Atlanta tri-weekly journal. [volume] (Atlanta, Ga.) 1920-19??, 1923-06-28
.LEV|ES ON DEFUNCT
BANK STOCKHOLDERS
VALID, COURT RULES

The constitutionality Of the Geor-
gia state banking law in regard to
the levying and collection of assess
ments against stockholders of de-
funct banks was upheld in decision
handed down Monday by federal
tribunal composed of Judges N.
P. Bryan and Alex c. King, of
the United States circuit court OF
appeals, and Judge Samuel H. Sib-
ley, of the United States court for
the northern district of Georgia.
The decision was given in the suit
brought by the stockholders of the
defunct Lawrenceville bank, who
sought an interlocutory injunction
against II. r. Bennett, state bank
superintendent, to prevent him from
levying and collecting an assessment
of 100 per cent against the stock
holders. The Lawrenceville bank
failed in January of this year.
The compliments, in their petit
ton. attacked the constitutionality
of article of section 90 of the state
banking act, which specifically in
structs the state barking superin-
tendent in the collection of assess
ments against defunct banks.
Views of Compliments
The complainants set out that the
article denied them a due process
Of law, and that it's remedy of af-
f.davit of~ilIegality was in effect no
remedy at all. They also contend
ed that as depositors OF the bank,
they had right to offset their de
posts against the assessments. They
further insisted that superintendent
Bennett had levied an assessment
of 20 per cent previous to the 100
per cent levy.
The petitioners also commended that
the section providing for the issuing
OF executions on assessments by the
state superintendent was returnable
to no court, nor was any, court trial
provided for by the section.
Superintendent Bennett, answer
ing the contention that he previous
ly had assessed the stockholders
20 per cent, said it was a voluntary
assessment, and that the bank had
continued in operation one year after
the assessment was paid.
Courts Decision
The tribunal, in it's decision, held
that the demand of the stockholders
to offset their deposits against their
assessments, does not constitute
grounds for an attack on the constl-
tutionality of tie section of the stats
banking act, as there was nothing
in the section to prevent the stock
holders from certifying that fact
in affidaVitS
The tribunal also held that the 20
per cent assessment contention was
covered by perintendent Ben
nett's dneial.
The substantial question III issue,
the tribunals decision said, was
whether due process of law was
denied the stockholders under. sec
ton 20, as guaranteed them by the
fourteenth amendment to the constl-
tuition of the United States. On this,
the tribunal held:
Because of the conclusive effects
given by such section to the esti-
mate of re- superintendent of banks
and amour of his assessment, this
tribunal holds that action by the
state superintendent does not con.
den.n the stockholders to finally
lose the amount of assessments, but
only so! much as may not be relm-
bursed to ~him after actual collec-
ton of all assets and payment of all
debts shall have demonstrated what
such ultimate and final estimate is. y
Fraud Charges Passed Up
The tribunal also held that claims
of fraud in assessments could be
presented in courts of equity for ac-
ton.
1t further held that the assess
ments of the superintendent were
conclusive assessments and therefore
bona fide. The tribunal held that
in this respect the state banking
act was similar to the National
banking act, and that it was en-
tirely constitutional.
The Lawrenceville bank failed on
January /. 1928. and on February
/. 1923, Superintendent Bennett
levied 100 per cent assessment
against the stockholders to pay the
liabilities of the bank
The Stockholders later brought
suit attacking the constitutionality
and the federal tribunal heard the
case recently, rendering its decision
Monday. ~
Coughing Spell Elects