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DISTRICT NATIONAL PACT OF 1928 HELD AT COST OF PUBLIC Col. Harper Loses Suit to Make Fellow Directors Help Him Pay Debt. CONTRACT WAS MEANT TO PEG STOCK PRICE Thus, Court Finds, It Is Unen- to forceable Because Contrary People's Welfare. agreement among directors Bank in of An District National the closed for controlling the fluctuating stock was 1928 price of the bank's at the market for their own profit United designed of the public, the today. expense Court of Appeals held brought States was on a suit his by The Robert ruling N. Harper to compel a debt Col. directors to help him pay agreement fellow pursuant to the ollateral. incurred secured by his personal was and Holding that the agreement court said public policy, the his claim. Col. against Harper cannot enforce in an appeal by ruling was made decision The from a similar of Disby Col. Justice Harper F. Dickinson Letts trict Supreme Court Held at Public Expense. Pact purpose of the agreement said, The the directors, fictitious the court price" among "the fixing of a Washington was the stock on the misleading for Exchange. thereby the Stock "This arrangement." the public. stated. "was designed to profit of the court parties to it at the expense the public." contract having such and a purpose cannot "A against public policy concluded is enforced in equity," Martin. who be Justice George E. court. Chief for the majority of the D. spoke of the five justices, Stephens LawTwo Groner and Harold rence basing their disagreement showdissented. the contention that the only that the on before the court was of ing was for the protection of agreement the stockholders and depositors the bank. Suit Decided on Motion. Original Letts decided the original on a Justice in District Supreme Court George suit to dismiss brought by of the motion Gertman, attorney for three trial of C. defendants. There was no the case. Harper's suit asked that assist the Col. involved be required to for $17,directors the payment of a note Comhim in by the receiver of the collateral 600 held National Bank. As had demercial this note Col. Harper the Disfor 90 shares of stock of securiposited National Bank and other Commercial trict which. he said, the threatenties, Bank receiver was to ing National to sell and apply the proceeds payment of the note. that Harper stated in his suit bank, Col. 17 other directors of blocks the of he and by the sale of regard to perturbed stock with little or no agreebank entered into a verbal sale of ment price, for the purchase and capital Pursuant stock. to this agreement neces- each $250 to provide margins parties paid in stock purchases. The to share sary the agreement were to bear to in the profits and might be equally equally any losses which suffered, the court related. time to time it became nec- and From to raise additional funds was essary November 12. 1928, $17,600 Naon from the Commercial his borrowed tional Bank. Col. Harper pledging own securities as collateral. appellate court found that has no part The of the principal of the note been paid. of the bank involved been in Directors venture were said to have P. the P. Crenshaw, William P. Lipscomb, Augustus Charles W. Darr, Ralph Atwood Joshua Evans. jr.; Charles Barnard, Eugene C. Gott, W. John Christian Heitmuller. M. Fisher, O'Brien. Gockeler, Hilleary F. Maury, Robert Lee HeOffutt, jr.; Charles C. Rogers, Ullman, L. L. Thornton, Leon S. Chester ber Wells and Edward G. Yonkers.