Hulitt v. Ohio Valley Nat. Bank

• Court: U.S. Court of Appeals — Sixth Circuit
• Citation: Hulitt v. Ohio Valley Nat. Bank, 137 F. 461 (6th Cir. 1905)
• Decision Date: 11 May 1905
• Docket Number: 1,386.
• Parties: HULITT v. OHIO VALLEY NAT. BANK.

137 F. 461

HULITT v. OHIO VALLEY NAT. BANK.

No. 1,386.

United States Court of Appeals, Sixth Circuit.

May 11, 1905

Henry M. Huggins, for plaintiff in error.

J. J Muir and Robert Ramsey, for defendant in error.

Before LURTON, SEVERENS, and RICHARDS, Circuit Judges.

SEVERENS Circuit Judge.

This suit was brought by the plaintiff in error, who is the receiver of the First National Bank of Hillsboro, Ohio, to recover an assessment levied by the Comptroller of the Currency upon the shareholders of the bank on account of their extraordinary liability to creditors, the bank having become insolvent. The defendant in error is charged as the owner of 20 shares of the stock of the Hillsboro bank. To the petition the defendant filed an answer making a general denial of the plaintiff's allegations in respect to its ownership of the stock. The case was heard in the court below upon an agreed statement of facts, which is embodied in a bill of exceptions, and is as follows:

(1) On March 18, 1893, one Overton S. Price procured a loan from the defendant in the sum of ten thousand ($10,000) dollars giving him promissory note therefor, together with certain collateral securities recited in the body of said note, a copy of which note, with all indorsements thereon, is hereto attached, made part hereof, and marked 'Exhibit A.'

(2) On December 25, 1893, said Price deceased, leaving said note at that time past due and unpaid. No payments have ever been made upon said note, except as hereinafter set forth. There is still a balance remaining due and unpaid upon said note.

(3) On June 18, 1894, the defendant made a formal transfer of the pledged stock of the First National Bank of Hillsboro, Ohio and the Dominion National Bank of Bristol, Va., to one Henry Oetjen, an employe of the defendant, who was pecuniarily irresponsible. Said shares were transferred upon the books of said banks, respectively, and new certificates therefor issued in the name of said Oetjen, and delivered to him on July 7, 1894. No money consideration passed to the defendant for said transfer, and none was expected, nor did the defendant at that time credit said note with any sum by reason of said transfer, nor was any credit at that time indorsed upon said note or entered in defendant's books. Said Oetjen indorsed in blank the certificates of stock which were issued to him.

(4) Said transfer was made upon the understanding and agreement between said Oetjen and the defendant that the former should hold said stock as security for the indebtedness of the estate of said Price upon said note, applying any amounts which he might realize from said stock as credits upon said note; that in pursuance of this agreement and understanding said Oetjen subsequently paid the defendant, on account of said note, a sum of money received by him from said Dominion National Bank on account of a reduction in the capital stock and also the amount of certain dividends which he received from time to time upon said Dominion National Bank stock, until the same was finally sold by said Oetjen, whereupon the proceeds of said sale were likewise applied by him upon said note.

(5) That on February 19, 1896, the defendant prepared proof of claim against the estate of said Price, and at that time, believing the stocks transferred to said Oetjen to afford a reasonable security for said Exhibit A to the amount of forty-four hundred and eighty-four ($4,484.00) dollars, indorsed the credit for that amount upon said note, which appears upon Exhibit A, and filed its proof of claim against said estate for the balance of the indebtedness upon said note; that no consideration was paid for said credit and the same was not entered upon defendant's books; that all dividends arising upon said distribution of the estate of said Price were applied upon said note.

(6) That said First National Bank of Hillsboro, Ohio, continued to do business until July 16, 1896; that from the date of said transfer the stock in said bank at all times appeared on the books of said bank in the name of said Oetjen; that there was nothing on the books of said bank at any time to connect this defendant with said stock or to indicate that this defendant had any interest whatever in the same; that defendant at no time performed any act of ownership of said stock, or exercised, or attempted to exercise, any of the rights of a stockholder of said bank or of the Dominion National Bank of Bristol, Va., unless the acts above set forth were, according to legal intendment, of that character. Defendant caused said shares to be transferred to said Oetjen because it was unwilling to assume the risk of the statutory liabilities of a stockholder in respect to said shares.

Exhibit A.

'$10,000. X. Cincinnati, O., March 18th, 1893.

'Ninety days after date I promise to pay myself or order, ten thousand dollars for value received, payable at the office of A. C. Conklin & Co., having deposited or pledged as collateral security for the payment of this note,

50 shrs. Citizens' Nl. Bk. Stock, Hillsboro, O. . . . shrs. $100

20 shrs. First Nl. Bk. Stock, Hillsboro, O. . . . shrs. 100

40 shrs. Hillsboro Gas Light Co. Stock . . . shrs. 50

30 shrs. Dominion Nl. Bk. Stock, Bristol, Va. . . . shrs. 100

100 shrs. Bk. of Camden Stock, Camden, O. . . . shrs. 100

200 shrs. Bk. of Lynchburg Stk., Lynchburg, O. . . . shrs. 50

'And I hereby give to the holder thereof full power and authority to sell or collect at my expense all or any part or portion thereof, at any place, either in the city of Cincinnati, or elsewhere, at public or private sale at holder's option, on the non-performance of the above promise, and at any time thereafter, and without advertising the same or otherwise giving to me any notice. In case of public sale, the holder may purchase without being liable to account for more than the net proceeds of such sale.

'O. S. Price.'

Indorsed: 'C. S. Price.'

'Forty-four hundred and eighty-four ($4,484.00) dollars paid on account of within note June 18, '94, being proceeds of sale of 30 shares stock Dominion Natl. Bank and 20 shares of stock 1st National Bank of Hillsboro, O.'

The court gave judgment for the defendant, to which the plaintiff excepted. No opinion was filed by the trial judge, but counsel assumed, and we suppose...