Hightower v. American National Bank - 263 U.S. 351 (1923)
U.S. Supreme Court
Hightower v. American National Bank, 263 U.S. 351 (1923)
Hightower v. American National Bank of Macon, Georgia
Argued January 25, 1923
Decided December 3, 1923
263 U.S. 351
1. A contract between two national banks under which the assets of the one were transferred to the other and the latter assumed the liabilities of the former and advanced money in excess of the assets to pay the liabilities and expenses construed as intending not a sale, but a pledge of the assets as security for repayment of the money advanced. Pp. 263 U. S. 353, 263 U. S. 358.
2. Where a national bank, in financial difficulty but still in active operation and not thought to be insolvent, to protect the interests of its creditors and shareholders, made a contract by authority of its directors with another national bank whereby the second bank assumed the liabilities of the first, took over its assets as security, and paid the debts by means of the assets and its own funds, acting finally as liquidating agent after the shareholders of the first bank had ratified the contract and ordered liquidation under Rev.Stats., § 522, held that the contract was valid, and that the claim of the second bank for money advanced in excess of the assets was not created during the liquidation, but was a debt arising under the contract for which the shareholders of the liquidated bank were liable under Rev.Stats., § 5151, as amended. P. 263 U. S. 360.
276 F. 371 affirmed.
Appeal from a decree of the circuit court of appeals which affirmed a decree of the district court awarding
recoveries to the appellee bank, as plaintiff, in its suit to enforce the liabilities of the defendants (here appellants) as shareholders of another national bank.