Case Name: BAKER v. REEVES et al.
Court: United States Circuit Court for the District of Washington
Jurisdiction: United States
Decision Date: 1898-02-03
Citations: 85 F. 837
Docket Number: 
Parties: BAKER v. REEVES et al.
Judges: 
Reporter: Federal Reporter
Volume: 85
Pages: 837–838

Head Matter:
BAKER v. REEVES et al.
(Circuit Court, D. Washington, N. D.
February 3, 1898.)
1. Transfer of Stock in National Bank — Insolvency of Bank — Liability for Assessments.
-A stockholder in'a national bank, with knowledge that the bank is in a tailing condition, cannot make a voluntary transfer of his stock to one financially irresponsible, and thereby escape liability for assessments.
2. Same — Insolvent Bank — Liability of Owner of Stock at Time of Failure.
The owner by assignment of stock in a national bank at the time of its failure is liable for assessments thereon, though his assignor, who transferred it knowing that the bank was in a failing- condition, is also liable.
This was a suit in equity by Charles H. Baker, as receiver of the Merchants’ National Bank of Seattle, against W. H. Beeves, Minnie Beeves, and ira Bronson, to recover an assessment on certain shares of stock in the hank.
Stratton. Lewis & Powell, for plaintiffs.
Boyd t1. Tallman, for defendants.

Opinion:
HANFORD, District Judge.
The object qf this suit is to hold each of the defendants liable for an assessment upon stock of which the defendant William H. Reeves was owner, and which he transferred to liis daughter, Minnie Reeves, and subsequently held as her assignee or agent. In that capacity he transferred part of it to the defendant Bronson.
At the lime of the first transfer, William H. Reeves was a director of the hank, and fully informed as to its condition. It was a time of general financial depression, and it was difficult to keep on hand the amount of money required as a reserve fund to meet the demands of the depositors, and to maintain the credit and standing of the hank. Minnie Reeves is the daughter of William H. Reeves, and at the time owned no property, and was dependent on him for support, and was a student in college. William H. Reeves voluntarily, and without any request from his daughter, or consideration, transferred the stock lo her, and immediately thereafter she indorsed the certificates and left them in his keeping. I am convinced that at the time of making the transfer of stock to his daughter. Mr. Reeves hoped and believed that the hank would survive, and that his present would he a benefit, rather than an incumbrance, to Ms daughter; hut the hank was in a failing condition, and there was then ground to apprehend that it would become insolvent, and he compelled to go out of business. With knowledge of its condition, lie could not transfer the stock to a person financially irresponsible, and thereby escape the liability of a shareholder for assessments to meet the demands of «-editors. Bowden v. Johnson, 107 U. S. 251-264, 2 Sup. Ct. 246. The defendant Bronson, having received the stock, and being the holder of it at the time of the failure of the bank, is liable for the assessment; and, for the reasons stated, tin- defendant William H. Reeves is also liable.
Upon the authority of the case of Gilbert v. Van Arman, Fed. Cas. No. 5,414, I overrule the defendants' objection to the evidence on the ground that the same was not taken in time. A decree will be entered according to the prayer of the bill.