Hutchinson Coal Co. v. Miller
| Decision Date | 02 September 1937 |
| Docket Number | No. 971.,971. |
| Citation | 20 F. Supp. 718 |
| Court | U.S. District Court — Northern District of West Virginia |
| Parties | HUTCHINSON COAL CO. et al. v. MILLER. |
Melvin G. Sperry and Clifford R. Snider, both of Clarksburg, W. Va., for plaintiffs.
Harry E. Watkins, of Clarksburg, W. Va., for defendant.
Definitions and Designations: For brevity and conciseness, the plaintiff Hutchinson Coal Company will hereafter frequently be referred to and designated "the coal company" or "said coal company"; the plaintiff Melville L. Hutchinson, who commonly signs his name by the use of his initials Hutchinson, will frequently be designated "Hutchinson" or "said Hutchinson"; the defendant, Robert C. Miller, receiver of the National Bank of Fairmont, a corporation, in liquidation, will be designated and referred to as "the receiver" or "said receiver"; and the National Bank of Fairmont as "the bank" or "said bank."
I. The plaintiff Hutchinson Coal Company is, and during all the period of time covered in this stipulation was, a corporation duly organized and existing under and by virtue of the laws of the state of West Virginia, having its principal office and principal place of business in the city of Fairmont, in the Northern District of said state; and the plaintiff Melville L. Hutchinson resides, and during most of his lifetime has resided, in the city of Fairmont, in the Northern District of the state of West Virginia.
The defendant, Robert C. Miller, receiver of The National Bank of Fairmont, which is a corporation chartered and organized under the laws of the United States of America, and now in liquidation, is a resident and inhabitant of the city of Fairmont, in the Northern District of West Virginia; and the said the National Bank of Fairmont, during its corporate existence and activities, was engaged in business, and its principal office and place of business was located in the city of Fairmont, in the Northern District of the state of West Virginia.
II. That, under and by the order of the President of the United States of America of March 6, A. D. 1933, declaring a bank holiday, the National Bank of Fairmont was closed, and at the expiration of the holiday declared by the President it was not permitted to reopen and resume business, and on March 16, A. D. 1933, the Comptroller of the Currency, with the concurrence of the Secretary of the Treasury of the United States, appointed James H. Thomas as conservator of said bank, on which date the conservator qualified as such and took possession and custody of all of the books, records, and assets of said bank of every nature and description whatsoever, including the claims, credits, funds, and assets involved in this suit, and continued to hold such possession and custody until the termination of the conservatorship, which was terminated by the appointment of a receiver, as in the following paragraph set forth.
III. That, on November 13, A. D. 1933, the Comptroller of the Currency, with the concurrence of the Secretary of the Treasury of the United States, appointed Robert C. Miller receiver of said bank, who qualified as such receiver on November 14, A. D. 1933, and took over from the conservator possession of all of the claims, credits, funds, and assets of said bank, and, since said date, has held, and still holds, possession and custody thereof, and has acted, and is now acting, as receiver of said bank.
IV. That, on March 6, A. D., 1933, the date of the closing of said bank, it was indebted to Melville L. Hutchinson, upon the balance of deposits made by him, and carried in what is commonly designated as a checking account, in the sum of $85,620.66.
The bank held notes as follows:
(a) A note of the Hutchinson Coal Company
dated January 23, 1933, payable
90 days after date, for the sum of ....... $25,000.00
(Note: This note was the last renewal of
an obligation for the sum of $28,950, dated
October 31, 1931, which original obligation
had been reduced to $25,000)
(b) A demand note made by Hutchinson
Coal Company to the said Hutchinson
and C. H. Jenkins (endorsed by them
and the endorsers by writing thereon
having waived presentment, demand
and notice) bearing date Dec. 11, 1931
for the sum of ........................... 20,000.00
(c) A joint and several note of Christ Episcopal
Church and said Hutchinson for
the sum of ............................... 16,920.00
(d) A joint and several note of Duncan Sinclair
and said Hutchinson for the sum
of ....................................... 4,000.00
__________
Total in notes ........................... $65,920.00
Melville L. Hutchinson requested the conservator, and, in turn, the receiver, to charge the above-described notes to his account as proper offsets to the amount thereof of the obligation of the said bank to him, which transaction, if consummated, would have shown the bank to be indebted to the said Hutchinson in the net sum or amount of $19,700.66.
Therefore, the plaintiff Melville L. Hutchinson made proof of the net obligation as claimed by him, of said bank to him, for the sum of $19,700.66, and filed the same with said conservator, and, subsequently, upon his appointment, with said receiver.
V. That, during the time he was in charge of said bank, the said conservator, with the approval of the Comptroller of the Currency of the United States, charged the notes described under items (c) and (d) above against the said Hutchinson, as proper offsets of the liability of said bank to the said Hutchinson, and delivered the same unto the said Hutchinson, so that this controversy concerns and involves only the two notes (a) and (b) listed in the preceding paragraph.
VI. The origin and history of the obligations represented by notes (a) and (b) follow: On October 31, 1931, the coal company, on its negotiable, promissory collateral note, payable 90 days after date for the sum of $28,950, borrowed the face amount of said note from said bank. To secure the payment of this obligation the said coal company delivered, hypothecated, and pledged to said bank six United States Treasury Bonds, each of the par value of $5,000, and bearing interest at the rate of 3 3/8 per centum per annum, and bearing the numbers or symbols 6361 — A, 6370 — L, 6372 — B, 6373 — C, 6421 — A, and 7467 — H, of the aggregate par value of $30,000, all of said bonds being the property of Melville L. Hutchinson, and loaned by him to the Hutchinson Coal Company, to the end that it might hypothecate and pledge said bonds and borrow from said bank the sum of $28,950. At the time this note was made and delivered to said bank, it was the primary obligation of the Hutchinson Coal Company. The note of $25,000, hereinbefore described, was a renewal for the unpaid balance of said note for $28,950.
On December 11, A. D. 1931, the coal company made and delivered its demand note, bearing said date, for the sum of $20,000, payable to the order of the said Hutchinson and C. H. Jenkins, which note they indorsed and delivered to the said bank, and on which note it loaned to the coal company the sum of $20,000. At the time said note was made and negotiated, the said Hutchinson and the said C. H. Jenkins were accommodation indorsers of said note, and loaned their credit to said coal company in order that it might procure from said bank the loan represented by said note.
VII. That the Hutchinson Coal Company, from the years 1927 to 1932, both inclusive, in common with other coal companies, engaged in mining coal in West Virginia, carried on its mining operations at a great loss, necessarily incurring in so doing a heavy indebtedness. It attempted to finance its operations by the sale of its first and refunding mortgage bonds, which were provided and in its treasury for the purpose, but such bonds were wholly unsalable at any price to the public. To the end that said coal company might carry on its mining enterprises and to prevent a forced liquidation and sacrifice of the assets of the company, the plaintiff Hutchinson made the sacrifice outlined in the preceding paragraph, and, in addition thereto, on March 29, A. D. 1932, purchased from the coal company its first and refunding mortgage bonds of the aggregate par value of $481,000, at 85 per centum of par, the transaction being finally closed as of April 1, A. D. 1932. The purchase price of said bonds, aggregating the sum of $408,850, was paid in the following manner: In the discharge and satisfaction of notes and obligations of the coal company held by the said M. L. Hutchinson for moneys advanced and loaned by him of the aggregate amount of $109,586.09, the payment by the said Hutchinson to said coal company in cash of the sum of $413.91, and the assumption and payment of outstanding obligations of the coal company in discharge of the liability of the coal company thereon, of the aggregate amount of $298,850, held by the following creditors of the said coal company, to wit:
Bankers Trust Company of New York .......... $100,000.00
National City Bank, New York ............... 30,000.00
Corn Exchange Bank, Philadelphia ........... 75,000.00
The Empire National Bank of Clarksburg ..... 20,000.00
The National Bank of Fairmont .............. 28,950.00
The National Bank of Fairmont .............. 20,000.00
The Lowndes Savings Bank & Trust Company ... 24,900.00
The above-described obligations were either renewed after April 1, A. D. 1932, in the name of the Hutchinson Coal Company, or were paid off by the plaintiff Melville L. Hutchinson. About March 29, A. D. 1932, James H. Thomas, president of the National Bank of Fairmont, and John W. Meredith, auditor of said bank, the president at his office at the banking room of said bank, and the auditor at the banking room of said bank, were informed either by Melville L. Hutchinson or C. H. Jenkins, now deceased, or by both of them, that Melville L....
To continue reading
Request your trial
-
Lowe v. Johnson, Case No. 2:17-cv-02345
...Crisp Corp., 122 S.E.2d 553 (W. Va. 1961); United Dispatch v. Albrecht Co., 62 S.E.2d 289 (1950)); see also Hutchison Coal Co. v. Miller, 20 F. Supp. 718 (N.D. W. Va. 1937); Casto v. Dupuy, 515 S.E.2d 364 (W. Va. 1999). Here, the plaintiff has not named Wexford or the WVDOC as parties, and ......
-
Federal Deposit Ins. Corporation v. Pendleton
...v. Armstrong, 146 U.S. 499, 13 S.Ct. 148, 36 L.Ed. 1059; Early v. City of Helena, Ark., et al., 8 Cir., 87 F.2d 831; Hutchinson Coal Co. v. Miller, D.C., 20 F.Supp. 718. Where the bank is the accommodatee it certainly could not be heard to admit its promise to the accommodator to hold him h......