US SUPREME COURT DECISIONS

The Freedman's Savings and Trust Company, chartered by an Act of Congress approved March 3, 1865, 13 Stat. 510, being, during a financial crisis pressed for means, its agent, with the knowledge and consent of its trustees, borrowed of A. moneys which were applied to its use. A note therefor was signed by the actuary of the institution, who subsequently transferred to A., in satisfaction thereof, certain securities belonging to the company. That officer was held out to the public as competent to make such an exchange, and there was no departure in this instance from the established usage. No fraud was committed, and the transaction was advantageous to the institution. On the failure of the company, the, commissioners appointed to wind up its affairs filed their bill, praying that A. be decreed to deliver to them said securities. Held that the commissioners are not entitled to relief.

The Freedman's Savings and Trust Company, and John A. J. Crewell and others, its commissioners, filed, June 26, 1875, two bills in equity in the court below against Thomas M. Lanahan and others. One bill charges that Juan Boyle, on or about July 31, 1871, being indebted to the company in the sum of $2,500, for which it held his note of that date, payable in one year, executed and delivered to Eaton and Stickney to secure its payment, a deed of trust of the same date (duly recorded), with the usual power of sale, conveying certain real estate in Washington.

It further charges that the note held by the company as part of its assets was, June, 1874, unlawfully, and to the prejudice of its depositors and creditors, taken from its assets, and delivered to Lanahan, who is now holding it in his possession and pretending to be the owner of it. The delivery and transfer of the note to him are then charged to have been unlawful and void, upon the ground that the Act of Congress of March 3, 1865, 13 Stat. 510, organizing the company, requires the affirmative vote of at least seven members of the board of trustees to transfer any securities or assets belonging to the corporation, and the complainants charge that the note was transferred without any vote whatever, and without the knowledge and consent of any of the trustees.

The prayer of the bill is for general relief, and specially, that the pretended transfer of the note to Lanahan be declared null chanrobles.com-redchanrobles.com-red

Page 101 U. S. 348

and void; that he be directed to bring it into court to be disposed of according to law; and that the trust property be sold and the proceeds applied to the payment of the note, for the benefit of the company and its creditors.

The other bill makes the same averments and claims the same relief as to a note for $8,000, executed to the company by Anna E. Boyle and others, secured in the same manner as the note of Juan Boyle, and transferred to Lanahan in the same way.

Lanahan answered, stating the circumstances under which he came into possession of the notes in question, and setting up a title thereto. They and so much of the charter of the company as relates to the case will be found in the opinion of the Court.

The bill in each case, was, on final hearing, dismissed, and the commissioners appealed.