Citizens and Miners Savings Bank and Trust Co. v. Gillespie

• Decision Date: 21 March 1887
• Docket Number: 30
• Citation: 9 A. 73,115 Pa. 564
• Parties: Citizens and Miners Savings Bank and Trust Co. to use v. Gillespie
• Court: Pennsylvania Supreme Court

9 A. 73

115 Pa. 564

Citizens and Miners Savings Bank and Trust Co. to use v. Gillespie

No. 30

Supreme Court of Pennsylvania

March 21, 1887

Argued February 22, 1887

ERROR to the Court of Common Pleas of Lackawanna county: Of January Term 1887, No. 30.

Assumpsit by The Citizens' and Miners' Savings Bank and Trust Co. to the use of W. D. Kennedy and F. B. Silkman, assignees for the benefit of creditors of said bank, against James W Gillespie, to recover the balance due on a subscription to the stock of said bank. Plea, non-assumpsit, payment set-off with leave.

On the trial, before ARCHBALD, J., the following facts appeared:

The Citizens' and Miners' Savings Bank and Trust Company was incorporated by Act of Assembly, approved April 13th 1872.

It was organized April 11th, 1873, and went into successful operation.

Stock was subscribed for by John B. Gillespie, who paid fifty per cent. upon it as called for by the directors, but no certificate was ever delivered to him, although one was made out and signed by the officers of the bank. It remained in the certificate book.

Thirty shares of this stock were transferred to James W. Gillespie the defendant, who, upon receiving them, signed a subscription, as follows:

"We, the undersigned, do hereby subscribe for the amount set opposite our respective names of the capital stock of the Citizens' and Miners' Savings Bank and Trust Company, incorporated by an Act of the Legislature of the state of Pennsylvania, approved April 13th, 1872. We do hereby agree to pay the amount subscribed at such times and in such manner as the Board of Directors of said corporation may from time to time order and direct. Providence, Pennsylvania, Saturday, April 12th, 1873."

Signed, among others, James W. Gillespie, $3,000.

The certificate for this stock was issued and delivered to the defendant December 3d, 1873.

Semi-annual dividends were declared and received by the defendant up to February 1st, 1878, which amounted to fortyfour per cent. of the money paid upon the stock.

On April 17th, 1879, the bank became embarrassed and made a general assignment of all its estate, assets and effects to W. D. Kennedy and H. Roberts, which was duly recorded. H. Roberts resigned the trust and F. B. Silkman was appointed assignee in his place by the court. The assignees gave bonds which were approved by the court, and entered upon the duties of their trust.

This action was brought December 6th, 1882.

During the trial the plaintiff offered in evidence a citation to W. D. Kennedy and F. B. Silkman, setting forth, among other things, that they had neglected to collect the unpaid subscription to the capital stock of the bank, asking for their removal on that ground.

Petition for citation was filed January 14th, 1882, upon which citation was issued the 27th of January, 1882. Answer of W. D. Kennedy and F. B. Silkman was filed February 6th, 1882, setting forth, among other things, that the question whether or not there should be an assessment for the unpaid subscription to the capital stock of said bank has been submitted to the court and still remains undecided, that they at all times heretofore have been and now are desirous to follow the directions of the court in this matter.

In connection with that, the order of HANDLEY, P.J., made in chambers, during vacation August 7th, 1882: "On consideration of the petition of the assignees of said bank, said assignees are authorized and directed to collect the unpaid subscription to the capital stock of said bank, and they are authorized to receive in payment of the unpaid subscription any just and legal claims against the bank." (Signed) JOHN HANDLEY, President Judge.

Objected to by defendant as irrelevant and immaterial. Objection sustained, and a bill of exceptions sealed for the plaintiff. (Twelfth assignment of error.)

The defendant's counsel against the objection of plaintiff's counsel was permitted to interrogate Mr. Kennedy, the witness on the stand, as to the financial responsibility of one Henry O. Silkman, the allegation being that Silkman was a stockholder to the amount of $20,000, and that if his subscription were good the whole amount of the unpaid stock would not be needed. There was no evidence that Silkman was a stockholder to the extent of over $5,000. The witness was not very clear as to Silkman's responsibility. (Ninth assignment of error.)

The court charged the jury, inter alia, as follows: [The main questions at issue, to wit, whether the defendant was a stockholder who had subscribed for capital stock of the bank, and whether this balance of unpaid stock is fully necessary to meet the liabilities of the bank, are both denied by the defendant. These raise the issues then upon which you are to pass, and according as you determine these so your verdict will be for the plaintiffs or the defendant, as I shall explain to you.] (First assignment of error.)

[The first question then for you to determine is whether the defendant is a subscriber, or was a subscriber at the time of the failure of this bank to the capital stock of the bank; now, this is not simply whether he held stock in the bank, because of that there is no dispute; at the time of the failure of the bank, he held thirty shares, and still holds them, upon which one half, fifty per cent., had been paid; but the question is whether he subscribed for this stock.] (Second assignment of error.)

The minutes of the organization of this bank in 1873 have been put in evidence before you. By the recitals contained in them, it appears that the corporators, or a majority of them, having met, subscriptions were made to the capital stock of the bank, to the extent of $125,000. While this may not be sufficient evidence to hold the parties who are recited in these minutes to a subscription, if they were contesting their position as original subscribers, still, under the evidence as it has been presented to you, I must hold, and so instruct you, that the original subscribers to the stock of the bank were the parties who are named in these minutes.

This, then, excludes the defendant from being held as an original subscriber. His name is not recited there, and he does not appear therefore to have been one of the parties who subscribed to the original stock of the bank.

The method in which he actually acquired his stock is disclosed to you by the evidence, and there appears to be no particular dispute in regard to this.

One of the parties who subscribed to this $125,000 of original stock was the brother of the defendant, Mr. John B. Gillespie. He subscribed for 100 shares or, at par value of $100, $10,000 of this $125,000, and subsequently he transferred of this 100 shares 30 shares to the defendant. This transfer was made about the 2d of December, 1873, as I remember the evidence, and at that time Mr. John B. Gillespie marked upon the certificate, which had been made out to him for his original subscription, an assignment of 30 shares covered by that original subscription to the defendant, and upon the certificate back, which has been presented to you here, a regular transfer of 30 shares of that 100 was made to the defendant, and a stock certificate issued to him for it.

[Now then, if the case stopped there, the defendant would be virtually a transferee of stock, as it is called, that is, a person to whom, either immediately or through other intervening parties, stock has been transferred from a person who originally subscribed, and a simple transferee is not liable to the corporation for any balance that might be unpaid upon it as a subscription.] (Third assignment of error.) But at the time of receiving this certificate for 30 shares of stock, the defendant was called upon to sign a book, which has been put in evidence here, and in compliance with that requirement of the bank he did sign that book.

He signed his name under the following head: "We, the undersigned, do hereby subscribe for the amount set opposite our respective names of the capital stock of the Citizens' and Miners' Savings Bank and Trust Company, incorporated by an Act of the legislature of the state of Pennsylvania, approved April 13th, 1872, and we do hereby agree to pay the amounts subscribed at such times, and in such manner, as the board of directors of said corporation may from time to time order and direct. Providence, Pa., Saturday, April 12th, 1873."

Then follows along a list of names with the amounts set opposite them in a column arranged for that purpose, and, among others, the name of the defendant, James W. Gillespie, with the figures 3,000 opposite his name.

It is alleged on the part of the defendant, that this book was signed by all parties to whom stock was transferred, and he says that this was done simply for the purpose of having a complete record and list of the stock as it was transferred, and of the stockholders to whom it was transferred.

But in terms as it stands before us, that is not the purport of this writing, and there is no sufficient evidence in the case, in my opinion, to change this from its natural effect, or to give it any other effect than such as would be drawn from it as it stands.

The question then is, what is the purport of this writing subscribed by the defendant?

[Now, as I have already said to you, gentlemen, a person is not liable for unpaid subscriptions to the capital stock of a bank, unless he originally participated in the organization of the bank, and was one who originally subscribed to the capital of the bank, and that the person to whom stock was simply transferred was not, as a transferee, liable to the bank.] (Fourth assignment of error.)

That is, however, subject to this qualification, that if a party to whom stock has been transferred, upon...