Federal Deposit Ins. Corporation v. Alker, 8805.
| Decision Date | 07 November 1945 |
| Docket Number | No. 8805.,8805. |
| Citation | 151 F.2d 907 |
| Parties | FEDERAL DEPOSIT INS. CORPORATION v. ALKER et al. |
| Court | U.S. Court of Appeals — Third Circuit |
Stanley Folz, of Philadelphia, Pa. (A. B. Geary, of Chester, Pa., Maxwell Strawbridge, of Norristown, Pa., and Harry J. Alker, Jr., and David Bortin, both of Philadelphia, Pa., on the brief), for appellants.
Allen S. Olmsted, 2d, of Philadelphia, Pa. (Francis C. Brown and Irving H. Jurow, both of Washington, D. C., on the brief), for appellee.
Before BIGGS, MARTIN, and McLAUGHLIN, Circuit Judges.
The suit at bar was brought by Federal Deposit Insurance Corporation against the defendants pursuant to the provisions of § 12B(j) of the Act of June 16, 1933, 48 Stat. 168, 12 U.S.C.A. § 264(j). The plaintiff seeks to recover a deficiency judgment against the defendant, Alker for a balance due from him on a demand note, an adjudication that neither the defendant Mamie DuBan, executrix of the estate of Alfred A. DuBan, nor the estate has any interest in 4,400 shares of the common stock of National Dairy Products Corporation pledged by Alker with Integrity Trust Company as collateral for the loan represented by Alker's note or the dividends thereon declared since Nov. 20, 1942, and a decree requiring National Dairy to transfer the stock upon its books to FDIC and to pay FDIC all dividends accrued since a specified date. The defendants filed answers. The case was tried to the court and judgment was given for the plaintiff.1 The defendants, with the exception of National Dairy, have appealed.
Briefly, stated, the pertinent facts are as follows: In October, 1929, Alker had a large broker's loan secured by marketable collateral. The Integrity Trust Company took the loan over from the broker. Two demand notes totalling $592,150 were given by Alker to the Trust Company. Prior to September, 1931, the collateral held by the Trust Company as security for the loan included 3,400 shares of common stock of National Dairy owned by Alfred A. DuBan who had loaned them to Alker so that he might employ them as security. By September, 1931, the collateral had become worth less than the loan and the Trust Company desired additional collateral. Alker and Fischer, a director of the Trust Company, called at the Trust Company and conferred with certain of its officers.
The evidence of what took place at this conference is conflicting. We will assume that the officers of the Trust Company agreed that if DuBan would put up 1,000 more shares of National Dairy Stock as additional security for the loan and Alker continued to pay the interest thereon, assigned certain insurance policies to the Trust Company and certain fees due him from the Commonwealth of Pennsylvania, the Trust Company would not disturb the loan or the collateral until security values had risen to such a point that Alker could recover his "equity". We will assume further that there was a valid oral contract to this effect and that Alker and DuBan did everything required of them by this contract. But no record of a "side" contract or agreement relating to Alker's notes appears on the books of the Trust Company. There was no mention of such an agreement in letters passing between the Trust Company and Alker and DuBan though at least two letters refer to the assignment of fees by Alker. Nothing relating to any contract was endorsed on the notes. The minutes of the meetings of the executive committee and of the board of directors of the Trust Company are silent as to the contract which we have assumed was made. The bank examiners who examined the books of the Trust Company over a period of years found no notation of it. No officer of the Trust Company made any statement to any examiner that there was an agreement in respect to the Alker loan. Moreover, when the additional 1,000 shares of National Dairy stock were put up as collateral DuBan gave to the Trust Company a power in the usual form authorizing it to treat the shares as if it was the...
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