Columbia Nat Bank of Tacoma v. Mathews

• Decision Date: 07 February 1898
• Docket Number: 380.
• Parties: COLUMBIA NAT. BANK OF TACOMA et al. v. MATHEWS.
• Court: U.S. Court of Appeals — Ninth Circuit

85 F. 934

COLUMBIA NAT. BANK OF TACOMA et al. v. MATHEWS.

No. 380.

United States Court of Appeals, Ninth Circuit.

February 7, 1898

This case was tried upon an agreed statement of facts. It appears from this statement: That the Columbia National Bank of Tacoma, plaintiff in error, was duly organized September 2 1891. That the articles of the association provide that the capital stock shall be $200,000, divided into shares of $100 each, and that the capital stock may be increased at any time by shareholders owning two-thirds of the stock, according to the provisions of the act of congress of May 1, 1886; and in case of the increase of the capital of the association each shareholder shall have the privilege to subscribe for such number of shares of the proposed increase of the capital stock as he may be entitled to according to the number of shares owned by him before the stock was increased. That immediately after its organization it engaged in a general banking business at the city of Tacoma, ËHC935 and continued until October 24, 1895, when Charles Clary, a bank examiner, by direction of the comptroller of the currency of the United States took possession of the books, records, and assets of said bank and closed its doors, and thereafter, on October 30, 1895 Charles Clary was appointed by said comptroller temporary receiver of said bank, and acted as such receiver until May 15, 1896, when the defendant Philip Tillinghast was duly appointed by said comptroller receiver of said association and thereupon duly qualified as such, and ever since has been, and is now, the duly appointed, acting, and qualified receiver of said bank. That at a regular meeting of the shareholders of said association held January 12, 1892, said shareholders passed, by a vote of shareholders owning two-thirds of its capital stock, the following resolution: 'Resolved, that under the provision of the act of May 1, 1886, the capital stock of this association be increased in the sum of $300,000, making the total capital $500,000. Further resolved, that, as the money paid in amounts to $50,000 or more, the president or cashier be authorized to certify the same to the comptroller of the currency, and shall so continue to certify until the said $300,000 is paid in. ' That on July 13, 1892, L. P. Mathews, the defendant in error, purchased 12 shares of the original capital stock of the association, and paid therefore, and received a certificate therefor issued in due form. That on October 28, 1892, L. P. Mathews subscribed for 23 shares of the increased capital stock of the association, voted at the meeting of the shareholders on January 12, 1892, and paid to said association $2,300 therefor; whereupon the name of L. P. Mathews was entered upon the books of the bank as the holder of 23 shares of the increased capital stock of the bank, and a certificate was issued and delivered to him therefor. That on November 29, 1892, Mathews, at the request of the bank, forwarded to its officers a blank power of attorney to vote on his stock, as follows: 'Know all men by these presents, that L. P. Mathews, of Crete, state of Nebraska, do hereby constitute and appoint -- --, of Tacoma, state of Washington, my attorney, for me, and in my name, place, and stead, to vote at any and all stockholders' meetings of the Columbia National Bank of Tacoma, Washington, until this power is revoked, on all shares of stock of said National Bank of Tacoma, Washington, on which I shall have the right to vote, and in the same manner as I should do were I then personally present, with power to substitute an attorney under him for like purposes." The blank was afterwards filled in by the officers of the bank having authority so to do by inserting the name of T. W. Bean. This proxy, was never formally revoked. Mathews had no knowledge of the name that had been inserted in said instrument. That on December 28, 1893, at a meeting of the board of directors of the association duly called, on motion, a 4 per cent. dividend was declared payable on and after January 2, 1894. That on January 2, 1894, the officers of the bank inclosed in an envelope addressed to Mathews, without any letter or word of explanation, two instruments: (1) An ordinary dividend check, drawn upon the Columbia National Bank of Tacoma, showing upon its face that it was a 4 per cent. dividend declared upon the capital stock of the bank, for $48; and (2) an ordinary draft for $92, drawn upon the Continental National Bank of Chicago, there being nothing upon its face to indicate for what it was paid. Both of these instruments were received by Mathews in due course of mail, and he collected the money upon the same. That on July 25, 1895, at a meeting of the board of directors of the association, the following resolution was adopted: 'Whereas, on the 12th day of January, 1892, this association resolved to increase its capital stock in the sum of $300,000, making a total capital, as increased, of $500,000; and also resolved, that, as payments aggregating $50,000 or more were made, the same should be certified to the comptroller of the currency; and whereas $150,000 of such increase of capital has been paid in, and certificates issued therefor, the remaining $150,000 of such proposed increased capital stock not having been paid in, resolved, that the unpaid portion of such proposed increase of said capital stock be canceled and rescinded, and that the paid-up capital stock of said association be, and the same is hereby, fixed at $350,000, and that the comptroller of the currency be notified of the increase of $150,000 in said capital stock,-- making a total capital of $350,000,-- and that the same has been paid in, and that he be requested to approve and issue a certificate of such increase according to law. ' A copy of this resolution was duly transmitted to the comptroller of the currency, together with a certificate of said bank in words and figures following, to wit: 'Columbia National Bank of Tacoma, July 25, 1895. To the Comptroller of the Currency, Washington, D.C.: It is hereby certified that the capital stock of the Columbia National Bank of Tacoma, Washington, has been increased, pursuant to the act of congress approved May 1, 1886, in the sum of $150,000, all of which has been paid in cash, and that the paid-up capital stock of said bank now amounts to $350.000,"-- to which certificate was annexed the affidavit of the cashier that the certificate subscribed by him is true. That Mathews was not a director of the association. No notice of the above-mentioned meeting of the board of directors, or of its action at said meeting, or of the forwarding of said certificate to the comptroller of the currency, was given to him, and he had no actual knowledge thereof until long after the bank closed. That on August 9, 1895, the comptroller of the currency sent a letter, directed to the cashier of the Columbia National Bank, to the effect that he had determined to approve an increase in the sum of $150,000 upon the following conditions: 'A meeting of the shareholders must be called for the purpose of considering the question of increasing the capital stock, and the notice of said meeting must be given to the shareholders, by mail or publication, thirty days prior to the date of holding the same, and must specifically state that the matter of increasing the capital stock in the sum of $150,000, making the capital after increase $350,000, will be considered at such meeting, and such other business as may properly come before it. If at such meeting a two-thirds stock vote is obtained in favor of said increase, and the legal requirements are fully met, the increase will receive my approval. ' That subdivision 8 of the articles of the association provides as follows: 'These articles of association may be changed or amended at any time by shareholders owning a majority of the stock of the association, in any manner not inconsistent with the law; and the board of directors or any three shareholders may call a meeting of shareholders for this or any other purpose not inconsistent with law, by publishing notice thereof for thirty days in a newspaper published in the town, city, or county where the bank is located, or by mailing to each shareholder notice in writing thirty days before the time fixed for the meeting. ' That on August 9, 1895, and continuously thereafter until September 9, 1895, the following notice was inserted in a daily newspaper published at Tacoma, to wit: 'Stockholders' Meeting. A special meeting of the stockholders of the Columbia National Bank of Tacoma, Washington, is hereby called for Monday, the 9th day of September, 1895, at 10 o'clock a.m., at the office of said bank, to take action in regard to the increase of the capital stock in the sum of $150,000, making the capital, after increase, $350,000, will be considered at such meeting, and to attend to any other business that may property come before the meeting,'--signed by the proper officers. No notice of this proposed meeting was mailed to Mathews, and he had no actual knowledge of the meeting, or that it had been held, until after October 24, 1895. That on September 9, 1895, a meeting of the stockholders of the bank was held at the office of the bank, at which 9 shareholders were present in person, and said T. W. Bean, acting under similar powers of attorney, was present claiming to represent 58 other stockholders. The total number of shares so represented at said meeting was 1,578, and of the votes of said stockholders the full amount of shares so represented was cast in favor of the following resolution: 'Resolved, that under the provisions of the act of May 1, 1886, the capital stock of this association be increased in the sum of $150,000, making a total capital, after...