111 U.S. 156 (1884), Moores v. Citizens' Nat. Bank of Piqua, Ohio

Citation:111 U.S. 156, 4 S.Ct. 345, 28 L.Ed. 385
Case Date:March 31, 1884
Court:United States Supreme Court

Page 156

111 U.S. 156 (1884)

4 S.Ct. 345, 28 L.Ed. 385




United States Supreme Court.

March 31, 1884

In Error to the Circuit Court of the United States for the Southern District of Ohio.


[4 S.Ct. 346] E. W. Kittredge and J. W. Warrington, for plaintiff in error.

Wm. M. Ramsey and E. M. Johnston, for defendant in error.



This is an action against a national bank to recover the value of a certificate of stock therein, which the bank had refused to recognize as valid. The amended petition and other pleadings are stated in the report of the case at a former stage, at which this court, for an erroneous ruling of the circuit court on a question of the statute of limitations, reversed a judgment for the defendant, and ordered a new trial. 104 U.S. 625. A recital of the pleadings is unnecessary to the understanding of the case as now presented. The undisputed facts, as appearing by the admissions in the petition, by the evidence introduced by the plaintiff before the jury at the new trial, and by the defendant's admissions at that trial, were as follows:

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The defendant was organized in 1864, under the act of Congress on June 3, 1864, c. 106, the twelfth section of which provides that the capital stock shall be 'transferable on the books of the association in such manner as may be prescribed by the by-laws or articles of association.' 13 St. 99, 102. The defendant's by-laws relating to transfers of stock were as follows:

'Sec. 15. The stock of this bank shall be assignable only on the books of the bank, subject to the restrictions and provisions of the act, and a transfer book shall be kept, in which all assignments and transfers of stock shall be made. No transfer of the stock of this association shall be made, without the consent of the board of directors, by any stockholder who shall be liable to the association, either as principal debtor or otherwise; and certificate of stock shall contain upon them notice of this provision. Transfers of stock shall not be suspended preparatory to a declaration of dividends; and, except in cases of agreement to the contrary, expressed in the assignment, dividends shall be paid to the stockholder in whose name the stock shall stand on the day on which the dividends are declared.

'Sec. 16. Certificates of stock signed by the president and cashier may be issued to stockholders, and the certificate shall state upon the face thereof that the stock is transferable only upon the books of the bank; and when stock is transferred, the certificates thereof shall be returned to the bank and canceled, and new certificates issued.'

The defendant's capital stock was 1,000 shares of $100 each, the whole of which was in fact, and was alleged in the petition to have been, taken and paid for, and certificates therefor issued to the stockholders, at the time of its organization in 1864. The president and cashier of the bank were charged with the keeping of its transfer-books and the issuing of certificates of stock, and the books of the bank were always open to the inspection of the directions. On July 15, 1867, G. Volney Dorsey was president and Robert B. Moores was cashier of the bank, and said Moores, who had previously owned 275 shares of the

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stock, appeared on the books of the bank to be still the owner thereof. He and John B. C. Moores, the plaintiff's husband, were sons of William B. Moores. On that day the plaintiff agreed to lend $9,100 of her own money to Robert and William for use in their private business; they agreed to give her, as security for its repayment, a certificate of 91 shares, which Robert represented to her that he owned, and also the contract of guaranty hereinafter set forth; and Robert sent to the plaintiff's husband, as her agent, the following letter and certificate:


'PIQUA, Q., July 15, 1867.

'JOHN: Herewith I hand you the stock transferred to Carrie. I don't know what day I will be down, and you can keep the contract there, and I will sign it the first time I am down. I will have to take a receipt for the stock from father, to file with my papers, to show where the stock is gone to. All well; may be down any day.




'No. 56. STATE OF OHIO. 91 Shares.

'This is to certify that Mrs. Carrie A. Moores is entitiled to ninety-one shares of one hundred dollars each of the capital stock of the Citizens' National Bank of Piqua, transferable only on the books of the bank, in person or by attorney, on the surrender of this certificate.

'Piqua, O., July 15, 1867.


'ROB'T B. MOORES, Cashier.

G. VOLNEY DORSEY, President.'

This certificate was in the usual form of printed certificates used by the bank, and bore the genuine seal of the corporation, and the genuine signatures of the president and cashier; and the whole certificate, except the printed part and the president's signature, was in the cashier's handwriting, filled up by him in one of two or three blanks signed by the president and left with him to be used if needed in the president's absence.

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Upon receiving the letter and certificate, the plaintiff paid the money to Robert B. Moores; and on July 18th he and William signed and sent to her the following contract:

'For value received, namely, the sum of ninety-one hundred dollars, Robert B. Moores has assigned and transferred to Caroline A. Moores ninety-one shares of stock of the Citizens' National Bank of Piqua, Ohio.

'Now it is agreed that the said Caroline A. Moores shall, upon demand by Robert B. Moores, or his assigns, reassign to said R. B. Moores the said stock for the same amount. And it is also agreed that, whenever the said Caroline A. Moores shall require it, the said Robert B. Moores shall purchase said stock at the amount aforesaid, and pay the same to her in cash. And in the mean time it is agreed, and the said Robert B. Moores and William B. Moores do hereby guaranty and assure to said Caroline A. Moores an annual dividend upon said stock of not less than ten per cent. upon the par value of said stock, namely, ninety-one hundred dollars, which guaranty shall be performed and fulfilled at the end of each year herefrom, or at the time of each dividend declared, if such dividend shall be declared oftener than once a year, and all deficiencies in said dividends shall be made good at the time of such repurchase or transfer to R. B. Moores.

'In witness whereof, the said Caroline A. Moores and J. B. C. Moores, her husband, and Robert B. Moores and William B. Moores, hereunto set their hands on this 15th day of July, 1867.



'robt. b. moores.

'w. b. moores.'

Robert B. Moores surrendered no certificate to the bank, and made no transfer to the plaintiff on its books. The plaintiff had no other knowledge of the rule requiring the surrender of an old certificate of stock before the issue of a new one, or of any fraud on the part of Robert, than was obtained [4 S.Ct. 348] by her reading and possession of the certificate. The value of the stock of the bank at that time was 90 per cent. of its par value. Robert B. Moores was insolvent, and the money lent to him by the plaintiff was never repaid.

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The plaintiff put in evidence two letters to her husband from Dorsey, the president of the bank,--one dated June 25, 1872, stating that the writer had just learned that he held a certificate of stock purporting to be issued by the bank, and asking for its number, date, and amount; and the other dated July 5, 1872, the body of which was as follows: 'There is no such certificate as mentioned in yours of June 27th on our books. No. 56 is marked on the stub in our certificate book 'destroyed,' in R. B. Moores' handwriting. Your wife's name was never entered among our stockholders, and the certificate is a fraud. We never heard of this certificate until you mentioned it to Dr. Parker, who first informed me of it.'

Robert B. Moores and Dorsey, being called as witnesses for the defendant, testified that it had no interest in the transaction of July 15, 1867. Moores testified that at that date he had pledged to Jason Evans and other persons all the stock he had previously owned, and did not own any stock; and that he issued the certificate to the plaintiff without any autority from the bank, or any knowledge of the other officers. Dorsey testified that he had no knowledge of the issue of the certificate until June 25, 1872, and that the bank never paid any dividends upon it; and he produced the certificate book of the bank, which showed the stub of a certificate, in its regular order, corresponding in number with that produced by the plaintiff, and having the word 'destroyed' upon it in the handwriting of Robert B. Moores.

The plaintiff offered in evidence, and the court declined to admit, the record of a meeting of the board of directors of the bank, on August 9, 1869, containing the following entry: 'On motion, the following resolution was adopted and ordered to be placed upon the minutes: Whereas, Robert B. Moores, who was the owner of 275 shares of the capital stock of this bank,--evidenced by certificate No. forty-seven (47) for fifty shares, dated May 2, 1867; certificate No. forty-eight (48) for fifty shares, dated May 2, 1867; certificate No. forty-nine (49) for sixty-five shares, dated May 2, 1867; certificate No. 53(53) for

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seventy shares, dated June 11, 1867; and certificate No. fifty-four (54) for forty shares, dated June 11, 1867--became indebted to this bank in the sum of thirty-seven thousand two hundred and forty-seven 29-100 dollars, ($37,247.29,) and did, on the sixteenth day of January, 1868, transfer one hundred and eighty-five shares of said stock, and on the fifteenth day of...

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