O'KEEFE v. Pearson

Decision Date01 December 1934
Docket NumberNo. 2924.,2924.
Citation73 F.2d 673
PartiesO'KEEFE v. PEARSON.
CourtU.S. Court of Appeals — First Circuit

Maurice Caro, of Boston, Mass. (John McAuliffe, of Boston, Mass., on the brief), for appellant.

Haven Parker, of Boston, Mass. (Parkman, Robbins, Coughlin & Hannan, of Boston, Mass., on the brief), for appellee.

Before BINGHAM, WILSON, and MORTON, Circuit Judges.

BINGHAM, Circuit Judge.

This action was brought by Herbert Pearson, receiver of the Federal National Bank of Boston, to recover a stock assessment against the defendant, James J. O'Keefe, as an alleged owner and holder of 57 16/20 shares of the capital stock of the Federal National Bank of Boston. The case was tried before the court, trial by jury being waived in open court. At the close of the evidence the defendant presented certain requests for rulings which were denied, to the denial of which exceptions were taken. The court found a verdict for the plaintiff in the amount of $1,156, with interest thereon from June 16, 1932, and judgment was entered accordingly. From that judgment this appeal is taken.

The Federal National Bank of Boston was duly incorporated as a national banking association on March 20, 1923, and continued as such until December 15, 1931, when Pearson, the plaintiff-appellee, was appointed receiver by the Comptroller of the Currency. An assessment was duly made by the Comptroller on May 9, 1932, equal to the par value ($20 a share) of the stock, and this action was brought, O'Keefe having refused to pay the amount assessed against and demanded of him.

On August 18, 1922, certain owners of stock in the Federal Trust Company, a banking corporation organized under the laws of Massachusetts, parties of the first part, Daniel C. Mulloney, designated therein as trustee, party of the second part, and the Metropolitan Trust Company, called the depositary, party of the third part, entered into an agreement. By this agreement, which was under seal, these stockholders were to deposit their certificates for shares of stock in the trust company, duly indorsed and stamped for transfer, with the designated depositary, and were to receive therefor trust certificates transferable at the office of the depositary by the registered holders thereof to others, who would receive new trust certificates. The certificates of stock deposited under the agreement were to be surrendered to the Federal Trust Company for cancellation and new stock certificates issued in the name of Mulloney, to be indorsed for transfer by him and retained by the depositary, subject to the agreement.

It was provided in the agreement that: "In the event of any assessment being made or ordered upon the stockholders of the Federal Trust Company each registered holder of a trust certificate hereby agrees for himself, his heirs, executors, administrators and assigns to forthwith pay such assessment as may be made upon or against the stock of the Federal Trust Company held by the Depositary under this agreement and represented by the trust certificate held by him at the time such assessment is made or ordered, and while such assessment is unpaid, no trust certificate shall be transferred or new certificate issued therefor."

Provision was made for the election of a successor to Mulloney as trustee should he die or resign. It was further provided that on the 18th day of August, 1932, or earlier if the trustee or trustees so elected, the Depositary "in exchange for and upon surrender of any trust certificate then outstanding will (in accordance with the terms thereof) * * * deliver at its office in the City of Boston to the registered holder thereof capital stock of the Federal Trust Company to the amount represented to have been deposited with the Depositary, and on account of which said trust certificate was issued," and the trust should terminate.

Any owner of stock of the Federal Trust Company could become a party to the agreement by signing it and delivering his stock certificates to the depositary or, at the discretion of the trustee, might become a party to the agreement without signing it and solely by delivery of his certificates of stock and his acceptance of the trust certificate issued therefor.

The trust certificate provided for by the agreement read in part as follows:

"This certificate certifies that, ______ has deposited with the undersigned Depositary ______ shares of the capital stock of the Federal Trust Company, a banking corporation, organized and existing under the laws of the Commonwealth of Massachusetts, subject to a certain agreement made by and between stockholders of the Federal Trust Company and Daniel C. Mulloney, Trustee, and Metropolitan Trust Company, dated August ____, 1922, an original copy of which is in the hands of said Metropolitan Trust Company and open for a reasonable inspection.

"While said agreement continues in force, the Depositary shall pay to the recorded holder hereof without charge or deduction all cash dividends which may be declared on said shares of stock by said Federal Trust Company and received by it, and during such time the Trustee hereunder * * * shall be entitled to exercise all the rights and power of an absolute owner thereof including the exercise of all right to vote on the stock so deposited at all meetings of the stockholders of the Federal Trust Company, * * * and without intending in any way to restrict or modify the foregoing general power, to vote for any increase or reduction in the capital stock of said Federal Trust Company; it being expressly stipulated that no voting right shall pass by or under this certificate to the holder hereof."

Provision was made for change of depositaries, if desired; and that "the terms `Federal Trust Company' for the purpose of this agreement and for all rights hereunder shall be taken to mean the above named Federal Trust Company and any corporation or corporations successor to it during the term of this agreement."

The Federal National Bank of Boston in March, 1923, became the successor of the Federal Trust Company, and, at the time the receiver was appointed, December 15, 1931, the Atlantic National Bank of Boston had become the depositary under the agreement. As such depositary it then held under the agreement 60,685 16/20 shares of the capital stock of the Federal National Bank of Boston, and O'Keefe held and owned trust certificates for 56 shares of the stock of the bank and three trust certificate scrip representing fractions of a share of stock (10/20, 12/20, and 14/20) which could be exchanged for trust certificates by surrendering to the depositary a sufficient number of them to entitle the holder to a trust certificate for one or more full shares.

The records of the Federal National Bank of Boston do not show that the defendant, James J. O'Keefe, ever held any stock in his name in that bank or that he ever signed the agreement of August 18, 1922. The transfer records of the depositary show the defendant as the holder of 57 16/20 shares of trust certificates and trust certificate scrip and one of his trust certificates was for 50 shares. The interest represented by that certificate came out of a trust certificate for 100 shares originally issued to one Fallon, and the remaining trust certificates and all the trust certificate scrip were received by the defendant and represent stock dividends on the shares of bank stock covered by the certificate for 50 shares.

The first question in this case involves the ascertainment of the meaning of the word "shareholders" as used in section 5151 of the Revised Statutes (12 USCA § 63), which provides: "The shareholders of every national banking association shall be held individually responsible, equally and ratably, and not one for another, for all contracts, debts, and engagements of such association, to the extent of the amount of their stock therein, at the par value thereof, in addition to the amount invested in such shares. *...

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7 cases
  • Bacon v. Barber
    • United States
    • Vermont Supreme Court
    • 2 Mayo 1939
    ...165 U.S. 606, 619, 17 S.Ct. 465, 41 L.Ed. 844, 849. See, also, Laurent v. Anderson, 6 Cir., 70 F.2d 819, 823; O'Keefe v. Pearson, 1 Cir., 73 F.2d 673, 97 A.L.R. 1243, 1247; Houghton v. Hubbell, 1 Cir., 91 F. 453, 455; Lucas v. Coe, C.C., 86 F. 972, 974; Keyes v. American Life, etc., Ins. Co......
  • John D. Bacon, Receiver of the National Bank of Bellows Falls v. Richard Robbins Barber
    • United States
    • Vermont Supreme Court
    • 2 Mayo 1939
    ... ... 606, 619, 41 L.Ed. 844, ... 849, 17 S.Ct. 465. See, also, Laurent v ... Anderson, (6th Cir.) 70 F.2d 819, 823; ... O'Keefe v. Pearson, (1st Cir.) 73 F.2d ... 673, 97 A.L.R. 1243, 1247; Houghton v ... Hubbell, (1st Cir.) 91 F. 453, 455; Lucas ... v. Coe (C.C.A.) 86 F. 972, 974; ... ...
  • Nettles v. Rhett
    • United States
    • U.S. Court of Appeals — Fourth Circuit
    • 4 Enero 1938
    ...stock among the original holders who had sold their rights, but to the persons then owning stock in the holding company. O'Keefe v. Pearson, 1 Cir., 73 F.2d 673, 677, 97 A. L.R. In the case of Bernard M. Baruch, one of the holders of preferred stock, there is additional evidence that he was......
  • Hansen v. Agnew
    • United States
    • Washington Supreme Court
    • 8 Julio 1938
    ... ... v. Snyder, 8 Cir., 79 F.2d 263, 103 A.L.R ... 912, and cases where the apparent ownership was in trustees, ... O'Keefe v. Pearson, 1 Cir., 73 F.2d 673, 97 ... A.L.R. 1243; Keyes v. American Life & Accident Inc. Co., ... D.C., 1 F.Supp. 512 ... No ... ...
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