Court Opinion

ID: 5581316
Source: CourtListenerOpinion
Date Created: 2022-01-11 01:40:06.047276+00
Date Added: 2024-06-11T08:36:05.444718
License: Public Domain

Beck, J.
(After stating the foregoing facts.) From the report of the case of Whitney v. Butler, 118 U. S. 655 (7 Sup. Ct. 61, 30 L. ed. 266), it appears that “A, an owner of shares in the capital stock of a, national bank, employed a broker and auctioneer to sell them by public auction. They were bid off by B, who paid the auctioneer for them, and received from him the certificate of stock, with a power of attorney for transfer duly executed in blank. The auctioneer paid the purchase-money to A. B was employed by the president of the bank to make this purchase for a customer of the bank, who had made a deposit in the bank for the purpose, and he delivered the certificate and the power of attorney to the president, and received from the bank the money for the purchase. No formal transfer of the stock was made on the transfer-book of the bank. , Shortly afterwards the bank became insolvent, and eventually went into the hands of a receiver, who made an assessment on the stockholders under the provisions' of Rev. Stat. § 5205 [U. S. Comp. St. 1913, § 9767], to make up the deficiency in the capital. Until after the stoppage A had no knowledge as to the purchaser, or as to the neglect to formally transfer the stock, and no reason to suppose that the transfer had not been made.” And it was there held: “That the responsibility of A ceased upon the surrender of the certificates to the bank, and the delivery to its president of a power of attorney sufficient to effect, and intended to effect, as the president knew, a transfer of the stock on the books *58of the bank.” The decision in that case was based upon the ground that after the sale of the stock the certificate therefor was surrendered to the bank itself, accompanied by a power of attorney which would enable its officers to make the transfer on the books, and that the position of the seller in the ease was analogous to that of a grantor in a deed who had deposited it in the proper office to be recorded. We do not think that the facts in the case at bar bring it, in favor of the defendant, up to the case last referred to. For, while Hunt was the cashier of the bank and may have been authorized to make the transfer upon the books of the company, the delivery of the stock was to him as purchaser, or as agent for a purchaser in case Hunt’s wife should desire the stock. The defendant in this ease, who was the owner of the stock, testified that he told Hunt to make the transfer; and the court below may have treated this as uneontradicted testimony that he directed Hunt as the cashier to make the transfer. But pause for a moment to consider, to whom would the transfer have been made on the books of the bank at the time Jackson gave the alleged direction to Hunt? Would it have been to S. A. Hunt, or to his wife? We think that the case of Richmond v. Irons, 121 U. S. 27 (7 Sup. Ct. 788, 30 L. ed. 864), is a ease more nearly in point, and upon principle rules the present case. In that case a party named Comstock sold his shares of stock in a national bank to one Holmes, the latter * being president of the bank; and the court, after a statement of the facts of the case, ruled: “The case is not within the rule laid down in Whitney v. Butler, 118 U. S. 655. Here there is no proof, as there was in that case, of the delivery of the certificate to the bank and a power of attorney authorizing its transfer, with a request to do so made at the time of the transaction. The delivery was to Holmes, not as president, but as vendee. We are, therefore, constrained to hold that the decree below, in charging Com-stock with liability as the owner of 150 shares, was not erroneous.” A general statement of the principle covering such cases is found in the syllabi to that case and is in the following language: “A stockholder in a national bank continues liable for the debts of the company, under the statutes of the Hnited States, until his stock is actually transferred upon the books of the bank, or until the certificate has been delivered to the bank, with a power of attorney authorizing the transfer, and a request, made at the time of the *59transaction, to have the transfer made; a delivery to the president of the bank as vendee and not as president is insufficient to discharge the shareholder under the rule in Whitney v. Butler, 118 U. S. 655.” See also Bolles’ Nat. Bank Act Ann. 144 et seq.; 3 Michie on Banks, 1865 et seq.
Applying the doctrine laid down to the facts of the present case, we are of the opinion that the court erred in directing a verdict for the -defendant.

Judgment reversed.

All the Justices concur.