Evening star., 1933-11-02
READY TO PROCEED
WITH L|QU|DAT|NG
OF PARK SAVINGS
Controller Would Move Under
National Bank Act and
Alabama Law.
DEPOSITORS OPPOSED
TO VIEW GIVEN COURT
R. F. c. Motion Granted, Dismiss
ing Plea for Return of Banks
Assets to Receiver.

The controller Of the currency today
was represented as willing to proceed
with liquidation of the Park Savings
Bank, not only under the national bank
act. but also under the State law Of
Alabama by which much more could be
realized from directors of the bank.
This was disclosed in District Su-
preme Court when counsel for the con-
troller. G. B. Springston, told Justice
Jesse C. Adkins that the controller,
under the law, should perform the
duties of liquidation which it Is con-
tended by the Depositors' Committee
of the bank should be handled by a
court receiver instead.
The Depositors' Committee had asked
the court to oust the Treasury receiver
so that a court receiver could proceed
against directors of the bank as liquidat-
ing trustees. or as co-partners.
Example Of Depositor.
Explaining how the controller would
operate through his receiver, Spring.
ston told the court that a depositor
who had 500 in the bank at the time
the bank charter expired August 80
would receive under the liquidation OF
the controllers receiver rateable dis
tribution. After receiving this, how
ever, supposing for example that he
got $40 as his first dividend. he would
have the right to go against the director
trustees for the other $50
Depositors Of the bank under this
plan would be divided into two groups
those who had money in the bank
before the charter expired and those
who had put money in the bank since
The receiver should make a rigid liqui-
dation of the assets which had been
commingled. Springston said
On behalf of the receiver, j. Bruce
Kremer declared that the executive arm
Of the Government had acted and thai
under decisions by the Supreme Court
of the United States this action coulo
not be attacked by any depositor OF
creditor.
r. Fl. C. Obtains Dismissal.
Judge Adkins sustained a motion b,
William c. Fits of the Reconstructior
Finance Corporation to dismiss the ples
Of the DepSitOrS' Committee, which hat
asked that the assets now In the hand!
oE,-thk r. &c be returned to thf
receiver. MI Fits promised the ;oe-
list OF these securities. which are col.
lateral for a loan made by the r. F. c
to the bank. He contended the r. F. c
had a right to make the loan to wha'
appeared to be a going bank and u
manage the securities and notes held al
collateral
Judge Adkins gave the depositors
counsel five days in which to amend
their bill in this particular.
Under the State law Of Alabama, a.
interpreted by the Depositors' Com
mittee, the bank charter expired In l929
and the directors became liquidatinf
trustees, jointly and severally liable To-
the assets in their hands.
E. Hilton Jackson of counsel for tht
Depositors' Committee told the cour'
that with the expiration OF the bank:
charter, the corporation ceased to exls'
and under Alabama law the directors
became liquidating trustees, responsible
to the stockholders and creditors OF thu
institution.
charged, had failed to so hquidate the
bank and thereby became Jointly ant
severally liable" for the property which
came into their hands.
Charge Bank Was Dissolved.
The title to the assets Of the Parl
bank, the court was told, did not re-
main in the bank itself. but in thu
directors who became trustees.
The Park Savings actually was dis
| solved by legislative act Of Alabama
| to the same extent as though disso
luton had been decreed by the court
/ Jackson declared
Although this dissolution had taker
place, counsel explained, the directors
proceeded to do every variety of bank
ing business at the institution, and by
receiving new deposits after the expira.
ton of the charter, had interminglee
the assets which came into their trus
in August. 1929, with new assets. Wher
the bank was taken over by the Treas
ury and was found to be defunct, Mr.
] jackson said, Through the machina.
tions of the former cashier in the bank
there was an apparent shortage OF ST.
500, ,0O0."
In continuing to operate the institu
| ton after its charter expired, the di
| rectors became co-partners, it wa
charged, and their liability as trustee!
remained just the same.
The depositors themselves could mo-
be prevented from bringing suit in ar
attempt to collect, Jackson declared, II
view Of the fact they had received M
benefit. He quoted a court decision t.
support the contention that the plea o.
estoppal had never been used against
persons in the category of the Parl
Savings depositors, who were attempt
ing to collect, even though the corpora
ton itself was not in existence.
The attempt of the depositors to GUS
the Treasury Department from contro
and to collect from the directors of tn
bank has precipitated one Of the mos
complex bank cases ever involving al
insolvent institution. according to thos'
| Of long experience.
Several parties are involved. Asso
ciated with Mr.. Jackson in representing
the depositors Is William E. Richard
son. The controller of the currency Il
represented by G. B. Springston, tn
| receiver by ]. Bruce Kremer, the Re
construction Finance Corporation, b.
| william Fits, and the group of direc
tors and stockholders by Otis Kent, 10
seph T. Sherier and Ralph B. Fleharty
HALLOWEEN SLA
HURT BY TIE,