Court Opinion

ID: 3864447
Source: CourtListenerOpinion
Date Created: 2016-07-06 08:58:06.036129+00
Date Added: 2024-06-11T09:36:12.653362
License: Public Domain

The defendants claim that the by-law in question was adopted by a quorum of the directors of the American National Bank on the two grounds: first, that there were only ten directors of the bank previous to its conversion; and, second, that the ten directors who executed the organization certificate and took the oath, became, under the United States law, the directors of the national bank, exclusively of any others.
1. The non-acting directors were elected with the other directors by the bank when a state bank. No subsequent qualification was required of them. They never signified their non-acceptance. The other directors never elected others to fill their places at the board. For anything we can see, they might have acted as directors at any time before the conversion, if they had chosen. Where no qualification is required and there is no usage to control, we think a person who is elected a bank director may be presumed to accept unless he declines. This presumption may doubtless be rebutted, and perhaps simple non-action for five months would be sufficient to rebut it in some cases. But in this case the stockholders who authorized the conversion recognized the non-acting directors as directors at the time of the conversion. They name them, in the instrument authorizing the conversion, with the other ten as those "who arenow the directors of said American Bank."The instrument may be invalid in so far as it was intended to operate as a reappointment, but considered as a recognition of the status of the non-acting directors, it is none the less significant. We think we ought not to find for the benefit of the bank that there were only ten directors previous to its conversion because of the simple non-action of these two, when the stockholders authorizing the conversion recognized these two with the other ten at the time they authorized the same.
2. The National Currency Act, section 44, prescribes the mode in which state banks may become national banks. It provides that "in such case, the articles of association and the organization *Page 342 
certificate required by this act may be executed by a majorityof the directors of the bank or banking institution;" that "the certificate shall declare that the owners of two thirds of the capital stock have authorized the directors to make such certificate," c.; that "a majority of the directors, after executing said articles of association and organization certificate, shall have power to execute all other papers and to do whatever may be required to make its organization perfect and complete as a national association," c., and that "thedirectors aforesaid may be the directors of the association until others are elected or appointed in accordance with the provisions of this act."
We think the words, "the directors aforesaid," mean those who were the directors of the state bank, the design being that the directors of the state bank should be the directors of the national bank until an election or appointment by the national bank. They are "the directors," a majority of whom are authorized by the section to do certain acts. This seems to us to be the natural construction, and we think of no good reason for not adopting it. We cannot suppose it was designed that the bank should lose the services of a director or of its president, merely because he did not sign the articles of association and the organization certificate; for the omission may have been owing to a temporary sickness or absence. If the intention had been that those only of the directors of the state bank, who executed the articles and certificate, should be directors of the national bank, the intention would, we think, as it very easily could, have been more unmistakably expressed.
We also think that no oath was, by the act, required of thesead interim directors. Section 9 provides that "each director,when appointed or elected, shall take an oath," c. These directors were not elected or appointed for the interim, but held under the act by virtue of their former election. The 44th section says, "the directors aforesaid may be the directors of the association until others are elected or appointed in accordance with the provisions of this act." It adopts the directors of the state bank as the directors of the national bank for the time being. It makes no mention of any oath as being required of *Page 343 
them, and it might happen that some of the directors thus adopted, not being owners of the amount of stock required by the act, could not take the prescribed oath. And see Comptroller's Instructions, issued in 1864. page 9.
But even if the oath be necessary, it does not follow that a majority of only those who take the oath would constitute a quorum of the national board. On the contrary, we think it would still require, to make up such a quorum, a majority of "the directors aforesaid," i.e., of those who were the directors of the bank before its conversion.
We consequently still feel constrained to adhere to our former opinion, that the twelve directors elected by the state bank became, by force of the National Currency Act, the directors of the national bank, and that, therefore, the by-law in question, being adopted by only six of them, was not adopted by a majority or quorum of the board, and so did not become a valid by-law. We therefore render,
Judgment for the plaintiffs.