The morning news. [volume] (Savannah, Ga.) 1887-1900, 1894-08-23
SUED ON THEIR STOCK.

casa in Brunswick, That Went
AGAINST the Depositors of a Bank.
A snit growing out of the failure of the
r--,ns,aick State Bank last year, which
as fled in the superior court of Glynn
MY before Judge Sweat last Novem-
- yras heard in Brunswick this week.
-itb results which may be of interest to
lain parties here who were interested,
we'll as TO others who frequently have
!, deal with the questions which are in
rolved in the case.
"a The suit was brought by the depositors
,,tbe Brunswick State Bank against all
n ,ss narties who were ever stockholders
:, anv time to enforce a personal liability
= the amount Of 500 in addition to the
= mount paid in for the stock, that is, the
,rjt contemplated a liability double the
AMOUNT Of the stock.
Under the construction Of the charter
q was claimed by those who brought the
Mn that the stockholders or creditors,
notwithstanding that only 500 shares, or
n $4,000 in stock, were issued by reason of
the successive transfers of the stock were
liable to the extent of S195, 400 by reason
If the fact that the books showed there
B had been held / ,454 shares of stock IN ex-
ress of the 500 shares originally issued.
Among the parties sued as stockholders
4 we're Messrs. Hull & Lathrop, the Chat
ham Bank and the Savannah Bank and
Il Trust Company of Savannah, as well as
MANY parties in Brunswick and other
Dlaces In drawing the charter Of the
hank. to a certain extent, the national
banking act was followed. The ninth
section of the act chartering the Bruins.
wick State Bank reads:
That said corporation shall be responsible
TO its creditors TO the extent OF it's property
and assets, and the stockholders in addition
thereto shall be individually liable equally
and ratably, and not one for another as sure
ties to the creditors of such corporation for
all contracts and debts of said corporation to
the extent ana amount OF their stock therein
al the par value thereof. respectively at the
time the Debt was created. in addition to the
amount invested in such shares; that the
powers franchises and privileges granted to
this corporation in this act shall not be re
pealcd or changed so as to affect it's power
ETC. ETC. -
So far as the portion of this clause
quoted is concerned, the only change that
has been made from the national banking
act is the addition of the words, as will
be seen, respectively at the time the
debt was created"
In the suit, as it was brought, the de-
positors did not state that date at which
they became depOsitors, nor did they
state the periods during which the stock
holders sued were stockholders, the
plaintiffs merely asserting that they were
depositors for certain amounts as stated
and that the defendants were stockholders
for certain shares, the nun Der of which
was set forth.
This bill was demurred to by number
of the stockholders in Savannah, among
whom was the Chatham Bank, which at
one time held twenty shares as collateral
for loan, and which institution was rep
resented by Mr.. T. P. Ravenel. Among
other grounds on which the demurrer
was made was that under a fair construc-
ton of the charter under which the bank
was created, the stockholders were only
liable for such debts as were created by
the bank during the time they We're stock
holders.
This brought up discussion as to the
construction of the charter, and upon the
court intimating that it was necessary
for the creditors to specify at what time
the debts were created and also to allege
the dates on which certain parties who
were sued became stockholders and when
they ceased to be stockholders, if not still
so. The petitioners filed amendments
meeting these objections to the bill, and
after these amendments were in it was
argued on behalf of the Chatham Bank
and one or two other alleged stock
holders that under the construction
placed on the charter by the ruling of the
court, the petition showed no cause of
action against them, as all the debts that
were being sued for had been created
after the defendants were shown TO have
ceased to be stockholders. Upon this
motion being urged, the court ruled that
the construction placed on the charter
by him necessarily put these parties out
OF the case, and an order was then taken
dismissing the bill as to the Chatham
Bank and certain other parties who de-
INJURED on the same grounds.
The arguments in the case began be-
fore Judge Sweat last Monday in Bruins
wick, and were concluded Tuesday even
ing Messrs Goodyear and Kay repres-
ented the creditors, or depositOrs, for
whom the bill was filed. Most of the
Brunswick bar was interested in the
case in some way or other, and from Sa-
vannah, Mr. T. p. Ravenel appeared for
the Chatham bank, Mr.. r. M. Cunning
ham for Messrs. Hull & Lathrop, and
Mr.. w. l.. Clay, Jr.. for the Savannah
Bank and Trust Company
The Indebtedness as set forth in the bill
cording to the statement Of the affairs of
the bank which has been made, it will
require something over $4,000 to pay out
all the Indebtedness. The attorneys for
the p titioners have filed exceptions to
the finding of Judge Sweat. who held that
those parties who were not stockholders
at the time the Indebtedness sued for was
created were not liable. and say that they
will take the matter to the supreme court
The Chatham Bank held only twenty
shares of stock in the bank, and had dis
posed of it before any of this indebted
ness alleged in the bill was created.
An inspection Of the books of the bank
showed a most remarkable mode of max
ing stock transfers. There was, in fact.
no regular stock book on which transfers
were entered, and in many instances
there was only the signature on the back
OF the scrip of the party who had held
the stock without any other entry above
as to date or to whom transferred, and
this scrip pasted back in the scrip book
on the stub from which it had been torn
was all that appeared.