Bridgers v. First Nat. Bank

• Decision Date: 06 April 1910
• Citation: 67 S.E. 770,152 N.C. 293
• Parties: BRIDGERS v. FIRST NAT. BANK OF TARBORO et al.
• Court: North Carolina Supreme Court

67 S.E. 770

152 N.C. 293

BRIDGERS v. FIRST NAT. BANK OF TARBORO et al.

Supreme Court of North Carolina

April 6, 1910

Appeal from Superior Court, Edgecombe County; Cooke, Judge.

Action by John L. Bridgers against the First National Bank of Tarboro and others. From an order making perpetual an injunction against defendants, they appeal. Affirmed.

His honor continued the restraining order, and enjoined the defendants from putting the agreement hereinafter stated into effect, or taking any action thereunder. It was admitted that the First National Bank of Tarboro was duly organized under the national banking act, and was conducting a general banking business as authorized by law; that plaintiff is a stockholder in the bank; that the defendant Holderness is president, Johnson vice president, and Pennington cashier of the bank; that the bank was organized in the fall of 1906 and the above named have been its officers since its organization; that the stock in the bank is held by many persons, distributed among the business men of Tarboro; that its business has been well managed and the bank has been prosperous; that on March 2, 1909, certain stockholders of the bank, among them the defendants, anticipating that one Henry Clark Bridgers was attempting to acquire the control of the stock in the bank, entered into the following agreement:

"Memorandum of an agreement made this 2d day of March, 1909, between certain stockholders of the First National Bank of Tarboro hereinafter specifically named and designated, and George A. Holderness, C. A. Johnson, and Ed Pennington, trustees and attorneys with power:

"Where as, the First National Bank of Tarboro, a national bank organized under the banking laws of the United States of America, is engaged in conducting and carrying on the business of a national bank at Tarboro, N. C., and "Whereas, the management, direction and control of said institution has at all times to this date been satisfactory to the undersigned and in conformity with the laws of the United States and state of North Carolina, and

"Whereas, we, the following, represent and own the number of shares in bank, certificate number or numbers, which are set opposite our names, viz.: [reciting names, certificate numbers, and numbers of shares of the subscribers, amounting to 269 shares out of a total of 500.]

"Whereas, we and each of us desire to have for a period of (15) years from and after the date of this instrument the continuance of the conditions above set out, and to assure ourselves and each other that these conditions and this régime will not be disturbed or affected by the act of any one of us, except as hereinafter provided for; and

"Whereas, in order to effect our purpose here and guarantee each to the other good faith in the performance of the conditions and agreement hereof, we and each of us have agreed to transfer our respective shares of stock to Geo. A. Holderness, C. A. Johnson, and Ed Pennington, trustees named above, for the purposes and with the objects and intents herein declared:

"Now, therefore, this agreement, witnesseth: That we [reciting names, certificate numbers and numbers of shares held by each subscriber] do hereby sell, set over, assign and pledge our respective shares of stock as named and described above, to the said George A. Holderness, C. A. Johnson, and Ed Pennington, and their successors, on this special trust and for the uses following, to wit:

"First. The said trustees herein named are hereby given and clothed with the full power and authority during and for the term of fifteen (15) years next succeeding upon the execution and delivery of this agreement to vote said shares and certificates of stock at all stockholders' meetings, and for that purpose and to that end we and each of us do hereby appoint, name, and designate the said George Holderness, C. A. Johnson, and Ed Pennington, and their successors, our true and lawful attorneys for us and in our names during said period to vote said stock and fully represent us in all meetings, whether regular or called, of the stockholders, giving and granting unto our said attorneys full power and authority to do and perform all and other act and thing whatsoever requisite and necessary to be done in and about the premises, as fully to all intent and purposes as we might or could do if personally present.

"Second. In the event that any of the stockholders hereto signing shall desire to pledge his stock as collateral for a loan or to sell and assign the same absolutely, then and in that event we do hereby bind ourselves and agree to give and do hereby give to said trustees above named and appointed, and to their successors, the right, option, and privileges, if they shall so elect and desire, to sell for us and in our names and to transfer upon the books of the company the certificate or certificates of stock held by us to such purchaser or purchasers as they or their successors shall furnish or procure; provided, always, that the price by said trustees to be had and obtained for said certificate of stock shall be the book value of the same at the time said sale, pledge or transfer is attempted to be made, said trustees agreeing to take same at book value. For that purpose and to that end we do further appoint said trustees and their successors for a like period of fifteen (15) years our lawful attorneys, for us and in our names, to sell, transfer upon the books and deliver our said stock, receive for our use and benefit the price thereof, and to do all other acts and things in the premises that may be necessary to fully and legally effectuate and carry out the purpose hereof.

"Third. Contemporaneously with the signing, selling, and delivery of these presents the several shares of stock subscribed above and hereby transferred are to be assigned and transferred in blank, according to form on the back of each certificate or certificates, and delivered into the custody of said trustees at the time that the said stock is delivered to them, who shall execute and deliver to the persons transferring and surrendering the same receipts showing the serial number, certificate, and number of shares so transferred and delivered to them by each person.

"Fourth. If a vacancy shall occur during the term of (15) years herein fixed in the board or number of trustees herein named, either by death, resignation, or the removal from the state, of either one of the three named, then the trustee or trustees remaining shall have and they are hereby clothed with full power and authority to fill the vacancy or vacancies so caused by appointing in the stead and place of the trustees or trustee so dying, resigning, or removing the other trustees or trustee to succeed to the rights, powers, trusts, and responsibilities herein given, imposed, and declared in favor of the said Holderness, Johnson, and Pennington, and such successor or successors are hereby given like power with the original trustees herein named, and will hold the shares of stock hereby transferred in like plight and condition as do the three original trustees herein named.

"Fifth. That this agreement shall be binding and obligatory upon each and every of the subscribers hereto, and the said stock hereby undertaken to be transferred and delivered to the trustees shall remain in their custody and possession under the conditions and for the purpose herein declared for a period of (15) years from and after the date of this instrument; provided, nevertheless, that the said agreement may be earlier rescinded and made nugatory by the unanimous vote and agreement of the several signers thereof.

"In witness whereof, the above-named

stockholders have hereunder set their hands and affixed their several seals, this the day and year written above. [Signed under seal.]

"We do hereby accept the certificates of stock transferred to us upon the trusts, terms, and provisions set forth in the above paper writing.

Geo. A. Holderness,

'C. A. Johnson,

"Ed Pennington,

"Trustees and Attorneys in Fact."

It is further admitted that the trustees executed to each of the subscribers to said agreement a receipt or certificate in the following words: "Received of -- certificate No. --for shares of stock in the First National Bank of Tarboro, the same being assigned, transferred, and delivered to us and held by us, under and according to the terms and provisions of an agreement made the second day of March, 1909, between certain of the stockholders of said bank and the undersigned. This the -- of March, 1909." The plaintiff alleged that the "said agreement is in violation of his rights and the rights of the other stockholders, and is in law void and of no effect, in that it seeks, in advance of the meeting of the stockholders, to fix the control of the stock of the bank, so that no argument, reason, or persuasion on the part of the minority stockholders can or shall have any effect in any of the meetings of said stockholders," etc.

The defendants allege the following as the intent, purpose, and justification of said agreement: "(4) That the only object and purpose of the said paper writing were, first, as long as the stock represented in and by said paper writing remained the property of him who signed the agreement, to hold together enough of the stock to protect the bank and the stockholders thereof against injurious, menacing, and sinister design of the said H. C. Bridgers, and to assure the continued prosperity, welfare, and success of the institution; and, second, that whenever any owner of any share of said stock should desire to pledge the same as collateral for a loan, or to sell and assign the same absolutely, then to give to the trustees and attorneys named and appointed, and to their...