194 U.S. 18 (1901), 188, Brown v. Schleier
|Docket Nº:||No. 188|
|Citation:||194 U.S. 18, 24 S.Ct. 558, 48 L.Ed. 857|
|Party Name:||Brown v. Schleier|
|Case Date:||April 04, 1904|
|Court:||United States Supreme Court|
Argued March 18, 1904
APPEAL FROM THE CIRCUIT COURT OF
APPEALS FOR THE EIGHTH CIRCUIT
A national bank erected a building on leased property, the lease securing the landlord by a lien on the building and the personal obligation of bank. While a large amount of rent and taxes were unpaid, the bank became insolvent, the property was not paying fixed charges; after notice to, and no objections by, the stockholders, and no creditors intervening, the bank conveyed the property with the building back to the landlord in consideration of his releasing the bank and the stockholders from all liabilities accrued and to accrue under the lease.
Held that the proceeding was not ultra vires, and that, as the judgment of the stockholders and officers had been prudently exercised in good faith, the landlord acquired title to the land and building, and was not liable to account for the value of the building in an action brought by a creditor who had knowledge of, and had not protested against, the conveyance when made.
It is exceedingly disputable whether it is an abuse of discretion justifying reversal by this Court for the circuit court to deny a motion to file an amended bill after judgment entered.
This suit was brought by the predecessor of appellant in the Circuit Court of the United States for the District of Colorado to set aside a lease of certain lots in the City of Denver, Colorado, and the subsequent surrender and cancellation of said lease, as ultra vires of the power of the National Bank of Denver, and for an accounting, and that the amount found due on the accounting be decreed a prior lien upon the lots and the building erected thereon by the bank. The case was presented upon bill and demurrers. The demurrers were sustained and the bill dismissed. 112 F. 577. The ruling was affirmed by the circuit court of appeals. 118 F. 981.
The People's National Bank of Denver was incorporated on the first of August, 1889, as a national bank under the National Banking Act. Its capital stock was $300,000, and its corporate existence to be twenty years. In September, 1889, the appellee Schleier [24 S.Ct. 559] was the owner of lots 1, 2, 3, and 4 in block 75
in the City of Denver, and on that day made a lease thereof to the bank for the period of ninety-nine years from the first day of November, 1890, with an option to extend the term for a further period of fifty years at an annual rental of $13,975, payable monthly. The bank covenanted to remove at its expense, buildings located on the lots within a designated period, and to erect thereon a building four stories in height at a cost of not less than $100,000, which should at once become part of the realty. The bank also covenanted to keep the building and premises in repair and pay all taxes thereon. And it was covenanted that, in case of default in the payment of rent, taxes, or performance of other conditions for the period of fifteen days, Schleier should have the right after thirty days' notice, to sell and dispose of the lease and all the right and title of the bank thereunder, or to maintain personal actions for the rent or taxes he might have to pay. The heirs, representatives, and assigns or successors of the parties were entitled to the benefits of the lease, and were to be bound by its covenants.
The bank erected a building on the lots at an expense of $305,735.30, completing the same January, 1891. The building contained necessary offices for the use of the bank, which were occupied by it until it...
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