Evening star., 1933-11-03
DIRECTORS FIGHT
LOSS LIABILITY
Park Savings Bank Stock.
holders and Depositors
Dispute Status.

Directors and stockholders Of the
Park Savings Bank today launched in
District Supreme Court vigorous de-
fense against the attack led by a De-
positors' Committee which is attempt
ing to hold them liable for losses of
the bank.
Through Attorneys Otis Kent and
Joseph T. Sherrier. the directors and
stockholders explained to Justice Jesse
c. Adkins that the Park Savings Bank
was de facto corporation when the
controller of the currency took posses
sion of it.
The State of Alabama, they contended,
was the only authority that could at
tack the charter of the bank or question
its existence as a corporation.
The Depositors' Committee has asked
the court to appoint court receiver
in place Of the Treasury receiver and
plans to hold the directors and stock
holders liable as co-partners for the
losses of the bank.
Charter Expired.
The Park Bank charter, the de-
positors claim, expired August 80, 1929.
and the directors became liquidating
trustees, but this charge is fatty de-
MED by the counsel for the directors
and stockholders.
A battle was raised today over the
principle of estopple. The directors
claim that the depositors dealt with the
bank as a bank and a going concern
after the date when it is alleged the
charter expired, and therefore the de-
positors are stopped from now claim
ing in court that the bank was not a
corporation but had expired.
The depositors, through E. Hilton
jackson, attorney, claim that they can
not be estopped because they received
no benefit in dealing with the bank,
but, to the contrary, were creditors of
the bank.
The extent to which the depositors
plan to proceed against the directors
and stockholders will probably be made
clearer shortly when their counsel
amends the bill now before the court.
Amendment Planned.
In a discussion of this point, Justice
Adkins said apparently the depositors
had intended to sue both the directors
and stockholders for the money which
has disappeared from the bank. but
this was not specifically charged in the
bill. Mr. jackson said the bill asked
the stockholders for an accounting and
charged both tsae directors and stock
holders with being co-partners jointly
and severally liable. He told the court,
however, The bill would be amended
more specifically.
There was lengthy discussion be-
tween the court and attorneys for all
five parties to the suit, concerning the
disputed question of receivership for
the bank The depositors have asked
for a court receiver in place of the
Treasury receiver, the controller con-
tends that his receiver can liquidate all
the assets now in the bank, but that
the question Of who shall attempt to
administer whatever liability may rest
in the Alabama law is for court deter
nination.
Justice Adkins raised the question as
to whether appointment of the present
Treasury receiver as a court receiver
also to administer both responsibilities
would be effected, but no decision was
made on this point, and the argument
of the defense then continued
The depositors, in addition to Mr..
jackson, are represented by William E.
Richardson, the Controller by q, B.
Springston, the receiver John F. Moran,
by j. Bruce Kremer; and the directors
and stockholders by Mr.. Kent, Mr..
Sherrier and Ralph B. Fleharty.
Issues in the case had been clearly
drawn by the time court adjourned yes
terday afternoon, with five parties par
The depositors attempted to oust the
Treasury receiver, John F. Moran, and
to have a court receiver appointed in
his place, contending' that the bank
charter had expired in August, 1929,
that the directors then became HQuidat-
ing trustees of the assets, and that both
the directors and stockholders arc
"jointly and severally liable" for the
losses. Directors had failed to iquidate
the bank under Alabama law. the de-
positors charged, and since the title to
the assets went out of the bank into
the hands of these director-trustees, the
Treasury Department had no jurisdic-
ton to liquidate the bank with its own
receiver.
Deny Charter Expired.
The defendant depositors and stock
holders denied the charter had expired
denied that the directors became
liquidating trustees, and contended that
the bank had been recognized after
1929 as a going concern by the State of
Alabama, which accepted taxes and is
sued permits. Mr. Kent, directors
counsel, contended the Treasury De-
partment had recognized it as bank
by making periodical examinations by
national bank examiners. If these ma
tional bank examiners in more than
% years had been unable to disclose
any acts of ''turpitude or dereliction. u
he contended, then the Alabama au-
thorities were exonerated, and so were
the directors and stockholders. The
bank had increased its capital stock in
1928, he said. by fulfilling all require
ments of the State of Alabama, and the
only formality necessary in those docu-
ments to have extended the charter
formally would have been to include
the simple request that the directors
wanted the charter extended.
If the Alabama statutes control, Mr.
Kent claimed the directors had met the