Hayes v. Shoemaker

• Decision Date: 23 July 1889
• Citation: 39 F. 319
• Parties: HAYES v. SHOEMAKER.
• Court: U.S. District Court — Northern District of New York

39 F. 319

HAYES v. SHOEMAKER.

United States Circuit Court, N.D. New York.

July 23, 1889

John N Beckley, for plaintiff.

H. V Howland, for defendant.

COXE J.

This action is by Frank M. Hayes, as receiver of the First National Bank of Auburn, N.Y., to recover $4,100 upon an assessment made by the comptroller of the currency, under section 5151 of the Revised Statutes, against the defendant as a shareholder of the bank. The facts are undisputed. On the 16th of March, 1885, 41 shares of stock were transferred by Michael Shoemaker to the defendant, and have since stood in defendant's name on the books of the bank. On the 31st of August, 1886, the defendant, through his attorney, H. W Taylor, sold this stock in good faith to Clinton T. Backus. Taylor was appointed attorney, by a written instrument, and was invested with full authority to sell the stock, and to perform any act with reference to the transfer thereof that the defendant could perform. On the day in question Taylor went to the bank to receive the purchase money, and complete the transaction. He met Backus there. Charles O'Brien the cashier of the bank, was present. O'Brien was advised of the sale, shown the certificate and power of attorney, and informed by Taylor and Backus that they had come to make a legal transfer of the stock, and to do all that was necessary to accomplish this result. The cashier directed Taylor to indorse the certificate, and deliver it to him with the power of attorney, stating that nothing further was required of either Taylor or Backus. Taylor did as requested. The cashier was authorized and directed to make the proper entries in the books of the bank, and he promised so to do. The defendant supposed that the stock had been properly transferred, and never was informed to the contrary until just prior to the commencement of this action. It is argued by the plaintiff that, notwithstanding this sale,--concededly a bona fide one as between the parties,-- the defendant's individual liability continued, for the reason that the stock was not transferred upon the books of the bank, as required by law (section 5139, Rev. St.) and by the by-laws of the bank. The defendant, on the contrary, insists that all liability was discharged by the sale and the transactions subsequent thereto. He maintains that after he had sold his stock in good faith and received payment, after he had indorsed the certificate and surrendered it to the cashier with full notice of the sale, after he had instructed the cashier to have a legal transfer made in the books of the bank, and had been informed by that officer that such a...