6335. Citizens Bank (Union City, IN)

Bank Information

Episode Type
Suspension → Closure
Bank Type
state
Start Date
October 10, 1901
Location
Union City, Indiana (40.202, -84.809)

Metadata

Model
gpt-5-mini
Short Digest
867c72b2

Response Measures

None

Description

Articles describe the Citizens' Bank of Union City as 'defunct' and refer to a receiver, suits by the receiver, and a Supreme Court decision (Oct 1901) finding directors liable for gross negligence, embezzlement and worthless assets. No run or depositors' agitation is described. The bank was organized under State law (Article 2), so classified as a state bank. Receiver actions and litigation indicate permanent failure/closure.

Events (3)
1. October 10, 1901 Receivership
Newspaper Excerpt
judgment of $50,000 recovered by the receiver of the bank from the directors. The receiver of the defunct Citizens' Bank of Union City against its directors ... affirmed a judgment of $50,000 recovered by the receiver of the bank from the directors. (Indiana Supreme Court decision Oct. 10, 1901.)
Source
newspapers
2. September 16, 1902 Other
Newspaper Excerpt
Important Banking Suit Begun. ... cases brought by Jesse Canada, receiver of the late Citizens' Bank of Union City, against numerous stockholders of the bank. Should the receiver win these suits it will mean a large addition to the dividends which he will be able to pay.
Source
newspapers
3. * Suspension
Cause
Bank Specific Adverse Info
Cause Details
Failure due to gross mismanagement, acceptance of worthless paper, excessive real estate valuations, unpaid overdrafts, and officers' appropriation/embezzlement of funds; directors held liable for resulting insolvency.
Newspaper Excerpt
the defunct Citizens' Bank of Union City
Source
newspapers

Newspaper Articles (6)
1. October 11, 1901 The Indianapolis Journal Indianapolis, IN
Article from The Indianapolis Journal, October 11, 1901

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Article Text

REBUKE FROM THE COURT THE SUPREME TRIBUNAL PRODS CARELESS BANK DIRECTORS. Case of Citizens' Bank of Union City, Ind.-Matters in the Local Courts. A sharp rebuke to careless bank directors was administered yesterday by the Indiana Supreme Court through Justice Dowling in the case of the late Citizens' Bank of Union City against its directors. In addition to administering the "scoring" the higher court affirmed a judgment of $50,000 recovered by the receiver of the bank from the directors. The board of directors was charged with acts of neglect numbering 119, among which were: Allowing the bank to take several thousand dollars' worth of worthless paper at face value from a bank to whose business *it succeeded; taking a large amount of real estate at excessive valuation; allowing overdrafts that were never settled; permitting the president and cashier to squander the bank's funds and to appropriate $25,000 each to their own use. The officers of the bank have been tried for embezzlemnt, but were acquitted. Justice Dowling said the directors had the means of knowing and were bound to know the value of paper and securities held by the bank, and that they were also bound to know the habits and character of the men they allowed to manage the bank. Continuing the learned judge said: "Under the statutes of this State the directors of a bank are the agents of the corporation, having the general custody, control and management of its property and affairs, and, as such agents, they are liable to account for all of the property of the corporation which has been intrusted to their control and management. For mere errors of judgment they are not responsible, but for losses and waste of money and property, occurring through their gross inattention to the busines of the bank, or their willful violation of their duties they * are liable. "It should be plainly understood by gentlemen occupying the position of directors in a bank that they are not mere lay figures, but that they have actual and responsible duties to perform, and that by gross inattention to those duties, resulting in the waste or loss of the capital of the bank, they render themselves liable to the corporation. A primary duty is that they should understand the financial condition of the bank. They owe this duty to the shareholders, the depositors and other creditors, and to the public. "Ignorance of the important transactions of the corporation, and of the general state of its affairs, unless excusable for some special reason which it is incumbent on them to establish, constitutes no defense to an action for damages for losses OCcasioned by or traceable to their failure to perform their official duties."

2. October 12, 1901 The Indianapolis Journal Indianapolis, IN
Article from The Indianapolis Journal, October 12, 1901

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Article Text

# RESPONSIBILITY OF BANK DIRECTORS. The decision of the Supreme Court in the case of the receiver of the defunct Citizens' Bank of Union City against the former directors of the bank declares a principle of general interest. The bank was organized under the State law which makes the directors of a bank its agents with full control of its affairs and liable to account for all of its property intrusted to their management. The failure of the Union City bank was found to be due to bad management by its officers, which might have been prevented by the directors, and the receiver brought suit against the latter to recover the amount due to depositors. On the trial in the lower court more than a hundred specific charges of neglect of duty were made against the directors. They were charged with permitting the bank, or its officers, to accept several thousand dollars' worth of worthless paper at its face value from another bank to whose business it succeeded; with taking a large amount of real estate at an excessive valuation; with permitting overdrafts that were never paid; with permitting the president and cashier of the bank to waste its funds and to appropriate them illegally to their own use, etc. On this state of facts judgment was given against the directors in the lower court for $50,000, and on appeal the Supreme Court affirmed the judgment. Following is an extract from the opinion of the court: Under the statutes of this State the directors of a bank are the agents of the corporation, having the general custody, control and management of its property and affairs, and, as such agents, they are liable to account for all of the property of the corporation which has been intrusted to their control and management. For mere errors of judgment they are not responsible, but for losses and waste of money and property, occurring through their gross inattention to the business of the bank, or their willful violation of their duties they are liable. ... It should be plainly understood by gentlemen occupying the position of directors in a bank that they are not mere lay-figures, but that they have actual and responsible duties to perform, and that by gross inattention to those duties, resulting in the waste or loss of the capital of the bank, they render themselves liable to the corporation. A primary duty is that they should understand the financial condition of the bank. They owe this duty to the shareholders, the depositors and other creditors and to the public. Ignorance of the important transactions of the corporation, and of the general state of its affairs, unless excusable for some special reason which it is incumbent on them to establish, constitutes no defense to an action for damages for losses occasioned by or traceable to their failure to perform their official duties. The principle here declared is not new, but it cannot be too strongly emphasized. Under the national banking law it applies to all national banks, and the State law makes it applicable to State banks. The latter says that the stockholders in any State bank "shall be individually responsible to an amount over and above their stock, equal to the par value of their respective shares of stock, for all debts or liabilities of the association, and which may be collectible by suit." The law also says, "The general business of the association shall be under the control and management of the board of directors." This implies that the directors are expected to control and manage the affairs of the bank in the interest of its other stockholders, of its depositors and of the public, and that failing or neglecting to do so they shall be individually liable for the results. The pro-

3. October 17, 1901 Iron County Register Ironton, MO
Article from Iron County Register, October 17, 1901

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Article Text

# TOPICS OF THE DAY. NEWS FROM EVERYWHERE. PERSONAL AND GENERAL. Rufus H. Woodridge, one of the best-known railway contractors of the United States, died at St. Joseph, Mo., on the 11th, after a short illness, from heart disease. He was the builder of a considerable part of the Burlington railway lines west of the Missouri river. Sentence of death was, on the 11th, passed upon Commandant Lotter, the Cape rebel whose commando, composed almost wholly of rebels, was captured by Maj Scobel, south of Petersburg, early last month. Lord Kitchener has confirmed the sentence. A report from Heilbron, South Africa, says: "Thirteen of Lord Kitchener's scouts were captured in a Boer ambush." The statement of the treasury balances in the general fund, exclusive of the $150,000,000 gold reserve in the division of redemption, issued on the 11th, showed: Available cash balance, $167,550,037; gold, $101,464,208. Emperor William, in consequence of crop failure, has remitted more than half the rents payable by peasants on crown lands near Colmar, Prussia. Prof. Thomas Shaw, of Minnesota, was, on the 11th, elected to the chair of animal husbandry in the agricultural college at Brookings, S. D. Prof. Show enjoys a national reputation and is a leader of his profession in this country and Canada. On the 11th R. G. Dun & Co., of New York, reported: "Failures for the week numbered 231 in the United States, against 232 last year, and 34 in Canada, against 32 last year." Prof. Waldeyer left Berlin, on the 13th, to attend the Yale bi-centenary, as a representative of the University of Berlin and the Berlin Academy of Arts. The supreme court of Indiana, on the 10th, in the case of the receiver of the defunct Citizens' bank of Union City against its former directors, declared in emphatic terms that the defendants, on account of their negligence, were liable for damages to the amount asked for, $50,000. Capt. Lemly, judge advocate in the Schley court of inquiry, was compelled to admit, on the 10th, that there was a failure in the evidence to show that Commodore Schley had received the message from Capt. McCalla in regard to the signal code with the Cubans. Charles Watson Armour, younger brother of the late Kirkland B. Armour, and the nephew of the pioneers of the well-known family, is now at the head of the Armour interests. He is 44 years of age and but little known in western society. Mayor Carter Harrison of Chicago is quoted as saying: "If the senatorial nomination is ever handed to me on a silver platter, they'll be lucky to get the platter back." While cleaning furnace pipes at Hickory church, nine miles from Beardstown, Ill., David Carr and the sexton found two one pound sticks of dynamite secreted above the pipes and connected with 25 feet of fuse, which led to the outside of the church. It is said that William Waldorf Astor's gift of $50,000 to the Society for the Prevention of Cruelty to Children will be followed by like contributions to nine other charitable institutions of London, and that the $500,000 thus dispensed will win him a title at the time of the coronation. Ninety indictments were returned against Centralia (Ill.) saloonkeepers and alleged gamblers by the grand jury at Salem as the result of the crusade conducted by Mrs. May Welch. Fourteen of the twenty-two local saloon men are included with five gambling-house proprietors. Veterinarians of Bloomington and McLean county, Ill., have their hands full of late fighting pink eye and glanders. No such outbreak has occurred previously in years. A Paris dispatch says there is good authority for stating that the government will send warships to Turkey unless the porte promptly agrees to all the French demands. A report comes from Washington that President Roosevelt will appoint Col. Brodie governor of Arizona on the retirement of Gov. Murphy. Col. Brodie was second in command of the Rough Riders when Roosevelt was colonel. At Ithaca, N. Y., on the 11th, Charles Norris, car inspector for the Lehigh Valley railroad, was arrested, charged with the theft of bonds, jewelry and other property valued at $70,000, belonging to Mrs. Denman Thompson and Mrs. Franklin Thompson, of the Old Homestead company. Much of the property has been recovered. The servant girls of Chicago are to invade the weekly newspaper field. It is to be devoted to the interests of working women. The first issue is expected to appear about the middle of November. Aware that the military forces of the Bulgarian and Turkish governments are prepared to attack them at a favorable opportunity, Miss Ellen Stone's abductors must receive the ransom without delay or else they will kill their captive. Rolla C. Pierson, postmaster at Louisville, Ill., has disappeared, leaving a shortage of $400 in his accounts. Pierson adressed a letter to his bondsmen saying he was short and instructing them to take charge of the office.

4. October 17, 1901 The Butler Weekly Times Butler, MO
Article from The Butler Weekly Times, October 17, 1901

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Article Text

BANK DIRECTORS HELD LIABLE. Indiana Supreme Court Renders Decision in Receivership Case. Indianapolis, Ind., October 10.The supreme court, in a decision handed down to-day in the case of the receiver of the defunct Citizens' Bank of Union City against its former directors, declared in emphatic terms that the defendants, on account of their negligence, were liable for damages to the amount asked for $50,000. The decision is considered by attorneys as one of the broadest and most sweeping ever rendered by the supreme court of thestate. The ruling was made on the charge that the directors of the bank, through neglecting their duties, had allowed the institution to become bankrupt. The decision says, in part: "It should be plainly understood by gentlemen occupying the position of directors in a bank that they are not mere lay figures, but haveactual and responsible duties to perform. Ignorance of the book's financial transactions and its financial condition does not constitute a defense against action for recovery."

5. October 19, 1901 Macon Beacon Macon, MS
Article from Macon Beacon, October 19, 1901

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Article Text

PERSONAL AND GENERAL Rufus H. Woodridge, one of the best-known railway contractors of the United States, died at St. Joseph, Mo., on the 11th, after a short illness, from heart disease. He was the builder of a considerable part of the Burlington railway lines west of the Missouri river. Senterre of death was, on the 11th, I passed upon Commandant Lotter, the Cape rebel whose commando, coma almost wholly of a by Maj Scobel, n early last posed captured tersburg, month. south rebels, of Lord was Pe. has confirmed the from Heilbron, Kitchener A report South sentence. Kitchen- Africa, says: "Thirteen of Lord s er's scouts were captured in a Boer d ambush. e The statement of the treasury balle ances in the general fund, exclusive of the $150,000,000 gold reserve in the st division of redemption, issued on the 2 11th, showed: Available cash balance, $167,550,037 gold, $101,464,208. r Emperor William, in consequence of 1. crop failure, has remitted more than on is half the rents payable by peasants h crown lands near Colmar, Prussia. at Prof. Thomas Shaw. of Minnesota, chair was, on the 11th, elected to the DO d of animal husbandry in the agrieul. tural college at Brookings, S. D. Prof. Show enjoys a national reputation in . and is a leader of his profession r this country and Canada. to On the 11th R.G. Dun & Co., of New the it York, reported: "Failures for of week numbered 231 in the United in. States, against 232 last year, and 3 ill in Canada, against 32 last year. Prof. Waldeyer left Berlin, on the 13th. to attend the Yale bi-centen m nary. as a representative of the Uni ay versity of Berlin and the Berlin Acad ted emy of Arts. the The supreme court of Indiana, o ia. the 10th, in the case of the receive ne of the defunct Citizens' bank o Mr. Union City against its former di ed his tors, declared in emphatic terms thei tha the detendants, on account of rid negligence, were liable for damages old the amount asked for, $50,000. ds Capt. Learly, judge advocate in con th up Schley court of inquiry, was tha pay pelled to admit. on the 10th, in there was a failure in the eviden air to show that Commodore Schley ha M caf received the message from Capt. COC cia Calla in regard to the signal with the Cubans. Charles Watson Armour, young A the brother of the late Kirkland B. ring mour. and the nephew of the pionee new of the well-known family, is now and the head of the Armour interest litt gua He is 44 years of age and but in's known in western society. the Mayor Carter Harrison of Chicago senat omquoted as saying: "If the rial Is nomination is ever handed to r in of on a silver platter. they' 11 be lucky get the platter back.' While cleaning furnace pipes the Hickory church, nine miles and fro 1 Day Beardstown, III., David Carr sticks mon sexton found two one pound his dynamite secreted above the pi) fu Bee and connected with 25 feet of of t tah, which led to the outside had imchurch. It is said that William Wald Socie hyAstor's gift of $50,000 to the by for the Prevention of Cruelty for the Prevention of Cruelty like iberChildren will be followed by e the tributions to nine other charita that institutions of London, and win his poticle $500,000 thus dispensed will the title at the time of the coronation return ance, Ninety indictments were czar, Centralia (111.) saloonkeep gr minagainst alleged gamblers by the of and at Salem as the result rs of imcrusade jury conducted by twenty Mrs. fine Welch. Fourteen of the included y local saloon men are five gambling-house proprietors. disVeterinarians of Bloomington their ha tches MeLean county, III., have eye confull of late fighting pink has tween glanders. No such outbreak ritain curred previously in years. says: A Paris dispatch says there the gov is g it for authority for stating that Tur matwill send warships to agree that unless ment the porte promptly tes of all the French demands. be exA report comes from: Washing will app AmeriPresident Roosevels Arizona that Col. Brodie governor of Murphy. the retirement of Gov. of Sepwas second in command st of Brodie Rough Riders when Roosevelt ase of last colonel. Ithaca, N.Y., on the 11th, Ch Le es deAt car inspector for the cha J., $3. Norris, railroad, was arrested, n per Valley theft of bonds, jewelry $263. with the property valued at $70,000 Thom us, o., other to Mrs. Denmar 30 per onging Mrs. Frankiin Thompson, Much o twenOld ud Homestead company. recovered d. the property has girls been of Chicago City, The servant the weekly newspaper of Ar invade to be devoted to the first interes iss erably It is women. The the m pracy the expected working to appear about of November. tion of that the military fore go ionary, work Aware Bulgarian and Turkash attack the prepared to in rements favorable are opportunity. receiv Miss nent ,f at a abductors must else by the ning of ransom Stone's without delay or kill their captive. will C. Pierson. postmaster a 1 on the Rolla III., has disappeared, ACC to the isville, shortage of $400 letter in his to ais England, Indies. Pierson . saying adressed he & was short all January strueting men them to take chaige January office.

6. September 17, 1902 The Indianapolis Journal Indianapolis, IN
Article from The Indianapolis Journal, September 17, 1902

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Important Banking Suit Begun. Special to the Indianapolis Journal. WINCHESTER, Ind., Sept. 16.-Judge Barnard, of New Castle, to-day sat as special judge here to make up the issues in the cases brought by Jesse Canada, receiver of the late Citizens' Bank of Union City, against numerous stockholders of the bank. Should the receiver win these suits it will mean a large addition to the dividends which he will be able to pay.