Court Opinion

ID: 6578577
Source: CourtListenerOpinion
Date Created: 2022-07-20 19:36:27.11916+00
Date Added: 2024-06-11T15:57:11.682061
License: Public Domain

Butlek, J.
We have already holden, in the case of The State v. The Phœnix Bank, (ante, page 205, decided at the present term,) that under the provisions of the national banking law it was competent for the absolute stockholders of an existing bank in this state to carry all the shareholders, absolute or qualified, into a national organization, unless they dissented and withdrew, and unless prevented by controlling *247state legislation. In this case the hank was not so controlled and did reorganize and carry its qualified stockholders into the new organization. Why then are they not, irrevocably, members thereof, and how can they be excluded ?
It is claimed on behalf of the respondent bank that before reorganization they accepted the provisions of the act of 1864 and are entitled to the benefits conferred, and therefore entitled to exclude the qualified stockholders unless they also complied*technically with its provisions.
But we are of opinion that the bank is in no condition to make that claim.
When the act of 1864 came into operation the respondent, bank was a state institution. How far that part of the act applicable to institutions already organized could have been made operative to exclude stockholders in an institution organized under a law of Congress, embracing its qualified stockholders, with rights apparently vested and absolute, we need not inquire. So far as the act was applicable to the respondent bank, it was entirely prospective. And it is very clear that the bank cannot be permitted to take the benefit of a technical provision in its favor, unless it has complied technically with its requirements.
The eighth section of that act provides a notice to the qualified stockholders of the determination of the absolute stockholders to reorganize the bank. It is' framed upon the idea that such notice would be given, and an opportunity of thirty days allowed for an election by the stockholders before the determination should be carried into effect. It evidently was in the contemplation of the General Assembly that the assent or dissent of the qualified stockholders should be had before the organization certificate was made, that they might be omitted from or embraced in it as they should desire. But the bank gave no notice of its determination prior to its actual reorganization. The notice and the execution of the organization certificate bear the same date, and it is not found that the former preceded the later. The bank then have not pursued the provisions of that act in their letter or spirit. They embraced the state, and the other qualified stockholders *248in the certificate, without any surrendry of their state charter, independently of the act of 1868, and relying principally upon the suspension which the act of 1864 conferred. Having thus assumed to include the state and the other qualified stockholders as equals in the new organization without pursuing technically and strictly the provisions of the act of 1864, they are in no condition to insist now upon their exclusion. They have made them stockholders, with equal rights and privileges under the law of Congress in the new institution, and we know of no power In this or any federal court that can exclude them against their consent. The law under which the bank exists, and the certificate of the comptroller, which conferred vitality upon it, fixed their rights in proportion to the number of their shares as perfectly as they fixed those of the president or of any other stockholder, and it does not lie in the mouth of either to say that they are not stockholders, or to insist upon their exclusion. '
But if this .were not so, we should not hesitate to hold the state entitled to all the rights of a stockholder upon other grounds.
The share of the state in the old bank was large, and it was natural and to be presumed that its officers would desire to know, and would take pains to learn, whether the treasurer of the state intended it should become a stockholder or not. They called upon him to assent to the change and to so vote upon the question whether a reorganization should take place or not; and it does not appear that they called upon any of the other qualified stockholders. One of the officers procured his power of attorney and voted accordingly. They thereupon included the state as a stockholder in their organization certificate. It is found that the treasurer had in fact elected, and it is not found that they did not know of that election. And the fact that they did know is clearly inferable from these facts and their subsequent conduct before they were advised by counsel that the state could be excluded.
We do not understand it to be claimed that if the fact clearly appeared and was found, that the officers of the bank knew of the election of the treasurer and acted' upon that *249knowledge when they included the state in the organization certificate, they could now be permitted to claim a forfeiture of the rights acquired by the state because of his failure to give technical notice of his election, nor could we assent to any such claim if made. If, as is found, he had in fact elected, and they knew it, and acted upon that knowledge, the giving of the subsequent notice and the failure of the treasurer to respond were of no consequence. The bank possessed the knowledge which that provision was intended to give them, and acted upon it, and can take no benefit from the omission.
But again, we are. of opinion that the action of the bank in including these qualified stockholders in their organization certificate without previously ascertaining, in the mode pointed out in the statute, whether they assented or dissented, was substantially an assumption, that they assented, and a waiver of the provision of the statute in relation to notice and dissent so far as made for their benefit. They evidently acted upon the idea that they could be included and be permitted to withdraw if they should subsequently dissent. It is not to be assumed that the bank would prefer that they should withdraw in order to retain their share of the surplus, or that the legislature intended that they should be deprived of their rights by a technicality. The purpose of the provision was the ascertainment of a fact for the benefit of both, fixing the lights of the parties in case of dissent, so that the remaining capital could be transferred and a just compensation made to those who withdrew. The bank assumed the fact, acted upon it, procured the right to be conferred under the national law, and cannot now insist .upon a forfeiture because the informátion was not given them.
But if all this were not so, we should hold upon the facts found that the action of the bank in soliciting the assent of the treasurer, acting upon the knowledge that he iirtended to elect, and including the state in the organization certificate, and publishing that certificate as embracing the state, was calculated to mislead the treasurer, and induce him to believe that his assent would be assumed, unless he dissented, and to *250neglect to make any response to the notice given by the bank; and under such circumstances we should not hold the state to a forfeiture.
We are of opinion therefore that the state is duly and regularly a stockholder of the Hartford National Bank, as claimed j that it is entitled to an account of dividends and the payment of such as have been declared upon their stock, and further entitled to a certificate for 1655 shares of capital stock of the bank, and all the powei’s and privileges of a stockholder to that extent; and the superior court is advised to decree accordingly.
In this opinion the other judges concurred.