Albuquerque morning journal. [volume] (Albuquerque, N.M.) 1903-1926, 1921-12-25
Action Based on IA Trans
actions involving a Series
of Notes, Many of Them
Made to Pay for Stock.

Suit for $54,087.14 was started
against the First National Bank of
Albuquerque yesterday by Robert
Il. Putney and Jesse Hulett, re-
ceivers for the Holbrook State
bank which failed o matter OF a
year ago. The suit was filed by
Capt. w. G. Reid. senior member
of the firm of Reid, Hervey and
Iden, attorneys.
The action is based upon a Sc
ries Of fourteen transactions, in
yolving q series OF notes reported
to have been accepted without re-
course by the First National bank
OF Albuquerque and then returned
to the Holbrook bank at time
when 1t was insolventy Many of
the notes were made out for the
purchase of stock in the bank and
were unsecured, yet were sold to
the First National bank here in
payment of note of L. M. Ray
nolds, n cousin Of J. M. Reynolds,
and were later returned. They now
appear among the alleged assets of
the bank but are asserted to be
worthless.
The petition claims that the
First National bank here sought
the purchase Of the Holbrook
State bank on or about May 20,
1916, and that the purchase was
made by ]. NJ. Reynolds, president
of the First National bank here.
Guy L. Rogers, vice president of
the bank, and l.. M. Reynolds, a
cousin of j. M. Reynolds and a
bookkeeper in the First National.
It relates the transfers Of stock
which have been made.
Section 10 of the first cause OF
action, which is not greatly differ
ent except as to name from many
of the other causes Is as follows:
THAT on to-wit the 26th day OF
February, 1917. said l.. NJ. Ray
nolds, acting by and with
the knowledge and con-
sent of, and upon the advice of
defendant, in order to make a pay
ment to defendant upon his said
$4,000 note to the defendant, os-
tensibly sold 10 shares of said cap
ital stock of said Holbrook State
bank transferred from certificate
4 as aforesaid and issued as GER
tificate 8 as aforesaid, which had
Heretofore been held by said L..
M. Reynolds as aforesaid, to one
w. H. Chamberlain, and caused to
be taken from him the unsecured
note of said Chamberlain for the
entire amount of the alleged pur-
chase price of said stock, to-wit,
Yxrl1i n cofd nntn Caid T..
M. Reynolds and said defendant
we'll knew was not to be paid and
was uncollectable; but said note
was wrongfully taken in the name
of said Holbrook State bank as
payee, with the knowledge and
consent Of defendant herein, not
withstanding said Holbrook State
bank had no interest therein and
had no interest in the alleged sale
from said l.. M. Reynolds to said
Chamberlain; but plaintiffs charge
that said note was SO taken In the
name of said Holbrook state bank
as payee in order to secure said
banks endorsement thereon; that
said L. M. Reynolds and defend
ant, wrongfully, on the day fol-
lowing the ostensible sale, of said
stock to said Chamberlain as
aforesaid, caused said Holbrook
bank to advance on said Chamber
lain note the full face value
thereon to defendant SO as to pay
to defendant the said sum of
$1,52S.5O to be credited. and
which was thereafter credited on
said note of L. M. Reynolds to
defendant that 1t was agreed and
understood by L. M. Reynolds and
said w. II. Chamblain that said
Holbrook State bank was never