The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1913-02-28
CHARLOTTE BANK
HELD NOT LIABLE
Court of Appeals Relieves It
From Payment of $27,5O0
Claim.
CHARGED WITH LAND FRAUD
Litigation Sought to Recover on
Transaction Concluded
Forty Years Ago.

/
lotte, N. c., in an opinion by Judge
Dayton. OF the United Statos Circuit
Court OF Appeals Yesterday. Is re-
lieved from tho payment OF $4,000.
tho amount of a claim brought against
1t in the District Court at Salisbury,
n. c., by Lewis b. Fronebcrger, OF
Knoxville, Tenn.
In its decision yesterday tho Cir
cult Court of Appeals affirms the YER
diet of tho trial court, denying the
validity of tho claim. a decree to
this effect was entered at Salisbury
on April 2. 1912. From this decree
FroneberGcr appealed to the Circuit
Court, assigning numerous errors.
The litigation thus closed was re-
markable, in that It sought to recover
S27,500. which, Fronebcrger claimed,
the First National Bank of Charlotte
fraudulently acquired at the expense
OF the bankrupt estate of ID. c. and
+. Fronebergcr. who traded as part
ners In Tennessee prior to October
IA, 1865" The action was brought to
recover on transaction that took
place more than forty years ago.
Claims Bnnk Committcd Fraud.
From the record IL appears that tho
FroneberGers owned a valuable parcel
OF land near Shelby, N C. In 1869
| the bank secured judgment for a
claim of $4,000, which 1t held against
| the firm and forced the sale of the
I '1''SibS ~ opeItS At DODiC auction.
The property was bid in and bought
by the bank for $4,000.
IN 1877, a. j. Crews. a large cred
ltor OF the Froneberscrs, satisfied that
the property brought only a fraction
oil what 1t was worth. issued another
execution and had the property re-
sold for the benefit of the creditors.
AT this sale he was the highest bid
der The claims of the rival owners
were brought to the State courts for
adjustment, with the result that n
court Of competent jurisdiction in
North Carolina returned certain find
| inss against the Charlotte bank
among others, that the propcrty. at
the ume is was bought in by the bank
1or $4,000, was actually worth $40
600, and that tho bank frauduIentIy
suppressed bidding at the first sale
IN order TO secure the property at its
own price.
Tho case rested moro than thirty
years, until December ., 1911, when
Lewis Is. Fronebcrger appeared in the
District Court at Salisbury, holding
unSatished claims against the Prone
oergers In the amount OF $4,000. He
MED petition charging that the First
National Bank of Charlotte by reason
OF Its alleged fraudulent conduct I'm
obtaining the property, became. and
Is trustee for the creditors, and
Is, therefore. liable to them for
between
Sl2,5cO which 1T paid for tho propcrty
and the $4,000, which the courts have
declared 1t was worth at the time of
the sale.
Claim Is Barred
Inc District Court at Salisbury in
decree by Judge Boyd on April >.
1al2. sustained a demurrer nv uhe
Charlotte bank denying the validity
OF the claim-chiefy on the ground
that FroneberSer represented credi-
tors whose claims have long since
been outlawed by the statute or umi-
tations. The same view was taken
by the Circuit Court of Appeals in
yesterdays decision.
"a clear distinction Is to be drawn"
! according to Judge Dayton. "betwecn
cases whore one secures a sunnrce
sion OF bidding for one Interested in
tho property, and ono bidding for
himself. who induces others not 70
bid against him. Judicial sales where
the purchaser has siincd bidding are
not void. but only voidable."
Even If the manner In which he
bank secured the property was fraudu-
! lent 1t Is set forth, the claimant ie
barred by the statute OF limitations
which makes mandatory tho beginning
OF action within The three years from
the time tho fraud is discovered or
by reasonable diligence could he dis
N'Ncieu ne crews trial In 1877 is
held to be proof OF the fact that thu
fraud had been discovered at that
time
If rs the appellant claims, construc.
tive trust could be established. the
banks position. according to Judge
Dayton, is still unassailabIe
ut is to be remembered" saws +ha
Judge on this Soint that contrary to
cases of direct trust, the general
statute of limitations are ordinarily
mol IN he anDlIc, bla -