Click image to open full size in new tab
Article Text
COURT REVERSES BARTOW BANK CASE JUDGMENT
Holds With Old Bank in Liquidation Suit
The United States circuit court of appeals at New Orleans yesterday reversed a decision by Federal Judge Akerman in which he awarded a judgment for $61,330 against the Polk County National bank of Bartow, and in favor of the Polk County National bank in Bartow, which took over assets of the older bank. The decision was in a suit brought in 1931 by the receiver of the successor bank. The receiver sought to establish liability of the older bank for endorsement of certain notes, which would enable him to assess its stockholders. Took Over Assets
Early in 1929 the older bank was in a failing condition and the new bank was formed to take over its assets and assume its liabilities. The old bank gave its note for $1,576,520 pledged by all its assets. This note was to be liquidated from the essets and the stockholders were to be relieved of liability. Some of the notes sued on had been transferred to other institutions and in time were paid off by the new bank or its receiver in accordance with the agreement to pay debts of the old bank. Himes & Himes and C Edmund Worth, attorneys for the old bank, maintained this payment relieved the old bank. They maintained that the endorsement on other notes had been allowed to remain on them through oversight at the time they were delivered to the new bank. Judge Akerman held these pleas were not a valid defense and entered judgment. The receiver was represented by McKay, Withers & Ramsey.
Court's Opinion
The appellate which remanded the case for further hearing in reversing Judge Akermen's ruling, held in effect that the agreement between the two banks made the old bank a principal debtor and the new bank surety with respect to debts of the old bank, and that when the new bank paid off other banks, which held part of the notes, the old bank's liability was discharged. The court also held that the old bank could not be held liable on the notes on which its endorsement had been allowed to remain through oversight.
