Evening star., 1934-08-22
STOCKHOLDER SUIT
DISMISSAL SOUGHT
Controller, Receiver and
Former District Bank
Head File Motion.

Motions to dismiss a bill Of COM
plant of group of District National
Bank stockholders who had attempted
to prevent the collection of 100 per
cent assessment levied against them
were filed In the District Supreme
Court yesterday by Controller of the
Currency O'Connor, Norman r. Ham,
ilton. receiver of the bank, and Joshua
Evans, jr., its former president.
Evans, now a vice president of the
Hamilton National Bank, as well as
O'Cornor and Hamilton, stoutly de-
Tended the transaction by which the
District Bank sold its prime assets to
the Hamilton. xsF.
Court Decisions Quoted.
LIONS. INES of court decisions are
quoted by, both motions in support Of
the rights and authority OF the con-
troller, the conservator and the re-
ceiver to proceed as they have in
regard to the District Bank. ...
The controller and the receiver
filed q joint motion, represented by
George p. Barse, Angus w. Mclean
and Charles E. Wainwright, while Mr.
Evans filed q separate motion repre-
sented. by Roger j. Whiteford and
p. H. Marshall.
Ample authority exists In law and
in court precedent to justify the pro-
cedure taken, it is pointed out. The
controller declares he had authority
kA k,av oak -
authorize his conservator, Evans, to
make the sale, despite provision Of
section 206, cited by the stockholders
In their behalf, providing for with
drawal by depositors from their ac-
counts on approval by the controller.
This section, the controller ex-
planned, clearly contemplates dis
tribution Of the assets Of the bank
while 1t is In conservatorship, and
necessarily embraces o distribution
not only Of assets on hand at the
time Of the appointment Of a con-
servator, but proceeds of liquidation or
collection Of assets thereafter made.
The sale of assets in this case con-
stituted liquidation Of the same"
Out Of the sale OF these assets the
Hamilton Bank paid q dividend of
so per cent to depositors Of the District
bank.
Authority for Sale Seen.
Mr.. Evans, as conservator, had au-
thority to make the sale of assets, the
controller contended, "notwithstand-
ing any prospective connection with
the Hamilton National Bank"
Defending the action Of Evans, the
controller says:
THE bill does not aver that the
sale was wrongfully or fraudulently
made, and the averments of personal
interest of the conservator are in
sufficient in law to justify voiding
the sale or requiring an accounting
OF the assets Sold.
"The bill shows sale for full
value, fairly made, and approved by
the controller and by the court, who
found 1t to be for the best interests
of the creditors. The bill does not
show fraud or illegality or that the
conservator was to receive anything
of value out of the trust estate. All
legal requirements were complied with
and such q sale Is not subject to at
tack"
Evans, in his motion, declares the
bill of complaint states no cause of
action against him, but does show he
as conservator had authority to make
the sale, Notwithstanding the aver
ment that it was contemplated
he would become an officer of the
Hamilton. The bill shows on its face,
he declared, that the contract for sale
of assets was mot grossly unfair to
the District National Bank, its stock
holders and creditors, as aVerred in
said bill"
Mr.. Evans ofacially adopts the
points and authorities filed by the
controller and receiver In their mo-
ton to dismiss,
Sees No Answer Needed.
In reply to the charges by stock
holders that upon a full and COM
plete accounting there will be no oc-
casion or necessity for an assessment,
that there will be sufficient to pay all
creditors in full, and that there will
remain a substantial amount for dis
tribution among the stockholders"
Mr.. Evans declares these constitute
conclusions Of law and Of fact not
requiring answer; and furthermore,
constitute an attempt to attack COL
laterally the finding of the insolvency
OF the bank, and the necessity for an
assessment, the determination Of
which matters Is vested exclusively in
the controller, whose determination
In such matters Is not open to ques-
ton by the court under the facts
averred in said bill Of complaint"
The stockholders bill shows, ac-
cording to Evans, that the controller
through the. conservator had au-
thority to make the sale under the
bank conservation act, In the man