Dunscombe v. Smith

In 1926 Stuart Bank & Trust Company was closed by order of the Comptroller and later, in October of the same year, was permitted to reopen under a freezing agreement. The terms of that agreement were that 25% of the deposits of the bank on the date of closing would be made immediately available upon reopening; 50% was to be paid by the issuance of 5 certificates of deposit in the amount of 10% each, payable over a period of 15 months and the balance of the deposit written off as a liability of the bank. In order to satisfy the depositors the bank agreed to create a trust of certain securities…