Sprague v. TICONIC NAT. BANK OF WATERVILLE, ME.
| Decision Date | 29 May 1936 |
| Citation | 14 F. Supp. 900 |
| Parties | SPRAGUE et al. v. TICONIC NAT. BANK OF WATERVILLE, ME., et al. |
| Court | U.S. District Court — District of Maine |
Harvey D. Eaton, of Waterville, Me., for plaintiff.
F. Harold Dubord, of Waterville, Me., for defendants.
This is a bill in equity brought to establish a priority claim on certain bonds or the proceeds thereof in the hands of the defendant Picher, as receiver of the defendant Peoples-Ticonic National Bank.
I find the following facts:
In March, 1931, the plaintiff Lottie F. Sprague deposited with the Ticonic National Bank of Waterville about $5,000 in trust to be invested by the bank as trustee and used for the purpose of making certain periodical payments to the other plaintiff, Margaret Davis Sprague. The bank had been authorized to act in a fiduciary capacity under the provisions of the Federal Reserve Act (38 Stat. 251), and had, by proper votes, set up a trust department with adequate provisions for the protection of trust funds, including the provision that trust funds held by the bank awaiting investment or distribution, deposited in the commercial department of the bank to the credit of the trust department, should be secured by securities equal in value to the amount of such deposited funds and delivered to the trust department to be held segregated from the general assets of the bank.
The bank accepted the Sprague trust, the terms of which were evidenced by a written memorandum, and deposited the money in its commercial or checking department to the credit of its trust department, with other funds awaiting investment or distribution, and secured the total amount of such funds by setting aside in the trust department bonds equal to or exceeding in value the amount of such total deposit, as provided by the bylaws of the bank and by the Federal Reserve Act. Included among the bonds thus segregated was a certain lot of $20,000. Kingdom of Denmark 6s, 1942.
In August, 1931, the Ticonic Bank discontinued its activities as an active banking concern, sold substantially all of its assets to the Peoples National Bank, and went into voluntary liquidation. The Peoples Bank agreed to assume and pay the liabilities of the Ticonic Bank to its depositors, but it does not appear that the Peoples Bank succeeded the old bank as trustee or expressly undertook any obligation relative to the administration of its trusts. On the contrary, the old Ticonic Bank continued, through its officers, to exercise supervision over the trust accounts, including the Sprague account.
The total uninvested trust funds on deposit in the commercial department of the Ticonic Bank, when taken over by the Peoples Bank, amounted to about $10,000, and when the banks closed in 1933 to about $12,000. The sale to the Peoples Bank included the Ticonic banking house, furniture, and equipment, and the new bank, taking the name of Peoples-Ticonic, occupied the quarters of the old Ticonic.
In 1931, prior to the acceptance of the Sprague trust by the Ticonic Bank, Mr. Charles W. Vigue, who was president and remained president of the Peoples Bank, was chosen president of the Ticonic and assumed active control and management of its affairs. Several other gentlemen were and remained directors of both banks, both of which were practically controlled by one stock ownership.
The deposit in the Ticonic Bank to the credit of its trust department, after the sale to the Peoples Bank, was carried in the same way as before, even the same ledger sheets being used, it being impossible to distinguish, except by dates, the old account from the new.
The officers of the old Ticonic Bank, in handling this account of uninvested trust funds, continued to make deposits and draw checks as before. The checks, until the close of the banks in 1933, were even drawn on the Ticonic Bank by its trust officers and by Mr. Vigue, its president and trust officer, although the bank had gone out of business; but the checks were presented to and paid by the new bank in the old banking rooms. The Sprague account, which was never...
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Sprage v. Ticonic Nat Bank
...the discharge of the lien with interest from the date of the filing of the bill and payment to the plaintiffs' of 'their taxable costs,' 14 F.Supp. 900. On appeal, the Circuit Court of Appeals at first disallowed interest, 1 Cir., 87 F.2d 365, but on rehearing affirmed the decree of the Dis......
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Philadelphia Gear Corp. v. FDIC
...trust deposits) at the Ticonic National Bank of Waterville, Maine, which failed on August 3, 1931. She ultimately prevailed. 14 F.Supp. 900 (D.Me.1936), aff'd in part and modified in part, 87 F.2d 365 (1st Cir.1937) (per curiam), aff'd on rehearing, 90 F.2d 641 (1st Cir.1937), aff'd, 303 U.......
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Sprague v. Ticonic Nat. Bank, 3533
...favor of the plaintiff to satisfy principal and interest and ordinary taxable "costs as between party and party." Sprague v. Ticonic National Bank, D.C., 1936, 14 F.Supp. 900; Ticonic National Bank v. Sprague, 1937, 1 Cir., 87 F.2d 365; and upon rehearing, 1 Cir., 1937, 90 F.2d 641; Ticonic......
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Sprague v. Ticonic Nat. Bank
...the facts which were the basis of the litigation referred to. They were originally stated by this court in Sprague et al. v. Ticonic National Bank et al., D.C., 14 F.Supp. 900, then by the Circuit Court of Appeals in Ticonic National Bank v. Sprague et al., 1 Cir., 90 F.2d 641; afterward by......