Bundy v. Jackson

Decision Date10 August 1885
PartiesBUNDY, as Receiver, etc., v. JACKSON.
CourtU.S. District Court — Eastern District of Arkansas

U. M. &amp G. B. Rose, for plaintiff.

John McClure, for defendant.

CALDWELL J.

The payee and indorser of a promissory note is liable as maker where he knows the maker is a fictitious person; and if he were to be regarded as an indorser, he would be liable on his indorsement without demand or notice. 1 Pars. Bills & Notes 559, 560. Section 5201, Rev. St., reads as follows:

'No association shall make any loan or discount on the security of the shares of its own capital stock, nor be the purchaser or holder of any such shares, unless such security or purchase shall be necessary to prevent loss upon a debt previously contracted in good faith, and stock so purchased or acquired shall, within six months from the time of its purchase, be sold or disposed of at public or private sale; or, in default thereof, a receiver may be appointed to close up the business of the association, according to section fifty-two hundred and thirty-four.'

The bank having in some way become the owner of this stock, it was required within six months from the date of its purchase to sell it, on pain of having a receiver appointed to close up the business of the bank. It is obvious the president of the bank had this clause of the act in view when this transaction took place, and that the execution of the note and the transfer of the stock from the bank to Bruon and Jackson was a scheme to escape the penalty for a longer ownership of the stock by the bank. The sale which the law requires the bank shall make of its own stock is a real sale and not a fictitious one. The president and cashier, it is true, could not make a sale of the stock to themselves that would bind the bank; but the directors might have sold them the stock; and when the bank, or its representative, elects to ratify the sale they made to themselves, Bruon and Jackson will not be heard to set up their own illegal or unauthorized act to avoid their contract. Nor will they be permitted to allege the sale and purchase was merely colorable, or to avoid a forfeiture of the bank's charter, or for any other deceptive or illegal purpose. Bigelow, Estop. 513. 'The receiver is the statutory assignee of the association,' (Kennedy v. Gibson, 8 Wall. 498, 506,) and, as such, possesses all the powers requisite to 'collect all debts, dues, and claims belonging to...

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2 cases
  • Luther Lumber Company v. Sheldahl Savings Bank
    • United States
    • United States State Supreme Court of Wyoming
    • March 23, 1914
    ...both parties have knowledge the rule of estoppel does not apply. (Lucas v. Trans. Co., 70 Ia. 541; Durkee v. People, 155 Ill. 354; Bundy v. Jackson, 24 F. 628; Bank Bank, 16 N.Y. 125; Converse v. Emerson Co., 242 Ill. 619; Bank v. Bank & Tr. Co., 116 S.W. 792; Kenyon R. Co. v. Bank, 31 L. R......
  • Adams v. Kehlor Milling Co.
    • United States
    • U.S. District Court — Eastern District of Missouri
    • June 15, 1888
    ...... when the purchase of the stock by the bank is not necessary. to prevent loss upon a debt previously contracted. Bundy. v. Jackson, 24 F. 628. . . Concerning. preferences by insolvent corporations, see Pyles v. Furniture Co., (W. Va.) 2 S.E.Rep. 909, ......

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