Case ID: wash_116/html/0313-01.html
Source: Caselaw Access Project
Author: {"author": "Tolman, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

[No. 16485.
    Department Two.
    July 8, 1921.]
    German-American Mercantile Bank et al., Respondents, v. H. E. Foster, Appellant.
      
    
    Corporations (46)—Stock Subscriptions—Actions On—Amendments. A subscriber to tbe capital stock of a banking corporation would not be released by tbe amendment of its articles of incorporation so as to change its name and increase its capital stock for the purpose of absorbing the assets and assuming the liabilities of another bank, since such amendment did not end the corporate existence of the original bank.
    Same (46). An error in judgment on the part of the bank examiner in permitting one bank to absorb another, resulting in loss to the former, would not constitute a defense against the liability of a nonassenting stockholder in an action to recover on his subscription to the capital stock of the original bank.
    Appeal from a judgment of the superior court for King county, Ronald, J., entered June 19, 1920, upon findings in favor of the plaintiff, in an action to recover on stock liability, tried to the court.
    Affirmed.
    
      Carl J. Smith, for appellant.
    
      D. E. Twitchell, for respondents.
    
      
      Reported in 199 Pac. 314.
    
   Tolman, J.

This action was instituted to recover from appellant $500 and interest as superadded liability accruing by reason of his’ ownership of five shares of the capital stock of the respondent hank, of the par value of $100 each. From a judgment as prayed for, this appeal is taken.

Appellant subscribed for, and became the owner of, the stock in question at the time of the incorporation of the bank in April, 1911. The hank was incorporated as the German-American Bank, the amount of its capital stock not being shown in the record. In 1915, the bank filed amended articles of incorporation, changing its name to that of German-American Mercantile Bank, and increasing its capital stock to $200,000. Appellant opposed the making of these changes, but thereafter accepted the new stock certificate in lieu of the one first issued to him, which, on its face, shows the change of name, etc. In large part appellant’s defenses in the trial court, and assignments of error here are based upon the assumption that the German-American Bank ceased to exist in 1915, and' that the German-American Mercantile Bank was a separate and distinct corporate entity; and that the bank examiner, by permitting the latter to succeed the former and absorb the assets and assume the liabilities of the Mercantile National Bank, had caused the appellant to lose the value of his stock in the German-Ameriean Bank. Appellant’s affirmative answer and his cross-complaint based upon this theory, were, on motion, stricken by the trial court. We see no error in such ruling. There was but one corporation. The amending of its articles did not end its existence, or change appellant’s status as a stockholder; and if the amendment was effected as the statute requires (and it is not alleged otherwise) appellant was bound thereby whether he assented or not.

Nor would an honest error in judgment on the part of the bank examiner, if there was such, and the permitting of the absorbing of another banking institution, though loss followed, be a defense to this action.

All of the other points raised by appellant are decided against him in Hanson v. Soderberg, 105 Wash. 255, 177 Pac. 827. Still adhering, as we do, to the views therein expressed, a.rediscussion of the subject seems unnecessary.

Finding no error the judgment appealed from is affirmed.

Parker, C. J., Holcomb, Main, and Mitchell, JJ., concur.