a depositor of the Phillips State Bank and Trust of Chicago. banking act, Judge Sullivan improperly delegated to the auditor discretionary legislain fixing the receiver's Only the Legislature itself, said, could constitutionally of bond.

9. February 26, 1933 Omaha Sunday Bee-News Omaha, NE
Article from Omaha Sunday Bee-News, February 26, 1933

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Rules Illinois Bank Receivers' Acts Void CHICAGO. Feb. 25. (P)-Judge Denis E. Sullivan ruled Saturday that all receivers of closed banks in Illinois are holding office in violation of the state constitution and their actions are void. The drastic ruling was made in a suit brought by a depositor of the closed Phillips State Bank and Trust Co. of Chicago. The depositor charged that pointment of receiver for the bank was void because section of the banking act. providing for such appointments, contravenes the fundamental law of Illinois. The defendants filed demurrer which Superior Judge Sullivan overruled and upheld the complainant. The banking act. Judge Sullivan held. improperly delegates to the state auditor discretionary legislative power in fixing the receiver's bond. Only the legislature Itself, the court said, can constitutionally fix terms of bond. INVESTMENT TRUSTS LAND BANK BONDS following NEW and asked invest-

10. February 27, 1933 The Dispatch Moline, IL
Article from The Dispatch, February 27, 1933

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Supreme Court Act in Bank Receiver Case Chicago, Feb. General Otto Kerner announced day he will appeal direct the court of Illinois the ruling Judge Denis SulliSaturday that all bank appointed by the state auditor holding office illegally. The ruling made plaint brought the closed Phillips State bank of Chicago. plan to test this ruling in the high Kerner said, Judge Sullivan held section the banking That section dealing with the of receivers was declared pointment unconstitutional because delegated to the state auditor certain that only the legislature judiciary can hold.

11. February 27, 1933 Freeport Journal-Standard Freeport, IL
Article from Freeport Journal-Standard, February 27, 1933

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WILL TAKE APPEAL FROM JUDGE SULLIVAN'S DRASTIC BANK RULING General Otto announced day he will appeal direct to the preme court Illinois the ruling Superior Judge Denis Sullivan Saturday that bank receivers pointed by the state auditor are holding office illegally. The ruling made in complaint brought depositor in closed Phillips State bank of Chicago. plan to test this ruling in the high Kerner said, "because Judge Sullivan held the section the banking unconstitutional. That section dealing with the pointment of receivers was declared unconstitutional because delegated to the state auditor certain that only the legislature can hold.

12. February 27, 1933 The Rock Island Argus Rock Island, IL
Article from The Rock Island Argus, February 27, 1933

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(Continued on Page Eight.) WILL APPEAL RULING ON BANK RECEIVERS Attorney General to Ask Supreme Court Review of Decision. Chicago, Feb. the Assoclated General Otto Kerner announced today he appeal direct to the supreme court the ruling perior Judge Denis Sullivan Saturday that all bank receivers pointed state auditor holding office illegally. The ruling made in complaint brought by the closed Phillips State Bank of Chiplan test this ruling high said, Judge Sullivan held section the That section dealing with the appointment of receivers was clared because delegated the state auditor that only legislajudiciary hold.

13. February 27, 1933 Anderson Daily Bulletin Anderson, IN
Article from Anderson Daily Bulletin, February 27, 1933

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Actions Of Illinois Bank Are Ruled Void In Case Chicago, Denis Sullivan ruled Saturday that all receivers closed banks in Illinois were holding office in viola tion of the state constitution and their actions The drastic ruling was made in suit brought depositor of closed Phillips State Bank and Trust Company of

14. February 28, 1933 Dixon Evening Telegraph Dixon, IL
Article from Dixon Evening Telegraph, February 28, 1933

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Bank Receivers Will Keep Posts Chicago, Feb. 27-(AP) -Attorney General Otto Kerner announced today he will appeal direct to the Supreme Court Illinois the ruling of Superior Judge Denis E. Sullivan Saturday that all bank receivers appointed by the State Auditor are holding office illegally The ruling was made in a complaint brought by depositor in the closed Phillips State Bank of Chicago We plan to test this ruling in the high court Kerner said, because Judge Sullivan held the section of the Banking Act unconstiThat section dealing with the appointment of receivers was declared unconstitutional because it delegated to the State Auditor certain powers that only the legislature or judiciary can hold

15. March 3, 1933 Bureau County Tribune Princeton, IL
Article from Bureau County Tribune, March 3, 1933

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DENIES AUDITOR RIGHT TO NAME BANK RECEIVER Court Holds That Auditor Has No Right To Appoint Receivers Under The Law. Superior Judge Denis E. Sullivan of Chicago Saturday declared unconstitutional section 11 of the Illinois Banking Act which gives the state auditor the power to appoint receivors to take charge of the assets of closed banks. His ruling involves more than 500 such appointments made in Illinois by Oscar Nelson. former auditor, and his successor State Auditor Barrett. It invalidates the acts of these receivers in dealing with cash and securities which are estimated to exceed 150 million dollars in aggregate Holds Power Is Judicial The eternal conflict between the three divisions of government legislative, executive and judicialformed the basis for the attack upthe banking act. Judge Sullivan's opinion asserts that Fection 11 constitutes an "unconstitutional delegation of judicial power to the state auditor and is invalid. "The far reaching decision grows out of a bill filed by the Auto Rebuilding company, a small depositor of the Phillip State Bank and Trust company which closed in June, 1932. State Auditor Nelson appointed as receiver. Charles H. Albers who be gan liquidating the assets. The receiver's appointment was affirmed by Superior Judge William J. Lindsay and attorneys for the receiver then appointed. Following this action the Auto Rebuilding company. through its attorneys, Aaron Soble and Harold O. Mulks. started suit, alleging that the banking act was unconstitutional and asking for the appointment of a new receiver by Judge Sullivan Tells How Ruling Applies In this new suit the bank. the auditor. and Albers, who were named codefendants filed general demurrers. asking dismissal on the grounds that the case was pending before Judge Lindsay Judge Sullivan's ppinion yesterday was on those demurJudge Sullivan explained to reporters that all banks in the state which have been closed by the state audifor will be affected by the ruling. He shid appointments of receivers would be invalidated in all cases where such appointments made by the auditor were merely approved by courts. "No court can approve an invalid appointment, such as made by the state auditor." said Judge Sullivan. "However, where judges actually set aside the appointments of the auditor and entered their own appointments independently, my ruling would not apply. It would not matter whether the receiver appointed by the judge was the one who formerly had been appointed by the Majority May Lose Jobs Under Judge Sullivan's ruling, the majority of all bank receivers will lose their jobs. Judge Sullivan stated in his opinion: "Before we get very far in construing Section 11 of the banking act we are met by that part which provides as follows: 'If the auditor determines that the bank cannot be reorganized and that the same should be liquidated through receivership. he should appoint a receiver and require of him such bond security as he deems proper. "Upon reading this section it must at once become apparent that the provision which states, He (the andftor) shall appoint a receiver and require of him such bond and security as he deems proper,' is one that preseribes no rules and imposes no standards by which the auditor is to determine the amount of the bond or the conditions which it should contain. its purposes, or any instruetions by which the auditor may be guided. and therefore the statute delegates legislative power to an exofficer. Decision to Be Appealed "All such conditions are left i) the uncontrolled discretion of the executive officer. Everything is left wide open. In short the terms of the bond may vary as the caprice of the executive officer may determine. Because the appointment by the state auditor of the receiver of any closed bank is unconstitutional, the judge ruled. the bonds which such receivers post to protect the creditors of the banks also are unconstitutional. Judge Sullivan stated that surety companies which furnished such bonds can refuse to supply protection for which they contracted. Assistant Attorney General Clausen stated that he was uncertain of the course which would be pursued in appealing the decision. He said that all receivers of closed banks would remain in charge until the case was passed upon by the Supreme court. He said that he would confer with Attorney General Otto Kerner to decide on the method of appeal.