Cheairs v. Stollenwerck

Decision Date16 April 1936
Docket Number2 Div. 59
Citation232 Ala. 546,168 So. 589
PartiesCHEAIRS v. STOLLENWERCK.
CourtAlabama Supreme Court

Rehearing Denied June 11, 1936

Appeal from Circuit Court, Hale County; John Miller, Judge.

Action by N.F. Cheairs, as receiver for the First National Bank of Greensboro, against C.Y. Stollenwerck. From a judgment for defendant, plaintiff appeals.

Reversed and remanded.

W.R Withers, of Greensboro, and Keith & Wilkinson, of Selma, for appellant.

S.F Hobbs, of Selma, for appellee.

THOMAS Justice.

This is a suit, under the federal statute, by the receiver of the First National Bank of Greensboro, Ala., to enforce an assessment levied upon the stockholders of said bank by the Comptroller of the Currency for the United States against C.Y. Stollenwerck, a stockholder.

The assignments of error challenge the action of the trial court in refusing to give appellant's requested affirmative charges, certain parts of the oral charge to which exceptions were reserved, and in denying the motion for a new trial.

The verdict and judgment was for the defendant, and the receiver appeals.

The federal statute under which the assessment was made is as follows: "The stockholders of every national banking association shall be held individually responsible for all contracts, debts, and engagements of such association, each to the amount of his stock therein, at the par value thereof in addition to the amount invested in such stock. The stockholders in any national banking association who shall have transferred their shares or registered the transfer thereof within sixty days next before the date of the failure of such association to meet its obligations, or with knowledge of such impending failure, shall be liable to the same extent as if they had made no such transfer, to the extent that the subsequent transferee fails to meet such liability; but this provision shall not be construed to effect in any way any recourse which such shareholders might otherwise have against those in whose names such shares are registered at the time of such failure." United States Code Annotated, title 12, p. 112, § 64.

"The question as to the necessity of an assessment and of proceedings against the stockholders to enforce their personal liability, and whether the whole or a part, or if only a part how much, shall be collected, are referred to the judgment and discretion of the comptroller, and his determination is conclusive." U.S.C.A., title 12, § 64 note 41, p. 130; Casey, as Receiver, v. Galli, 94 U.S. 673, 24 L.Ed. 168; Germania National Bank of New Orleans v. Case, Receiver, 99 U.S. 628, 25 L.Ed. 448; Kennedy v. Gibson, 8 Wall. 498, 19 L.Ed. 476.

In the respects indicated, the decisions of the Supreme Court of the United States are binding on state courts, when construing and applying the federal statutes and the provisions of the Constitution of the United States. Handy v. Goodyear Tire & Rubber Co. et al., 230 Ala. 211, 160 So. 530; Merchants' Laclede Bank of St. Louis, Mo., v. Troy Grocery, 144 Ala. 605, 39 So. 476. That is, as to substantive rights under the federal statutes, the federal rule obtains, while the state law governs as to matters relating to practice and procedure administrative of the federal act. Illinois Cent. R. Co. v. Johnston, 205 Ala. 1, 5, 87 So. 866; Central Vermont Railway Company v. White, Adm'x, 238 U.S. 507, 35 S.Ct. 865, 59 L.Ed. 1433; Chesapeake & Ohio Railway Company v. De Atley, 241 U.S. 310, 36 S.Ct. 564, 60 L.Ed. 1016. The question of who is a shareholder in a national bank and subject to liability as such on the call of the Comptroller of the Currency, relates to substantive rights, and is not a matter of procedure. In such a determination the scintilla rule does not prevail. Louisville & N.R. Co. v. Parker, 223 Ala. 626, 138 So. 231; Illinois Cent. R. Co. v. Johnston, supra; Board of County Commissioners of County of Marion v. Clark, 94 U.S. 278, 24 L.Ed. 59.

It is established by the United States Supreme Court that one who holds himself out as the owner of shares of stock in a national bank, by allowing to appear on the books of the bank who is the registered owner, may be treated as a shareholder. Finn v. Brown, Receiver, 142 U.S. 56, 12 S.Ct. 136, 35 L.Ed. 936; Keyser, Receiver, v. Hitz, 133 U.S. 138, 10 S.Ct. 290, 33 L.Ed. 531; Turnbull v. Payson, 95 U.S. 418, 24 L.Ed. 437; see "Real and apparent owner," U.S.C.A., title 12, p. 114, § 64, note 2, and authorities cited.

It is likewise held that the actual owner of shares of stock may be held for an assessment, although his name does not appear upon the transfer books of the bank. Ohio Valley National Bank v. Hulitt, 204 U.S. 162, 27 S.Ct. 179, 51 L.Ed. 423, and authorities cited; U.S.C.A., title 12, § 64, note 2, p. 114; Rankin, Receiver, v. Fidelity Insurance, Trust & Safe-Deposit Company, 189 U.S. 242, 23 S.Ct. 553, 47 L.Ed. 792. This is the rule that has long prevailed in that jurisdiction. Davis v. Stevens (C.C.N.Y.1879) 7 Fed.Cas. p. 177, No. 3,653, 17 Blatchf. 259, opinion by Chief Justice Waite.

It follows, that one who is notified that shares of stock in a national bank have been transferred to his name, and takes no action to have the same transferred to the name of their true owner, cannot avoid liability for an assessment thereon, made by the comptroller to meet the debts of that bank after its insolvency. Kenyon v. Fowler 155 F. 107, 83 C.C.A. 567; Id., 215 U.S. 593, 30 S.Ct. 409, 54 L.Ed. 341. This rule has also been applied where a person receives dividends, and it has been held that "Where a person receives from a bank a dividend on stock which he denies owning, he should restore the dividend to the bank; he does not free himself from liability for it by giving his check on the bank for the sum to the alleged true owner." Finn v. Brown, Receiver, 142 U.S. 56, 12 S.Ct. 136, 35 L.Ed. 936; Keyser, Receiver, v. Hitz, 133 U.S. 138, 10 S.Ct. 290, 33 L.Ed. 531.

It has been declared by the Supreme Court of the United States that the name of an individual appearing as a shareholder on the stock books of a national bank is prima facie evidence of ownership, and, presumptively, the party so indicated is a stockholder entitled to participate in the affairs of the bank, and subject to liability as such. In an action against him as a stockholder he has the burden of rebutting the presumption of ownership. Finn v. Brown, Receiver, 142 U.S. 56, 12 S.Ct. 136, 35 L.Ed. 936; Keyser, Receiver, v. Hitz, 133 U.S. 138, 10 S.Ct. 290, 33 L.Ed. 531; Turnbull v. Payson, 95 U.S. 418, 24 L.Ed. 437; Webster v. Upton, Assignee in Bankruptcy, 91 U.S. 65, 23 L.Ed. 384; Walsh et al. v. State ex rel. Cook et al., 199 Ala. 123, 74 So. 45, 2 A.L.R. 551.

In the recent case of Forrest v. Jack, Receiver, 294 U.S. 158, 55 S.Ct. 370, 371, 79 L.Ed. 829, 96 A.L.R. 1457, 1460, 1461, the foregoing rule of liability, contained in the earlier decisions, is adhered to, and Mr. Justice Butler, speaking for that court, said: "The liability of stockholders is based upon the statute, 12 U.S.C.A. § 64. McClaine v. Rankin, 197 U.S. 154, 161, 25 S.Ct. 410, 49 L.Ed. 702, 705, 3 Ann.Cas. 500; Christopher v. Norvell, 201 U.S. 216, 225, 26 S.Ct. 502, 50 L.Ed. 732, 736, 5 Ann.Cas. 740. *** As a general rule, the person in whose name the stock stands on the books of the bank is liable, Whitney v. Butler, 118 U.S. 655, 660, 7 S.Ct. 61, 30 L.Ed. 266, 268; Richmond v. Irons, 121 U.S. 27, 58, 7 S.Ct. 788, 30 L.Ed. 864, 874, *** but the actual owner may be held although the stock has not been registered in his name. Early v. Richardson, 280 U.S. 496, 499, 50 S.Ct. 176, 74 L.Ed. 575, 577, 69 A.L.R. 658; Ohio Valley Nat. Bank v. Hulitt, 204 U.S. 162, 168, 27 S.Ct. 179, 51 L.Ed. 423, 427. *** The liability does not altogether cease on the death of the owner but, as limited and defined by section 66 [U.S.C.A., title 12], attaches to his estate. Matteson v. Dent, 176 U.S. 521, 524, 20 S.Ct. 419, 44 L.Ed. 571, 573; Zimmerman v. Carpenter (C.C.) 84 F. 747 751. *** The fiduciaries are exempt but the property belonging to the estate is liable as would be the deceased if living. No cause of action arises until the assessment is made by the Comptroller and, so far as concerns the need and amount, his findings are conclusive. Kennedy v. Gibson, 8 Wall. 498, 505, 19 L.Ed. 476, 478; *** Rankin v. Barton, 199 U.S. 228, 232, 26 S.Ct. 29, 50 L.Ed. 163, 166. He acts under federal authority and in respect of determinations, orders, and assessments may not be trammeled, controlled, or prevented by state laws. Rankin v. Barton, 199 U.S. 228, 232, 26 S.Ct. 29, 50 L.Ed. 163, 166; Christopher v. Norvell, 201 U.S. 216, 225, 26 S.Ct. 502, 50 L.Ed. 732, 736, 5 Ann.Cas. 740. *** In the absence of federal enactments relating to procedure for enforcement of the liability imposed by section 66, collection is to be made in accordance with state laws governing claims against estates of deceased persons at least to the extent that such laws are not inconsistent with enforcement of the liability imposed by national authority. McClaine v. Rankin, 197 U.S. 154, 158, 25 S.Ct. 410, 49 L.Ed. 702, 704, 3 Ann.Cas. 500; *** Williams v. Cobb, 242 U.S. 307, 37 S.Ct. 115, 61 L.Ed. 325."

Many federal decisions are collected in the notes to 2 A.L.R. page 551, reporting our decision of Walsh et al. v. State ex rel. Cook et al., 199 Ala. 123, 74 So. 45.

The trial court refused the plaintiff's written charges, declaring the burden of proof under the rule and evidence to be adjudged by the federal rule. And to this action of the trial court we will advert.

The original stock books containing certificates of stock, stub receipts, and dividend check were certified to this court and are in evidence. They show ownership of the shares in question in...

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