Munro v. Post
| Citation | 102 F.2d 686 |
| Decision Date | 27 March 1939 |
| Docket Number | No. 225.,225. |
| Parties | MUNRO v. POST. |
| Court | United States Courts of Appeals. United States Court of Appeals (2nd Circuit) |
Abraham Fishbein, of New York City, for appellant.
John L. Farrell, of New York City, for appellee.
Before SWAN, AUGUSTUS N. HAND, and PATTERSON, Circuit Judges.
The plaintiff, receiver of the Richmond National Bank of New York, brought action to recover from the defendant, a stockholder, an assessment made by the Comptroller of the Currency. The complaint was in two counts. The first was that the Comptroller on November 14, 1933, became satisfied that the bank was insolvent and appointed the plaintiff receiver, that the Comptroller later made an assessment on the stockholders, that the defendant was the owner of 67 shares of stock at the time of the failure and was therefore liable for $1,340. The second count made the further charge that prior to the failure, on December 13, 1932, the defendant had transferred 58 shares of stock to one Essenfeld with knowledge of the impending failure of the bank, that Essenfeld had failed to pay the assessment, and that the defendant was liable for the assessment on the 58 shares in the amount of $1,160. The defendant put in an answer denying portions of the complaint and setting up as a separate defense that if the bank was insolvent, insolvency was due to the act of the Comptroller in closing the bank and in arbitrarily refusing to permit it to re-open, rather than to any misconduct of the officers, directors or stockholders. Further defenses were that the insolvency was due to circumstances beyond the control of those in charge of the bank, and that the orders whereby the bank was closed were unconstitutional and void.
At trial on the merits a jury was waived. The receiver proved, as to the first count, a certificate of the Comptroller under date of November 14, 1933, reciting that he was satisfied that the bank was insolvent and unable to pay its debts and appointing the plaintiff receiver. He proved also that the Comptroller by instrument of March 7, 1934, made an assessment on the stockholders for an amount equal to the par value of the stock, and that the defendant was the owner of record of 67 shares of stock when the assessment was made. Under the second count the receiver proved, by evidence or admissions, that the defendant had transferred 58 shares of stock on December 13, 1932, to Essenfeld, and that Essenfeld had not paid the assessment. On the issue of knowledge of impending failure of the bank, it was brought out that a bank examiner in June, 1932, had made a report on the condition of the bank, in which he declared that the bank was in a precarious condition and that there was an estimated insolvency to the extent of $120,000. The report was shown to have come to the attention of the defendant prior to the transfer of the shares, the defendant being the president of the bank. The trial judge held that the receiver had proved his case and that the separate defenses pleaded by the defendant were insufficient. He directed judgment for the receiver on both counts. D.C., 23 F.Supp. 308.
The decision of the trial judge on these points was sound. The National Banking Act makes stockholders individually liable for debts of a bank up to the par value of their stock, and imposes the same liability on stockholders "who shall have transferred their shares * * * with knowledge of such impending failure, * * * to the extent that the subsequent transferee fails to meet such liability". 12 U.S.C.A. § 64. The Act also authorizes the Comptroller, when "satisfied of the insolvency of a national banking association", to appoint a receiver to close up the bank and enforce the liability of stockholders. 12 U.S.C.A. § 191. The declaration of the Comptroller as to insolvency and his declaration of assessment are conclusive on the issues of insolvency and necessity of assessment. Kennedy v. Gibson, 8 Wall. 498, 19 L.Ed. 476; Casey v. Galli, 94...
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