Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1886-11-02
UNITED 81 ATEs SUPREME COURT.
Decision Rendered in the Important
Series Of Cases known as the Pacific
National Bank Cases.
WASHINGTON. Nov. |

WASHISGToS. Nov. l.
decision was rendered BY the Supreme
Court OF the United States today in the i'm
portant series of cases known as the Pacific
National Bank cases, brought here bv writ Of
error and appeal from the Circuit Court of
the United States for the District of Massa-
chuseIt' There are ten cases bu, the opin-
ION OF this court, which was delivered by
Justice Matthews. was written with especial
reference to the cases of John p Delano,
appellant and plaintiff IN error, against Peter
Butler. receiver. These cases arise out of
-uit brought by the receiver of the insolvent
Pacific National Bank of Boston against
John T. Delano to enforce the larter's liabil-
ity as holder Of go share. of the banks stock.
including 80 shares of the s0-called new
stock, created bv an increase in the bank 5
capital made by resolution OF the directors
! In tho autumn of 1881
| Delano admits the ownership of 80 shares,
| but contests his liability upon the other 30
shares, which comprise part of the new or
/ increased stock. Delano claims that the act
! increasing the capital from $4,000 to
| 81 100000 was Illegal, contrary to law, and
void and that the alleged 80 shares of new
stock never had any existence. He also con
/ tends that .by his subscription for 30 shares
| OF proposed new he never became liable. on
account of the debts of the bank, beyond 30
shares OF the valued stock Delano further
maintains that by his contribution in Janu-
ary, 1882, of the amount, equal u the par
value of all the stock ever held by him,
towards the fund used in the payment of the
debts of the bank. the bank then being insol-
vent, ne in the law discharged his liability rs
stockholder in the bank. The c0nrt holds
that the increased capital stock was legal, that
| ali OF the requirements were complied With
and that the fact that the entire amount
! of $500, 900 increase was not all paid in but
| that the capitol was fixed at 1868 900. The
amount actually paid does not affect the
| legality of the increase since 1t was within
the power OF the association and the comp
troier of the currency TO fix the increase AZ
that or any other amount within $500, 200.
| The bank, subsequent to its suspension, was
gwen the alternative of assessing its full
capital stock or going into liquidation, and
the stockholders almost unanimously voted
! to make an assessment "a a condition thar
| would enable the bank to resume operations.
| Delano paid the full amount of the assess
ment imposed on him as a holder of 60 shares
and in the opinion of the court it Is now not
! open to him to say that he made this paynenl
in ignorance of the facts. His course must
be considered a complete acquescence IN and
ratification of the previous action OF the
stockholders, and he cannot deny the owner
ship of sixty shares of the capital stock
of the bank as fixed at the increased sum.
Whatever hardships there NAV be in the
case the court is unable to discover any
means Of equitable relief If the money was
paid in on increased capital under mistaken
supposition, that in the event of a future fail
ure nothing more would be required of the
subscribers, there is nothing to show that the
| latn hnlJ l.1 into the m stake bV
any misrepresentation, either by fact or aw
IN the part of the creditors, for whose bene-
! ht the receiver is now acting. The mistake,
| if any, is one for which the shareholders
alone are responsible. On the whole, the
| court is constrained to conclude that the de
fenses at law and the alleged ground for re-
lief in equity are alike unintenable, and that
the Judgment and decree of the circuit court
must be the affirmed opinion by Justice Mat
thews The decision on these two cases will
also be decisive, if 400 or 500 suits are pend
ing in the court below.
There is another Pacific Bank case, but
one resting upon different set of facts The
testator of the plaintiff, in error at the time
of his death, held 100 shares of stock of the
bank Before the suspension Of the bank
this stock had been sold. but owing to the
ne negligence of the bank officials it had not
| formaliy oeeh tausieIleu u" 'le pa"A
books. In view of this state of facts.
the court holds that the responsibility of
the defendants ceased upon the surrender OF
it. certificates to the bank, and delivered to
its president of the power of attorney, suffi-
cient to effect, and intended to effect, as that
! officer well knee transfer of stock to pur-
chasers The Judgment is therefore reversed
and the cause remsnded with direction to
! enter Judgment for the defendants. The
opinion is by Justice Harlan.