Deitrick v. Standard Surety & Cas. Co., 303 U.S. 471 (1938)

Deitrick v. Standard Surety & Cas. Co.,

No. 455

Argued March 7, 8, 1938
Decided March 28, 1938
303 U.S. 471

CERTIORARI TO THE CIRCUIT COURT OF APPEALS

FOR THE FIRST CIRCUIT

Syllabus

1. A defense of fraud, good against a national bank in an action to enforce a contract, is good against the bank’s receiver in such an action. P. 479.

2. The receiver of a national bank sought to enforce against surety Company, as contracts made to the bank, bonds purporting to have been executed by the company through a general agent and purporting to guarantee payment of certain notes held by the bank. The surety alleged and the proofs showed that the bonds were obtained by the bank through the fraud of the bank’s president in collusion with the surety’s agent. There was evidence that the agent knew the bonds would be shown to the bank directors and to any others entitled to inquire concerning the notes, for the purposes of deception. Held that the pleadings afforded no basis for a recovery by the receiver upon the theory that, because the comptroller and national bank examiners were deceived by the bonds to the injury of creditors, therefore the surety was estopped to deny their validity as against the receiver, representative of such creditors. P. 479.

90 F.2d 862, 866, affirmed.

Certiorari, 302 U.S. 676, to review the affirmance of judgments and decrees of the District Court in actions at law brought by the predecessor of the above-named petitioner, receiver of a national bank, to recover from the surety company on bonds held by the bank, and in suits in equity brought by the surety company in a state court and subsequently removed, in which the surety sought to have the bonds canceled for fraud. The cases were heard in conjunction by the District Court, and evidence was taken and findings were made by an Auditor and Master. That court dismissed the actions and decreed in the surety’s favor.