Jack v. Forrest, 944.
| Citation | 71 F.2d 264 |
| Decision Date | 07 June 1934 |
| Docket Number | No. 944.,944. |
| Parties | JACK v. FORREST. |
| Court | United States Courts of Appeals. United States Court of Appeals (10th Circuit) |
Samuel W. Hayes, of Oklahoma City, Okl. (Will L. Hoyt, of Nephi, Utah, on the brief), for appellant.
Claude F. Baker, of Eureka, Utah, for appellee.
Before LEWIS and BRATTON, Circuit Judges, and KENNEDY, District Judge.
Henry Forrest died testate in 1917. At that time he owned six shares of stock in Nephi National Bank of Nephi, Utah. They were issued and registered in his name and remained thus registered throughout the time referred to herein. They stood in his name at the time this suit was instituted. By will he bequeathed $1,000 to a niece and devised the remainder of his property as follows:
"All the rest, residue and remainder of all real and personal property, of any and every kind and nature whatever, owned by me at the time of my death, after satisfying the above named directions and bequest, I give, devise and bequeath to my beloved wife Rhoda Forrest, for her sole use, behoof and benefit, in her support and maintenance for and during her natural life; and should my said wife leave, at the time of her death, any of said property, either real or personal, then I give, devise and bequeath all the rest, residue and remainder of all such property, real and personal of any and every kind and nature, to my beloved son Ernest R. Forrest and my beloved daughter Lucile Hawkins, to be equally divided between them, share and share alike."
The estate, excluding the stock, consisted of real and personal property of the approximate net value of $10,000. Ernest R. Forrest — son of decedent and defendant herein — was appointed and qualified as administrator with the will annexed in March, 1918, and thereupon took possession of the property. During the administration proceedings, he and his sister transferred their right, title, and interest as remaindermen to their mother. On March 11, 1920, the court, having jurisdiction of the estate, entered a decree reciting that all claims, accounts, and taxes had been paid; that Ernest Forrest and Lucile Hawkins, heirs at law, had conveyed their interests to Rhoda Forrest, the remaining heir; that Rhoda Forrest thereupon became and was the sole owner of the property constituting the estate and directing that it be distributed to her. Defendant here, as administrator in that proceeding, thereupon delivered all of such property, including the stock, to his mother. He did not see the stock again until after she died in July, 1931. He then found it among her effects. About a month after the distribution had been made and while the administration proceedings were still pending, Rhoda Forrest conveyed by separate deeds to defendant and his sister certain parcels of land theretofore belonging to the estate, each deed reciting "this property comes to the grantee as an heir-at-law of Henry Forrest, deceased." Defendant paid no consideration for the real estate which he thus acquired. He still owns it and it exceeds $2,000 in value. On November 18, 1931, defendant filed a petition for his discharge as administrator. It was granted and the estate closed on December 4, 1931.
The Nephi National Bank became insolvent and suspended business on December 1, 1931 — prior to the date on which the administration proceedings were closed and the administrator discharged. On March 8, 1932, the comptroller of the currency laid an assessment against the stockholders of $100 for each share. That assessment, so far as it related to the stock in question, was not paid. The receiver of the bank thereafter instituted this action at law, pleading the facts in detail. It was alleged among other things that the duty rested upon defendant, while acting as administrator, to reserve sufficient of the assets of the estate to discharge the liability which might accrue through assessment, or to transfer the stock to a solvent distributee; that he did neither; that he acquired without consideration and now owns real estate formerly belonging to the estate exceeding in value the amount of the assessment in question. Personal judgment for $600 was sought.
After interposing certain admissions and denials, defendant pleaded in his answer that the stock had belonged to his mother since March 11, 1920; that he distributed it to her in obedience to the decree of the court having jurisdiction of the estate; that the bank had knowledge of such facts; and that on November 18, 1931, he delivered the stock to the bank, taking a receipt for it reciting that it was to be held in trust for the estate of his mother.
Trial by jury having been waived, the case was tried to the court. Judgment was rendered for defendant. Plaintiff appealed.
Defendant presented a motion to dismiss the appeal on two grounds: First, that trial by jury was not waived in writing, and, second, that plaintiff failed at the close of the evidence to request special findings of facts. The judgment recites that the parties stipulated in open court to waive trial by jury. Since the amendment of May 29, 1930, written waiver is unnecessary. 28 USCA § 773. The recitation in the judgment that a jury was waived sufficed. United States v. Perry (C. C. A.) 55 F.(2d) 819. The trial court in an action at law is not required to make special findings of fact. Hendrie v. Turpen (C. C. A.) 50 F.(2d) 1049. The general finding made was equivalent to a verdict of a jury. At the close of all evidence, plaintiff moved for a declaration of law and judgment in his favor. That was sufficient to present the questions raised on this appeal. Maryland Casualty Co. v. Jones, 279 U. S. 792, 49 S. Ct. 484, 73 L. Ed. 960; White v. United States (C. C. A.) 48 F.(2d) 178. The motion is denied.
Addressing ourselves to the merits of the case, stockholders in a national bank are liable for the obligations of the bank, each to the amount of the par value of his stock, and a transfer of stock made within sixty days preceding failure of a bank to meet its obligations or with knowledge of impending failure does not absolve the transferor from liability. 12 USCA § 64. A person holding stock as executor or administrator is not personally liable as a stockholder, but the estate in his hands is liable in like manner and to the same extent as the testator or intestate would be if living and competent to act and hold the stock in his own name. Section 66, Id.
One holding stock in a bank continues liable to assessment so long as the stock is allowed to remain registered in his name, although he may have transferred it to another, unless the transfer is appropriately noted in the records of the bank. Cases so holding exist in multiplied numbers. There are certain exceptions to that general doctrine. The transferor is not liable if he makes a bona fide sale, indorses the certificate, and requests an authorized officer of the bank to make the transfer on its records though the officer fails or neglects to do so, or in case the stock is sold to an officer of the bank, accompanied by a blank transfer, and payment is made with funds of the bank. Perhaps other exceptions obtain, but none has application here.
Since the stock in question stood registered in the name of Henry Forrest at the time of his death, his estate became and remained liable for the assessment. The liability was contingent from the time he acquired the stock and caused it to be registered in his name until the assessment was imposed. It then became fixed but existed throughout that period and attached to the estate upon his death in the meantime. And Rhoda Forrest, the distributee receiving the property belonging to the estate, took it burdened with the unextinguished liability even though the distribution was made prior to insolvency of the bank and before imposition of the assessment upon the holders of shares therein. Davis v. Weed, 7 Fed. Cas. 186, No. 3,658; Whitney v. Butler, 118 U. S. 655, 7 S. Ct. 61, 30 L. Ed. 266. The facts in Matteson v. Dent, 176 U. S. 521, 20 S. Ct. 419, 44 L. Ed. 571, were quite similar to those in this case. There, the stock stood in the name of the decedent at the time of his death. It was distributed to the widow and children. The bank subsequently became insolvent and suspended business. The assessment followed. The court held that the federal statute subjected the estate to liability although insolvency occurred after the demise of the shareholder and subsequent to distribution of the property, and that since the law of the state of Minnesota rendered distributees liable for the debts of an estate, each to the amount of his distributive share, the distributees in question were liable personally for the assessment. It required the two statutes — the state supplementing the federal — to render the distributees personally liable. But the only effect the statute of the state had was to make the allottees personally liable. It did not affect the liability of the estate. The federal statute rendered it liable despite the fact that the bank became insolvent after distribution had been made. That is the effect of the decision in that case. So here, it must be held that the estate of Henry Forrest was liable for the assessment although the bank became insolvent and suspended business after the property had been distributed. And that liability carried with it an equitable lien upon the assets of the estate. Witters v. Sowles (C. C.) 32 F. 130; Drain v. Stough (C. C. A.) 61 F.(2d) 668, 87 A. L. R. 490.
Since Rhoda Forrest took the assets burdened with the obligation, the property or the proceeds thereof could be pursued into her hands. Witters v. Sowles, supra; Mann v. Kleisdorff (C. C. A.) 16 F.(2d) 997; Luce v. Thompson (C. C. A.) 36 F.(2d) 183. As distribution did not liberate the property in the hands of the distributee, certainly the subsequent conveyance to defendant did not discharge the land so conveyed because he acquired it without consideration and with full...
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