# Rankin v. Fidelity Insurance Trust Safe Deposit Company

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United States Supreme Court
189 U.S. 242
Rankin v. Fidelity Insurance Trust Safe Deposit Company
Argued: February 26, 27, 1903. --- Decided: April 6, 1903
This was an action at law by the receiver of the Keystone National Bank of Erie, Pennsylvania, against the defendant company, as the actual owner and holder of 172 1/2 shares of the capital stock of the bank, standing upon its books in the name of one William W. Hand, to recover an assessment upon the shareholders of 100 per cent made by the Comptroller of the Currency pursuant to Rev. Stat. § 5151 (U.S.C.omp. Stat. 1901, p. 3465).
The facts of the case are substantially as follows: On November 15, 1890, Delamater & Co., a banking firm of Meadville, Pa., borrowed $15,000 of defendant company, in renewal of prior loans, giving therefor their note for sixty days, and as collateral security deposited 230 shares of the capital stock of the Keystone National Bank of the par value of $100 per share, standing in the name of the individual members of the firm. The shares were valued at the time at par, $23,000; the bank was in good credit, and for twenty-seven years had regularly, and was then paying, semiannual dividends. With its certificates of stock thus deposited, powers of attorney signed by the individual holders of the stock were also delivered to the defendant. These documents empowered the defendant to* transfer the shares-the name of the transferee and the attorney being blank.
Twenty days thereafter, and on December 5, 1890, Delamater & Co. failed and made a general assignment for the benefit of their creditors, and on December 17, defendant having received notice of the assignment, wrote to the assignees declining to renew the note, but offering to anticipate its payment and return the collaterals. It seems the assets of Delamater & Co. were insufficient for this purpose.
On January 10, 1891, defendant sent to the Keystone National Bank of Erie the original certificates, deposited as collateral, and requested the bank to transfer the shares to William W. Hand, a clerk in the employ of the defendant. Three days later, and on January 13, the bank paid a semiannual dividend of 2 per cent, but it does not appear who received this dividend, which proved to be the last one paid by the bank. The transfer was made on the books of the bank, and new certificates issued in the name of Hand, dated January 15, 1891, and were transmitted by the bank to the company, which acknowledged receipt of the stock, and stated that it would like to have a bid for the stock 'if you know of a purchaser.' Hand signed the transfer in blank on the back of these certificates, and in that form they were retained by the defendant. There was no receipt for the certificates except a memorandum in the handwriting of the clerk on the stub of the stock book: 'Sent to the Fidelity Insurance, Trust, and Safe Deposit Company, Philadelphia, Penn., 1/17/91.'
Fourteen months thereafter, and on March 16, 1892, the Comptroller of the Currency, finding that the capital of the bank was impaired, ordered an assessment of 25 per cent on the capital stock to make good the deficiency. The assessment upon these shares amounted to $5,750. This amount was paid by the defendant and charged on its books to Delamater & Co. as an additional advance. Its check was sent to the bank in a letter signed by Mr. Hand.
On December 22, 1892, pursuant to Rev. Stat. § 5143 (U.S.C.omp. Stat. 1901, p. 3463), and with the approval of the Comptroller of the Currency, the capital stock of the bank was reduced from $250,000 to $150,000, divided into 1,500 shares of $100 each. Thereupon, and on January 24, 1893, the defendant sent to the bank the certificates for 230 shares, and on February 7 received the certificates in the name of Hand, for 172 1/2 shares, being the reduced number. Hand signed a transfer in blank on the back of the certificates, and in that form they remained in the possession of the defendant. On March 20, 1894, the vice president of the defendant company addressed a letter to the bank, stating that the company held 172 1/2 shares of the stock registered in the name of W. W. Hand, and requesting a copy of their last statement and any other information regarding the business of the bank, and as to whether there were any sales of stock, saying 'We would like to sell our holdings, if marketable.' No reply being received to this letter, the defendant company repeated its substance in another letter of April 4, stating that 'as we have a loan of $22,000 depending upon the value of 172 1/2 shares, we desire the above information.' Several other letters were written to the same purport.
On June 20, 1897, the Keystone National Bank closed its doors, on July 26, the Comptroller of the Currency appointed a receiver, and on November 3 ordered an assessment of 100 per cent on the stockholders. Whereupon this action was brought to recover an assessment of $17,500 on the shares registered in the name of Hand.
The case was tried before a jury, and the question submitted to them 'whether, before this Keystone National Bank failed, the defendant company, the Fidelity Trust Company of this city, was the real owner of these shares of stock, or whether it continued to be the pledgee of the stock,-whether the stock had become theirs in the sense in which we use in ordinary speech the word 'owner,' or whether it had been continued to be pledged to them as collateral security for the payment of the note which has been offered in evidence.'
Upon the issue thus submitted the jury returned a verdict for the defendant, upon which judgment was entered, and the case taken to the circuit court of appeals upon writ of error. That court affirmed the judgment. 46 C. C. A. 509, 108 Fed. 475.
Mr. Asa W. Waters for plaintiff in error.
Mr. Richard C. Dale for defendant in error.
Mr. Justice Brown delivered the opinion of the court:

## Notes

This work is in the public domain in the United States because it is a work of the United States federal government (see 17 U.S.C. 105).
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