Evening star., 1936-11-05
ASSESSMENT FIGHT.
BY stockholders
OF BANK RENEWED
Four Challenge Validity of
} Continental Trust Re-
ceivers' Action.
CHARGE LIABILITIES
FOLLOWED MERGER
Argue Attempt to Collect From
Share Owners for Losses
Is Illegal.

A new challenge of the validity OF
the 100000 assessment by the con-
troller of the currency against stock
holders of the closed Continental
Trust Co. was filed in District Court
today. More than 100000 of the as
sessment already has been collected.
Four stockholders, Robert l. Lyon
and Misses Addie T. Lyon, Nettie E.
Lyon and Helen Lyon, all of 3747
Jocelyn street, asked the court to
enjoin John F. Moran. receiver for
the Continental, from prosecuting
suits against them to collect $20,500
on their 40 shares of stock. A dozen
similar collection suits are pending.
Through their attorney, George C..
Gertman, they charge that the liza
bilities to be met by the assessment
were incurred after the Continental
retired from the banking business on
January 18, 1880, the date of its So
called merger with the Commercial
National Bank, now also in the hands
Of a receiver.
Since obligations for which stock
holders of a bank are liable are re-
stricted to those incurred in the
ordinary course of the institutions
business. they argued, liabilities oc-
casioned by transactions after the
merger cannot reasonably be charged
to the Continental stockholders.
See ultra Wires" Acts.
If the Continental was inSolvent
when it was taken over by the con-
troller of the currency in 1888, the
insolvency arose out of ultra wires"
acts by its officers which they had no
right to perform, the bill asserted.
Reciting the Continentals history,
the four stockholders told the court
it was incorporated in 1912 to engage
in a trust business, but that it later
branched out into the banking busi-
ness with the permission of the con-
troller. At the time of the merger,
in 1890, 1t was a prosperous institu-
ton with assets totaling $4,487, ,331 SIS,
as against liabilities represented by de-
posits of $2,803, ,90396 and $1,000, 900
capital stock. Gertman said that all
the liabilities, with the exception of
one small disputed claim, have been
liquidated.
At that time, the Continentals stock
sold for $135 share, it was asserted.
Terms Of Merger Contract.
BY the merger contract with the
Commercial. the Continental retired
from both the banking and trust busi-
ness and the Commercial agreed to
take over its liabilities and assets, in
cluding its good will, the plaintiffs de-
clared, adding that the Commercial
already has collected s2,336,e4 of
the assets in addition to income of
s507,826.46 yielded by the assets.
These collections total s40,868 .92
more than the aggregate deposits and
the excess represents a debt from the
Commercial to the Continental, the
court was informed. In addition, it
was stated, the Commercial still holds
unliquidated assets received from the
Continental in the sum of $429, 1880.
Notwithstanding this state of affairs,
the plaintiffs said, the controller of the
currency on May 20, 1885, ordered a
100 per cent stock assessment. This
assessment was to meet liabilities
growing out of subsequent transactions
and consequently was an improper
levy, the suit charged.
The suit today marked the second
time the Continental assessment has
been legally questioned 1t was up
held last Winter by Justice Jennings
Bailey of District Court in a ruling
In the case of Dunn versus O'Connor,
but it is matter of dispute whether
the legal principles decided in that
litigation control the suit brought to-
day. The Dunn case Is pending in
the Court of Appeals.