Court Opinion

ID: 6353921
Source: CourtListenerOpinion
Date Created: 2022-06-24 18:31:24.39785+00
Date Added: 2024-06-11T15:49:37.363690
License: Public Domain

Per Curiam:
The appellant became the purchaser of forty-five shares of stock in a private bank, for which he paid the sum of $5,085. The bank was insolvent at the time, and upon a bill filed for the adjustment of the liability of the partners he has a decree against him for $6,156.13, which has been reduced by a credit to $2,781.13. His principal complaint now is that in this adjustment he was not allowed a credit for the $5,085 which he paid for his stock. This claim is based upon the master’s finding that when he made this payment the capital of the other partners was exhausted, and the partnership then liable to a deficiency of $23,583.67, and that the liabilities of the old firm to the extent of $87,050.29 were settled by the assets of the new firm.
This, as before observed, was a private bank. It follows that the stockholders were partners in a joint-stock company. When the appellant bought his stock, the money paid therefor wont to the vendor of the stock. Personally, he would not be responsible for the debts of the old firm. Appellant contends that when he bought his stock he was in effect putting so much money as capital in a new firm, in which neither of the other stockholders had anything whatever; and lienee that, in an account between the stockholders as partners, he must be allowed credit for $5,085 as so much advanced.
The fallacy of this reasoning consists in the fact that by the purchase of the shares he did not put any money into the concern. The purchase money went to the person from whom he bought the shares. The capital of a bank is not increased when one shareholder sells his stock to another. Nor does it alter the case that the shares were bought from the bank. The latter had merely purchased them from withdrawing stockholders, *572and the appellant stands in precisely the position he would have occupied had he bought them direct from such stockholders. The agency of the bank as an intermediate party does not make any difference. There was no increase of shares, nor was there any increase of the capital. The appellant was unfortunate in paying his money for worthless stock. This, however, gave him no equity over the other stockholders. It is true, he was not personally liable for the old debts of the firm, and no attempt was made to charge him for such in this proceeding.
The decree is affirmed, and the appeal dismissed, at the costs of the appellant.