Brown v. Schleier

• Decision Date: 30 December 1901
• Docket Number: 4,116.
• Citation: 112 F. 577
• Parties: BROWN v. SCHLEIER et al.
• Court: U.S. District Court — District of Colorado

112 F. 577

BROWN v. SCHLEIER et al.

No. 4,116.

United States Circuit Court, D. Colorado.

December 30, 1901

Cranston Pitkin & Moore, H. M. Orahood, J. H. Brown, and Watters &amp Kendall, for complainant.

R. D Thompson, Bartels & Blood, and John M. Waldron, for defendants.

This is a bill in equity brought by the receiver of the People's National Bank of Denver against George C. Schleier and the bank for the purpose of following certain moneys expended by the bank in the construction of the People's Bank Building, located on the corner of Sixteenth and Lawrence streets. The case is before the court upon demurrers filed by the defendants to the bill of complaint. The facts as disclosed by the bill may be briefly stated as follows: The defendant the People's National Bank of Denver, Colo was incorporated on the 1st day of August, 1899, under the national banking act, with the usual powers of such corporations. The capital stock of the bank was $300,000. The bank was to do business in the city of Denver, and the period of its corporate existence under its charter was 20 years. In the month of September, 1899, the defendant George C Schleier was the owner in fee simple and in possession of lots numbered 1, 2, 3, and 4, in block 75, in the East division of the city of Denver; said lots being at and near the corner of Lawrence and Sixteenth streets. On the 12th of September, 1899, the defendant bank entered into a lease with the defendant Schleier for the lots above described for the period of 99 years from the 1st day of November, 1890, with an option to extend the lease for a further period of 50 years, at an annual rental of $13,975, to be paid in 12 equal monthly installments. In addition to the payment of rentals, the bank agreed to remove at its own cost and expense the store rooms and buildings located on the ground, and within 18 months from the 1st day of February, 1890, at its own cost and expense, to erect thereon a good, substantial building, not less than four stories in height, and to cost not less than $100,000; said building to become at once a part of the realty. The bank further agreed to keep the building and improvements erected on the land leased in good order and repair, at its own cost and expense. On the 21st day of September, 1899, the lease was duly recorded in the office of the county clerk and recorder of Arapahoe county, Colo., in Book No. 547, at page 1. The bank entered into possession of the premises under the lease, and thereafter removed the buildings then upon the ground, and proceeded with the construction of the new building, described in the bill as the 'Bank Building,' at a cost of $305,725.39. The building contained not only necessary offices for the use of the bank in conducting its banking business, but also six store rooms and a number of office rooms, which the bank rented to parties not connected with it either as stockholders or otherwise. The bank building was completed in January, 1891, and from that time on, until it ceased to do business, the bank occupied it. The bank continued to conduct therein its business as a national banking association, renting a portion of its main or first floor to a corporation organized under the laws of the state of Colorado, and known as the People's Savings Bank, and also renting the other offices and store rooms in said building, collecting the rents therefor. On the 19th day of July, 1893, the bank being unable to pay its depositors in due course of business, it was, under and by virtue of the provisions of the national banking act, placed in the hands of the comptroller of the currency. One J. B. Lozear was appointed receiver thereof, and as such receiver took charge of the bank and its affairs from the 19th day of July until the 21st of August, 1893. On that date, the bank having agreed to make a voluntary assessment of 20 per cent. to restore the impairment of its share capital, the receiver was discharged, and the directors and officers of the bank took charge and conducted the business until the appointment of the receiver herein. The bill alleges that the affairs of the defendant bank were very much involved mixed, and commingled with those of the People's Savings Bank, and that by reason thereof the savings bank was unable to proceed with its business, and on the 29th of June, 1895, made a general assignment of all of its assets and estate to one Fermor J. Spencer, who has ever since been, and still is, in the possession, control, and management of the assets, business, and affairs of the savings bank, and that he, as such assignee, on the 20th day of November, 1899, procured a judgment against the defendant bank for the sum of $475,825.71, which remains unpaid. It is alleged that in January, 1897, the defendant bank commenced to take steps looking to a voluntary liquidation and a surrender of its charter; that thereafter, and on or about the 27th day of April, 1897, the stockholders of the defendant bank published a notice of the bank's intention to go into liquidation and for the presentation of claims,-- fixing the 27th day of June, 1897, as the last day on which claims could be presented. It is further alleged that on the 26th day of June, 1897, Spencer, as assignee of the savings bank, threatened to commence, and did, to the extent of serving the summons, commence, an action against the defendant national bank, and at the same time served notice of the claims and demands of the savings bank against the People's National Bank; that thereafter, on the 2d of July, Spencer and the People's National Bank entered into a contract whereby it was agreed that Spencer should refrain from taking any further steps in that suit until the 1st of January, 1898,-- the same to be without any prejudice to his rights,-- and, in consideration of the delay in filing the complaint in that suit, the defendant bank agreed that it would take no further action of any kind or nature to the prejudice of spencer as assignee, by the surrender of its charter or the disposal of its property. It is further alleged that on the 20th of September, 1897, the defendant People's National Bank issued a notice and called a special meeting of its stockholders for the purpose of considering the proposition to turn over the banking house of the bank to George C. Schleier, the owner of the land upon which the building was situated, and thereafter the defendant bank, in violation of the statutes of the United States in such case made and provided, and contrary to the principles of equity governing the distribution and disposition of assets in...