United States Supreme Court Cases & Opinions

U.S. Supreme Court

Awotin v. Atlas Exchange National Bank, 295 U.S. 209 (1935)

Awotin v. Atlas Exchange National Bank of Chicago

No. 661

Argued April 10, 1935

Decided April 29, 1935

295 U.S. 209

Syllabus

1. Rev.Stats., § 5136, as amended, in providing that buying and selling of bonds, notes or debentures, commonly known as investment securities, by national banks shall be limited to buying and selling "without recourse," forbids not only the assumption of liability by technical endorsement of the securities sold, but also by any form of agreement, such as a contract to repurchase them at maturity for the price paid the bank with accrued interest, by which the bank undertakes to save its purchaser from loss incurred by reason of his purchase. P. 295 U. S. 211.

2. One who buys securities from a national bank accompanied by the bank's undertaking to repurchase them at maturity for the amount of the purchase price plus accrued interest, is charged with knowledge of the statutory prohibition against such agreements (R.S. . § 5136, as amended), and may neither hold the bank to the forbidden contract by estoppel nor recover the purchase money upon tender of the securities to the bank. P. 295 U. S. 213.

3. The opinion of the state court whose judgment is brought here for review does not reveal whether its rejection of the contention that it is the duty of the bank to make restitution of the purchase price was rested upon a state ground or its interpretation of R.S., § 5136. But this Court has jurisdiction to review the determination of the state court that the bank's contract to purchase the securities is invalid, and to determine whether the federal statute precludes restitution of the purchase money. P. 295 U. S. 213.

275 Ill.App. 530 affirmed.

Page 295 U. S. 210

Certiorari, 294 U.S. 703, to review the reversal of a judgment recovered by the above named petitioner in an action against a national bank on its agreement to repurchase bonds which it had sold to him, and in general assumpsit for the money paid for them. The supreme court of the state denied leave to appeal.