Garber v. Crews
| Decision Date | 26 February 1945 |
| Docket Number | No. 518,518 |
| Citation | 65 S.Ct. 600,89 L.Ed. 870,324 U.S. 200 |
| Parties | GARBER v. CREWS et al |
| Court | U.S. Supreme Court |
Mr. P. C. Simons, of Enid, Okl., for petitioner.
Mr. Christy Russell, of Mattoon, Ill., for respondents.
We are called upon to determine the application in the circumstances of this case of Sec. 23 of the Act of Dec. 23, 1913,1 which imposes liability upon stockholders of a closed national bank.
November 25, 1929, the American National Bank of Enid, Oklahoma, pursuant to a resolution of its directors which recited that it contemplated 'disposing of its current business and thereafter going into voluntary liquidation,' sold its business and transferred its assets to the First National Bank of the same city in consideration of the payment of $350,000 and the assumption of its liabilities as disclosed by its books. The purchasing bank retained $110,000 to guarantee the collection of negotiable paper taken over and to cover certain real estate temporarily retained by the seller. American closed its business and promptly distributed the $240,000 cash received ratably amongst its stockholders.
The respondents were parties to an agreement, made in 1922, whereby large sums were deposited in a bank to await the settlement of disputes relative to the ownership of the funds deposited. In 1930 settlement was reached and demand made by the respondents for the payment of the deposit. It was then discovered that the fund had been dissipated and that officers of American, which was a correspondent of the bank of deposit, had participated in the embezzlements. The respondents thereupon brought action in a State court against American, its officers and directors, to fasten liability on the bank and the individuals. A judgment against American for $249,000 was affirmed by the Supreme Court of Oklahoma.2
The respondents brought the present suit in the District Court for Western Oklahoma to establish a trust in the liquidating dividend of $240,000 paid by American to its stockholders and to recover from the stockholders to amount necessary to satisfy the balance of the judgment remaining after restitution by stockholders of the liquidating dividend; that is, to enforce the double liability of stockholders. Recovery was had on each cause of action, and also on a third against the former directors of American. The Circuit Court of Appeals affirmed the judgment on the first and second causes of action and ordered dismissal of the third.3
On November 14, 1929, the petitioner sold his stock in American in good faith and for a valuable consideration to one Oven. December 20, 1929, the stockholders and directors of American held the necessary meetings and took appropriate action under the National Bank Act,4 to go into voluntary liquidation and thereafter such liquidation went forward. It will be observed that the sale of petitioner's stock was within in sixty days of November 25th and within sixty days of December 20th. The petitioner was a defendant in the present action to enforce stockholders' liability and judgment went against him as a stockholder. In a petition for certiorari he urged a number of defenses which the Circuit Court of Appeals had overruled. We granted certiorari limited to the question whether his sale of his stock relieved him sixty days of November 25th and within sixty days of December 20th. The petitioner was a defendant in the present action to enforce stockholders' liability and judgment went against him as a stockholder. In a petition for certiorari he urged a number of defenses which the Circuit Court of Appeals overruled. We granted certiorari limited to the question whether his sale of his stock relieved him of liability.5
Does § 23 of the Act of 1913 justify the judgment against the petitioner? The statute reads in part:
'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.'
We are of opinion that the petitioner is within the plain terms of the law. On its face, the Act grants no exemption due to the facts that the sale was made for consideration and in good faith; that, at the time, American was believed to be solvent; or that the existence of the claim ultimately established by the respondents was then not known to the respondents or to the petitioner.
Prior to the adoption of § 23 as a part of the Federal Reserve Act of 1913, 6 the liability of shareholders in a national banking association had been imposed by R.S. § 5151. Section 23 of the Act of 1913 reenacted, with slight verbal changes, the first clause of the first sentence of R.S. § 5151, which provided:
'The shareholders of every national banking association shall be held individually responsible, equally and ratably, and not one for another, for...
To continue reading
Request your trial
-
Jicarilla Apache Tribe v. Andrus, s. 80-1481
...of the asserted right would work injustice." Hoehn v. Crews, 144 F.2d 665, 671 (10th Cir.), aff'd on other grounds, 324 U.S. 200, 65 S.Ct. 600, 89 L.Ed. 870. Thus laches must be determined in light of the particular remedy The district court rejected the equitable defenses. The court stated......
-
United States v. Georgia-Pacific Company
...of clean hands is based on conscience and good faith. Hoehn v. Crews, 144 F.2d 665, 672 (10th Cir. 1944) aff'd, Garber v. Crews, 324 U.S. 200, 65 S.Ct. 600, 89 L.Ed. 870 (1945); 2 Pomeroy § 398. The Supreme Court defined the doctrine thus in Precision Instrument Mfg. Co. v. Automotive Co., ......
-
Potash Co. of America v. International Min. & C. Corp.
...Machinery Corp. v. J. D. Adams Mfg. Co., 7 Cir., 135 F.2d 617; Hoehn v. Crews, 10 Cir., 144 F.2d 665, 671, affirmed Garber v. Crews, 324 U.S. 200, 65 S.Ct. 600, 89 L.Ed. 870.2 In the latter case we said, "No absolute rule can be laid down by which to determine what constitutes laches or sta......
-
McDonald v. Humphries, 72875
...denied, 385 U.S. 942, 87 S.Ct. 285, 17 L.Ed.2d 224 (1966); Hoehn v. Crews, 144 F.2d 665, 672 (10th Cir.1944), aff'd, 324 U.S. 200, 65 S.Ct. 600, 89 L.Ed. 870 (1945).20 Johnson v. Yellow Cab Transit Co., 321 U.S. 383, 387, 64 S.Ct. 622, 624-25, 88 L.Ed. 814, 818-19 (1944).21 B & M Int'l Trad......