1935, authorized said Receiver to petition the Court for an Order permitting said Receiver to accept the securities delivered to him in trust, in full settlement of the stock assessment liability of the John A. Harper Estate.
In pursuance of said authority, the said Receiver petitioned the District Court of the United States for the Western District of Pennsylvania at No. 2589, In Equity, to accept the assets of the said John A. Harper Estate distributed to him as such Receiver under Decree of the Orphans' Court of Allegheny County, Pennsylvania, at No. 205 January Term, 1932. At this time an Order was made by the Court on February 13, 1935 (two years and nine months after the Decree of the Orphans' Court) authorizing and directing Arthur R. Atwood, as Receiver of The Bank of Pittsburgh National Association, 'To accept from the Fidelity Trust Company of Pittsburgh the assets of the Estate of John A. Harper as delivered to the Receiver of The Bank of Pittsburgh National Association, Pittsburgh, Pennsylvania, by the Fidelity Trust Company of Pittsburgh, Pa., in accordance with the decree of the Orphans' Court in and for Allegheny County, Penna. at No. 205 January Term, 1932.'
The Fidelity Trust Company, Trustee under the Will of John A. Harper, deceased, is now the record owner of 693 shares of the capital stock of The Bank of Pittsburgh National Association, under Decree of the Orphans' Court of Allegheny County, Pennsylvania, at No. 205 January Term, 1932, of said Court.
As of the commencement of this action three liquidating distributions had been made to the shareholders of The Bank of Pittsburgh National Association by the defendant above named as agent as follows: February 20, 1943, $ 3.24 per share, February 21, 1944, $ 3 per share and March 3, 1945, $ 6 per share.
No payment or distribution has been made by the defendant to the plaintiff as owner of 693 shares of said stock, except $ 292.56 on account thereof, and although a demand has been made by plaintiff upon the defendant for the balance of said distribution, payment thereof has been refused.
As the court views the issues raised by the motions to dismiss they are to be determined by the date upon which the Receiver of The Bank of Pittsburgh National Association took title to the securities of the Estate of John A. Harper, deceased, under the Federal law. If May 24, 1932, the date of the Decree in the Orphans' Court, or 10 days thereafter allowed for exceptions, be taken as such date of title the motion of the defendant to dismiss the action is well founded. If the Receiver then had the right to make an agreement by which he released the Harper Estate from liability on an undisputed debt of $ 34,650 upon delivery to him of securities of an admitted net value of but $ 30,159.58, common sense leads to the proposition that he took title to the securities delivered to him and could handle them as he desired. He took over all the assets of the Harper Estate and that estate lost all title to those assets. If the securities decreased in value he had no remedy, but if the reverse occurred he was the beneficiary, not the Harper Estate. To hold otherwise would be to adopt a 'heads-I-win-tails-you-lose' policy on behalf of the Estate.
If the Receiver took title on May 24, 1932, the plaintiff, on behalf of the Harper Estate had paid only 85% of the assessment debt, and the distribution to the shareholders of The Bank of Pittsburgh National Association, was correct. The actual and legal date of the transfer of title to the Receiver however, was not May 24, 1932, but was on January 13, 1935. On January 7, 1935, the Comptroller of the Currency, pursuant to a request therefor in December, 1934, made by the then Receiver, approved the transfer of the securities and directed that application be made to the court for approval of the compromise. On January 13, 1935, counsel for Arthur R. Atwood, then Receiver, filed in this court a 'Petition for Leave to Compromise and Settle Assets' and on the same day the court authorized the Receiver to accept from the Fidelity Trust Company of Pittsburgh, the assets of the Estate of John A. Harper as described in the decree of the Orphans' Court of Allegheny County at No. 205 January Term, 1932. This procedure was as directed by the Act of February 25, 1930, Title 12, Sec. 67 U.S.C.A., which follows: 'Any receiver of a national banking association is authorized, with the approval of the Comptroller of the Currency and upon the order of a court of record of competent jurisdiction, to compromise, either before or after judgment, the individual liability of any shareholder of such association.'
Until the statute had been obeyed the Receiver was without authority to compromise the assessment against the Estate of John A. Harper, and anybody dealing with him was chargeable with notice of that fact. True, the Receiver had possession of the securities, but until approval of the Comptroller and of the court had been obtained he was only holding them in trust for the Estate of John A. Harper, and that Estate had the right to any increase in value which had accrued to the securities since the delivery to the Receiver. Just what the value was on January 13, 1935, does not appear, but the increase claimed in the complaint and its amendments justifies a belief that it was approximately the amount of the assessment and considerably greater than the amount credited to the Harper Estate upon the defendant's distribution. Defendant's error in as of the date May 24, 1932, instead of January 13, 1935.
The motions to dismiss the complaint and the amendments thereto will be denied.
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