Brodrick v. Brown
| Decision Date | 22 July 1895 |
| Docket Number | 644. |
| Citation | 69 F. 497 |
| Court | U.S. District Court — Southern District of California |
| Parties | BRODRICK v. BROWN. |
Curtis Oster & Curtis, for plaintiff.
Rolfe & Rolfe, for defendant.
Plaintiff as receiver of the First National Bank of San Bernardino brings this action to recover of the defendant on three promissory notes, each payable, on demand, to First National Bank of San Bernardino, bearing interest at the rate of 10 per cent. per annum,-- one for $3,000, another for $5,000, and another for $7,000, bearing dates, respectively, March 17, 1892, May 18, 1893, and July 9, 1894. There is no denial of the making and delivery of the notes. The answer sets up, however, by way of counterclaim, that on or about the 10th day of July, 1893, defendant loaned to said bank the sum of $20,500, and that no part of same has been paid. The only issue between the parties arises on this answer, plaintiff insisting that the money therein mentioned was advanced by the defendant to said bank, not as a loan, but as a contribution, voluntarily made, for the betterment of the stock, to enable said bank to resume business.
On the trial of the case the following facts were made to appear by stipulation of the parties: That said bank was created and organized under an act of congress known as the 'National Bank Act,' with a capital stock of $100,000, divided into 1,000 shares, of the par value of $100 each, and that defendant at all times owned 410 of these shares. That on June 23, 1893, for lack of funds to pay depositors in the due course of business, said bank closed its doors, and immediately thereafter notified the comptroller of the currency of the United States of its condition; and that thereafter, on or about the . . . day of June, 1893, said bank was by the said comptroller of the currency of the United States placed in charge of Bank Examiner J. B. Lazier, who remained in charge and control of said bank until it resumed business on the 21st day of July, 1893. That during the time said Lazier was in charge of said bank, he informed the directors thereof that, before the said bank would be permitted by the said comptroller of the currency of the United States to resume business, the sum of $50,000 would have to be raised and placed in said bank; and that, acting on said information, and in order to enable said bank to resume business, said stockholders thereof severally raised and between the 15th and 21st days of July, 1893, placed in the hands of said Lazier, for the use of said bank, sums of money, equal to 50 per cent. of the par value of the capital stock owned by them respectively; and thereupon said Lazier caused to be entered on page 237 of the general cash book of said bank the following entry:
'The fifty thousand dollars voluntary assessment which has been paid in by the stockholders remains undistributed in the bank for one year, after which time any losses in present valuations of assets will be charged against same, and balance subject to stockholders; the said fifty thousand dollars having been paid as follows: 50 per cent. on capital stock by--
| Brown, Joseph ................... | $20,500 |
| " Mrs. " ...................... | 250 |
| Barton, Mary .................... | 1,500 |
| Brinkmeyer, H.................... | 2,000 |
| Crandall, W. N................... | 1,000 |
| " L. D......................... | 1,000 |
| Curtis, W. J..................... | 1,500 |
| " Frances ..................... | 500 |
| " Lucy M ...................... | 500 |
| Flanders, J...................... | 2,000 |
| Garner, M. B..................... | 5,000 |
| Hall, J. W....................... | 4,000 |
| James, John M.................... | 1,500 |
| " Mrs. D. C.................... | 500 |
| Johnson, F. M.................... | 500 |
| Kohl, O. H....................... | 5,000 |
| " F............................ | 500 |
| Kohl, L.......................... | 500 |
| Rolfe & Freeman ................. | 250 |
| Vail, A. H....................... | 500 |
| Warner, S. M..................... | 500 |
| " F. E......................... | 500 |
| -------- | |
| Amt. carried to surplus #2 .. | $50,000" |
-- That on the teller book of said bank, No. 13, under date of July 15, 1893, is the following entry: 'Stockholders' voluntary assessment, $50,000;" and that on the general ledger of said bank, on page 5, is the following entry: 'Shareholders' voluntary assessment, to surplus #2, $50,000. ' That on October 10, 1893, December 28, 1893, March 9, 1894, May 14, 1894, July 28, 1894, and October 12 1894, reports of the condition of said bank, verified by the oath of O. H. Kohl, its cashier, and signed by three of its directors, were made to the said comptroller of the currency, in each of which reports the said $50,000 is entered as follows: 'Surplus #2, $50,000;' and that each and all of said reports, except the one made on the said 14th day of May, 1894, were signed by Joseph Brown, the defendant herein. That on the 21st day of July, 1893, said bank (having obtained permission from the comptroller of the currency of the United States to resume business, the said Lazier having turned over and delivered to the officers of said bank all of its assets, including said sum of $50,000) opened its doors and resumed business, and from that time until the 8th day of November, 1894, continued to transact the business of banking, as it had done prior to the closing of its doors on the said 23d day...
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