Ditty v. Dominion Nat. Bank of Bristol, Va.
| Decision Date | 26 June 1896 |
| Docket Number | 417. |
| Parties | DITTY v. DOMINION NAT. BANK OF BRISTOL, VA. |
| Court | U.S. Court of Appeals — Sixth Circuit |
Harlan Cleveland, U.S. Atty., for appellant.
Herbert Jenney, for appellee.
Before TAFT and LURTON, Circuit Judges, and HAMMOND, J.
This was a suit of the Dominion National Bank of Bristol, Va., to require the appellant, Robert M. Ditty, the receiver of the Citizens' National Bank an insolvent banking association of the United States, to allow as valid a claim for $5,000 on a promissory note executed by C. M. Overman, president of the Citizens' National Bank, in favor of the president of the Dominion National Bank of Bristol, Va. The receiver of the bank denied that the note was made and delivered by the Citizens' Bank, or any one authorized to act in that behalf; averred that it was made without the knowledge of the directors, that it had never been ratified by them, and that the money borrowed on it did not go to the use or benefit of that bank, but was obtained by Overman for his individual use and benefit. The facts were agreed on. It appears the Overman, as president of the Citizens' Bank, before the loan in question, had drawn out from the United States National Bank of New York (the reserve agent of the Citizens' Bank) a large part of its reserve fund there deposited, and that some time thereafter, in order to replace the funds which he had embezzled, he did, as president of the Citizens' Bank, procure the loan in question from the Dominion Bank, and gave the note for $5,000 above described. It further appeared that this $5,000 was deposited to the credit of the Citizens' Bank in the United States National Bank of New York, and that that particular $5,000 was drawn out upon drafts of the Citizens' Bank, and applied to pay its lawful debts. It appeared that the directors of the Citizens' Bank had no knowledge or notice of the loan from the Dominion National Bank, or Overman's previous embezzlement of the funds of the Citizens' National Bank on deposit with the United States National Bank, until after the failure of the bank and the appointment of the receiver.
The chief reliance of appellant is upon the case of Bank v Armstrong, 152 U.S. 346, 14 Sup.Ct. 572. In that case the Western National Bank sought to compel the allowance of a claim against Armstrong, as receiver of the Fidelity National Bank, for a loan of $200,000 which it had made on a note...
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