Riddle v. First Nat. Bank of Butler, Pa.

• Decision Date: 21 April 1886
• Citation: 27 F. 503
• Parties: RIDDLE v. FIRST NAT. BANK OF BUTLER, PA., with notice to Campbell, Receiver of said Bank.
• Court: U.S. District Court — Western District of Pennsylvania

27 F. 503

RIDDLE v. FIRST NAT. BANK OF BUTLER, PA., with notice to Campbell, Receiver of said Bank.

United States Circuit Court, W.D. Pennsylvania.

April 21, 1886

(1) The First National Bank of Butler, Pennsylvania, (the defendant,) issued, on the several dates thereof, and to the respective payees therein named, for deposits of money by them made certificates of deposit, of which the following are copies:

A.

$64.60. FIRST NATIONAL BANK OF BUTLER, PA., August 12, 1878.

'Mrs Annie Riddle has deposited in this bank sixty-four 60-100 dollars, payable to her order on return of this certificate properly indorsed, 12 months after date, with interest at five per centum per annum. If not presented at maturity, it will be considered as a renewal for same term, at same rate.

'ALEX. MITCHELL, Cashier.'

B. 'THE FIRST NATIONAL BANK OF BUTLER, PA., January 8, 1879.

'W H. H. Riddle, Esq., has deposited in this bank five hundred dollars, payable to the order of himself on return of this certificate properly indorsed.

'$500 ALEX. MITCHELL, Cashier.' C.

'$1,258.36. FIRST NATIONAL BANK BUTLER, PA., February 19, 1878.

'Samuel L. Riddle, Esq., has deposited in this bank twelve hundred and fifty-eight and 36-100 dollars, payable to his order, on return of this certificate properly indorsed, six months after date, with interest at five per cent. per annum. If not presented at maturity, it will be considered as a renewal for same term, at same rate. ALEX. MITCHELL, Cashier.'

(Indorsed: 'NOVEMBER 30, 1878.

'R'd of Alex. Mitchell, cashier, forty-eight 40-100 dollars, int. in full on the within to this date. SAM'L L. RIDDLE,

'Per W. H. H. RIDDLE.)'

D.

'$318.23. FIRST NATIONAL BANK OF BUTLER, PA., March 21, 1879.

'Samuel L. Riddle, Esq., has deposited in this bank three hundred and eighteen 23-100 dollars, payable to this order, on return of this certificate properly indorsed, 12 months after date, with interest at five per cent. per annum. If not presented at maturity, it will be considered as a renewal for same term, at same rate. ALEX. MITCHELL, Cashier.'

(2) Mrs. Annie Riddle and W. H. H. Riddle duly indorsed their above certificates (designated as A and B) to the said Samuel L. Riddle, the plaintiff.

(3) For infractions of the laws governing national banking associations a receiver of said bank was appointed by the comptroller of the currency in the month of July, 1879, and the bank has since remained in the hands of such receiver, in the course of liquidation.

(4) To No. 9, May term, 1880, of this court, the receiver brought a suit in equity against the said Samuel L. Riddle to recover back certain payments made by the bank to him on account of indebtedness (other than that involved in this suit) from the bank to him; it being alleged that such payments were made after an act of insolvency on the part of the bank, and in contemplation thereof, and with a view of giving him an unlawful preference over other creditors, contrary to section 5242, Re. St.

(5) To No. 10, November term, 1881, of this court, the receiver brought a suit in equity against W. H. H. Riddle, and others, directors of said bank, to charge them for alleged violations of the national banking laws, and particularly with infractions of sections 5199, 5200, 5204, Rev. St.

(6) On January 31, 1885, the following proposition of compromise, signed by the parties therein named, was submitted by them to the receiver of the bank, viz:

'BUTLER, PENNA., January 31, 1885.

'Genl. John N. Purviance, Receiver of the First National Bank of Butler, Penna.-- SIR: It is hereby proposed on behalf of Charles Duffy, Charles McCandless, W. H. H. Riddle, Louis Stein, Thomas Stehley, Sr., Samuel L. Riddle, Thomas Robinson, and John M. Greer to settle and compromise in full all claims of the First National Bank of Butler against each and all of the above-named parties upon the following basis, viz.: The said Duffy et al., within five days from the date of receipt by the receiver of said bank of notification from the comptroller of the currency of approval of this proposition, to pay in cash to the receiver of said bank the sum of twelve thousand ($12,000) dollars; and the said receiver shall thereupon discontinue and mark settled the two equity suits now pending in the United States circuit court for the Western district of Penna., one against the bank directors and the other against Samuel L. Riddle, and the suit against Charles Duffy in the U.S. court, the receiver paying out of the fund of twelve thousand dollars aforesaid all costs of said suits taxable as costs on the records thereof; and shall further cancel and annul, as against Charles McCandless, all and every form of indebtedness held by the bank against said McCandless; the bank, however, retaining all securities by him transferred to the bank, and his deposit therein at the time of the failure; and shall, further, either cancel and annul all the claims, and the securities held therefor, of the bank against Thomas Robinson and John M. Greer, respectively, or shall assign and transfer the said claims and securities to such person as the said Robinson and Greer may request and direct.'

This proposition was approved by the receiver, and on March 6, 1885, he was authorized by the comptroller of the currency to accept the same; the settlement to be made under an order of the court, pursuant to section 5234, Rev. St. On March 10, 1885, by an order of this court, made at No. 20, May term, 1885, the proposed settlement was approved and confirmed, and it was accordingly carried into full effect.

(7) By reason of a suggestion made by the receiver, (Gen Purviance,) soon after his appointment, to the plaintiff or his agent, that pending the above-mentioned equity suits the plaintiff should withhold proof of his said certificates, they were not proved against the assets of the bank in the hands of the receiver. The liability of the bank thereon, however, was never questioned by the receiver; and when the above proposition of compromise was presented to and accepted by him it was agreed between him and the plaintiff that he, the receiver, (Gen. Purviance,) in receipting for the $12,000 would accept the certificates here in suit as the equivalent of $1,600, that sum being the estimated dividend to which they would be entitled; and accordingly, upon that basis, they were actually taken by the receiver, and transmitted by him to the comptroller of the currency. But the comptroller refused to receive them, and insisted that the whole $12,000 be paid in cash. The certificates were then redelivered by the receiver to the plaintiff's agent, who paid to the receiver the $1,600 in cash. The plaintiff subsequently offered to prove his certificates, but by order of...