Court Opinion

ID: 8840427
Source: CourtListenerOpinion
Date Created: 2022-11-26 16:38:56.420512+00
Date Added: 2024-06-11T17:05:11.339010
License: Public Domain

Nelson, J.
The defendants do not attempt to escape liability for the
reason that Gardner purchased shares of stock through misrepresentation of the vendor or his agents; nor is there any suggestion by the receiver in the pleadings, or any proof, that they are liable because the testator was a subscriber to the increase of the capital stock of the bank, although his name appears on the list of subscribers for 100 shares. The suit is brought to recover an assessment made by the comptroller upon the defendants’ testator, as an owner of the original stock issued to subscribers when the bank was first organized, and in order to recover the plaintiff must prove that the testator was the owner of the stock which is entered in the bank-books in his name. The presumption is, on the stipulated facts, as his name is registered in the stock book as a stockholder to the amount of 215 shares, that he was the owner thereof, particularly when he held certificates for such stock, duly issued and signed by the proper-bank officers; but these facts are not conclusive of ownership. Such prima facie case throws upon the defendants the onus of rebutting the ■presumption.
It is conceded that 115 shares of the capital stock were owned by Gardner, but it is claimed that they are not liable for an assessment upon .the 100 shares registered in his name, and for which a certificate was issued .January 4, 1887. The manner in which this certificate for 100 shares *845issued appears in the stipulated facts, and the question presented is, did the testator purchase this stock, or has he consented to the transfer of the stock registered in his name? A purchase of stock in an organized bank from one who is a stockholder required the mutual assent of the vendor and vendee to the contract. If a lack of mutual consent is shown, and there is an absence of contract between the parties that the testator should purchase the 100 shares of old stock, and thus become liable as a stockholder, he was not a stockholder or owner, within the meaning of the national bank laws, 1 imposing individual liability, although'the stock was transferred and registered in his name. The criterion of liability is whether any act has been done by which the corporation was forced to receive the testator as a stockholder. In the face of the entry and transfer of the slock and issue of a certificate, the defendants may introduce evidence to show that the entry is false, and the certificate falsely issued. The testimony shows that the bank was in a sickly condition, and the transfer from the president and one of the directors of their stock was unauthorized. The sale or transfer of stock of a national bank is not governed by different rules from those which apply to other incorporated companies. Proof must be made of the assent of the parties thereto. They must have assented to Iho transfer, as shown by the bank-books, to make the testator a stockholder, and subject to the onerous liability which the national bank act imposes on stockholders. The proof is clear that the defendants’ testator subscribed for and sent his money to the bank to pay for 100 shares of the proposed increase of the capital stock of the bank, and the certificate sent was old stock transferred to him without his knowledge or consent. Such a transaction cannot be upheld. A transfer of stock under such circumstances, without the knowledge of the person to whom it is transferred, does not make him liable as a shareholder. He must be held out to the public as a shareholder, with his knowledge of the fact. It is claimed that this defense cannot be set up on a suit brought by the receiver to recover an assessment made, in order that the creditors of the bank may obtain satisfaction; and it is said that creditors of the bank would suffer by such a rule. Injurious consequences to creditors, which may happen after such an authorized transfer of stock, cannot make the defendants responsible on a contract which their testator never made and had nothing to do with. There can be no estoppel unless defendants’ testator assented to the transió r of the stock. He had no knowledge that he was registered on the stock-book as the owner of 100 shares of the original stock of the bank, which had been transferred to him by Overstoltz, the president, and Rosenthal, a director; and there were no circumstances disclosed in the transaction between him and the bank, when he subscribed for 100 shares of the increase to the stock and paid for it, that put him upon an inquiry to ascertain whether the certificate issued represented the stock he subscribed for or old stock fraudulently transferred. He had purchased no stock from any stockholder, but had responded favorably to *846the circular sent him for an increase of the capital stock of the hank, and had paid for 100 shares of the new stock which he was anxious to get. A certificate dated about the time the president of the bank informed him the new increase stock would probably be issued was sent, properly signed, and there was nothing upon its face to indicate it was not the new' stock subscribed for. A dividend w'as declared and paid upon the original stock June 7, 1887, and it is urged that the testator, having received it, is estopped from1 now asserting that he did not own these shares. . While a dividend might, if the person in w'hose name the stock is registered receive it, tend to establish ownership, still receipt of a dividend is not conclusive proof that he is- a stockholder within the law imposing individual liability. The evidence taken, in addition to the facts stipulated, does not change the status of the case.
In the case of Keyser v. Hitz, 133 U. S. 139, 10 Sup. Ct. Rep. 290, the court holds that a transfer of stock in a bank to a person without his knowledge or consent does not, of itself, impose upon the transferee the liability attached by law to the position of shareholder in the association; but if the transferee does any act approving or acquiescing in the transfer, or in any way ratifies it, or accepts any benefit arising from the ownership of such stock, he becomes liable to be treated as a shareholder, with such responsibilities as the law imposes in such cases. Gardner did not know, when a dividend was paid to him upon 215 shares, that such an amount of old stock was entered in his name, for he never had purchased or authorized ,the transfer of the 100 shares which appear in . the books as transferred to him. He therefore never accepted any benefit arising from the ownership of such stock. It is said that Gardner waived his right to complain by not returning the dividend, or offering to return it, and cannot defeat the assessment upon the 100 shares. This failure to tender back the dividend does not, under the circumstances, prevent the defense urged.
After full consideration, I am of the opinion that the defendants must pay the assessment of 100 per cent, of the par value upon 115 shares of stock only, and judgment must be entered for $11,500, with interest at 7 per cent, from June 22, 1889; and it is so ordered.

 Rev. St. U. S. § 5151.