Houston v. Drake
United States Court of Appeals for the Ninth Circuit
97 F.2d 863 (1938)
- Written by Robert Cane, JD
Facts
Under the National Bank Act, a national bank could exercise incidental powers if they were necessary to carry on the business of banking. Arizona National Bank (Arizona Bank) was a failing bank. Consolidated National Bank of Tucson (Consolidated Bank) agreed to take over most of the assets of Arizona Bank and take assignment of Arizona Bank’s lease for Arizona Bank’s office. However, Consolidated Bank did not intend to conduct banking business at Arizona Bank’s premises except for a short period while Consolidated Bank’s main property was under construction. Years later, Consolidated Bank went into liquidation. Houston (plaintiff) was appointed as the voluntary liquidating agent of Consolidated Bank. Houston notified Drake (defendant), the lessor of Arizona Bank’s premises, that he rejected the lease. Houston brought an action for declaratory relief to determine the rights of Consolidated Bank under the terms of the lease. Drake counterclaimed for rent due under the lease. The district court held that Consolidated Bank’s assumption of the lease was valid. Houston appealed, arguing that Consolidated Bank lacked the authority to assume Arizona Bank’s lease.
Rule of Law
Issue
Holding and Reasoning (Wilbur, J.)
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