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CLOUSER v. HARRISBURG NATL. BANK & TRUST CO.

UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF PENNSYLVANIA


July 12, 1963

Paul E. CLOUSER, Trustee in Bankruptcy for the Estate of Truman Horner, In Bankruptcy No. 11547, In the United States District Court for the Middle District of Pennsylvania, Plaintiff,
v.
The HARRISBURG NATIONAL BANK AND TRUST COMPANY, Defendant

The opinion of the court was delivered by: FOLLMER

This matter is before the Court on motion of defendant to dismiss part of an amended complaint.

The parties are in substantial agreement on the facts which may be briefly summarized as follows:

 On December 15, 1960, Truman Horner was adjudicated a bankrupt. On December 12, 1962, within two years after that date, his Trustee in Bankruptcy brought a suit against The Harrisburg National Bank and Trust Company under Section 60 of the Bankruptcy Act, alleging that certain payments made by the bankrupt to the bank were preferences.

 More than two years after December 15, 1960, namely, on or about February 28, 1963, a motion to file an amended complaint was served on defendant, with notice that the motion would be brought before the Court on April 4, 1963. Before defendant had an opportunity to answer or protest, an Order was inadvertently made on February 28, 1963, allowing the filing of the amended complaint.

 On March 20, 1963, defendant filed a motion to dismiss part of the amended complaint, namely, the addition of three alleged preferential payments which were made within four months of the bankruptcy.

 From the affidavits and briefs filed by both parties, and oral argument, it further appears that The Harrisburg National Bank and Harrisburg Trust Company were prior to October 27, 1961, two separate corporations having their main offices at the same premises, to wit: 10-16 South Market Square, Harrisburg, Pennsylvania, and were operated by five identical officers in the positions of President, First Vice President, Administrative Vice President, Vice President and Comptroller, and Vice President and Secretary. The Harrisburg National Bank had a branch office located at Mechanicsburg, Pennsylvania, and Harrisburg Trust Company had a branch office located at Highspire, Pennsylvania.

 Beginning on or about September 28, 1957, loans were made by the Mechanicsburg office of The Harrisburg National Bank to Truman E. Horner. Beginning August 13, 1959, the Highspire office of Harrisburg Trust Company began lending to Truman E. Horner. Each branch had its own Advisory Board by whom the loans were approved. Each branch also had its own manager. Some loans were secured, some unsecured.

 Prior to August 1960, Horner conferred with Samuel M. Pursel, Administrative Vice President of both banks, concerning repayment of the loans made by both banks, and these conferences were held in the common meeting room on the premises on South Market Square, Harrisburg, Pennsylvania.

 On October 27, 1961, The Harrisburg National Bank and Harrisburg Trust Company were consolidated under the provisions of the National Banking Act into The Harrisburg National Bank and Trust Company, which is the named defendant in this suit. The complaint alleges that four repayments on unsecured loans were made by Horner on August 26, 1960, September 7, 19, and 19, 1960. The answer claims that the August 26, 1960, payment was on a secured loan and consisted of principal and interest; that the September 7, 1960, payment was principal and interest on an unsecured loan; that one payment made on September 19, 1960, was payment on principal of an unsecured loan, and that the second payment made on September 19, 1960, was interest on an unsecured loan; that all four payments were made to The Harrisburg National Bank. The amended complaint attempts to add repayments as follows: September 2, 1960 $ 4,500.00 September 19, 1960 5,000.00 October 19, 1960 2,200.00.

19630712

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