Court Opinion

ID: 4004669
Source: CourtListenerOpinion
Date Created: 2016-07-06 11:05:50.992372+00
Date Added: 2024-06-11T07:44:11.304691
License: Public Domain

I agree with the conclusion of the court, but am inclined to the opinion that it should be placed upon the insanity of Barnes at the time of the consolidation of the banks rather than the fact that he acquired his stock in the Fairmont Trust Company (one of the constituent banks) before the passage of the federal act authorizing the merger. The statute is specific in its requirements of due process in effecting a legal consolidation. It provides that any two or more national banking associations located within the same county, city, town, or village may, with the approval of the Comptroller of the Currency, consolidate into one association under the charter *Page 155 
of either existing banks, on such terms and conditions as may be lawfully agreed upon by a majority of the board of directors of each association proposing to consolidate, and be ratified and confirmed by the affirmative vote of the shareholders of each such association owning at least two-thirds of its capital stock outstanding, at a meeting to be held on the call of the directors after publishing notice of the time, place, and object of the meeting for four consecutive weeks in some newspaper published in the place where the said association is located, and if no newspaper is published in the place, then in a paper published nearest thereto, and after sending such notice to each shareholder of record by registered mail at least ten days prior to said meeting; and that when such consolidation shall have been effected and approved by the comptroller any shareholder of either of the associations so consolidated who has not voted for such consolidation may give notice to the directors of the association in which he is interested within twenty days from the date of the certificate of approval of the comptroller that he dissents from the plan of consolidation as adopted and approved, whereupon he shall be entitled to receive the value of the shares so held by him. The enumerated steps in the process of consolidation must, therefore, be observed in order to bind non-consenting stockholders. Although a judgment against an insane person, before an adjudication of insanity, is, generally, voidable and not void, I do not believe that the interests of Barnes who was, according to the agreed evidence, a lunatic, confined in an insane asylum to the knowledge of the officials of the merging banks at the time of the consolidation, could have been legally affected thereby. The stockholders of the constituent banks are bound on the basis of consent or acquiescence after notice in compliance with the act. The statute was considered and applied in Littrell v. Craig, 1 F. Supp. 491, an action against a non-consenting stockholder who had received notice in compliance with the act. In holding the stockholder liable for stock assessments by the receiver of the consolidated bank, the court said: "Defendant knew when he received the notice *Page 156 
of the meeting of the stockholders of the Fayette Title  Trust Company (in which he was a stockholder) to be held October 28, 1931, that it was proposed to take action on a contract for the consolidation of the trust company and the bank. He was hence chargeable with notice of the action taken at that meeting, which included the approval by the stockholders of the agreement aforesaid, the authorized issuance of stock in the consolidated bank to the defendant, and the arrangement for the payment of the cash consideration of $150,000 by the building company. He also was visited with knowledge of the law that, if he desired to dissent from such consolidation, he had a right to have his stock appraised and to receive the price fixed therefor." As the statute contemplates the consent or acquiescence, after notice, of the stockholders, I see no theory upon which one notoriously incapable of consent or acquiescence could be affected by the consolidation except through a legally selected committee. The statute affords each stockholder the privilege, after notice, of either (1) consenting to the merger, or (2) demanding the value of his stock.