Pacific Nat Bank of Boston v. Eaton

• Decision Date: 25 May 1891
• Citation: 141 U.S. 227,11 S.Ct. 984,35 L.Ed. 702
• Parties: PACIFIC NAT. BANK OF BOSTON v. EATON
• Court: U.S. Supreme Court

141 U.S. 227

11 S.Ct. 984

35 L.Ed. 702

PACIFIC NAT. BANK OF BOSTON v. EATON.

May 25, 1891.

A. A. Ranney, for plaintiff in error.

J. H. Benton, Jr., for defendant in error.

[Argument of Counsel from pages 228-230 intentionally omitted]

BRADLEY, J.

This case belongs to the same group as Delano v. Butler, 118 U. S. 634, 7 Sup. Ct. Rep. 39, and Aspinwall v. Butler, 133 U. S. 597, 10 Sup. Ct. Rep. 417. It relates to certain shares of the increased stock of the Pacific National Bank of Boston issued in September, 1881. The circumstances under which said stock was created and subcribed are detailed in the reports of the cases referred to, and need not be repeated here. It will suffice to state those which are peculiar to the present case, only adverting to such others as may be necessary to understnad it. On September 13, 1881, the capital stock of the bank was $500,000, and on that day the directors voted that the capital be increased to $1,000,000, and that the stockholders have the right to take the new stock at par. in equal amounts to that then held by them. Subscriptions to the new stock were payable October 1, 1881. Mary J. Eaton, the defendant in error, having 40 shares (equal to $4,000,) of the original stock, took her full share of the new stock, and paid for it September 28, 1881, and received the following receipt therefor:

'Pacific National Bank,

'$4,000. Sep. 28,

'Boston, October 1st, 1881.

'Received of Mary J. Eaton four thousand dollars on account of subscription to new stock.

'J. M. PETENGILL, Cashier.'

The stockholders of the bank did not all avail themselves of the right to take new stock, but $461,300 of the $500,000 were taken and paid in. At the request of the directors, and the sanction of a large majority of the stockholders, the increase of stock was afterwards limited to the said sum paid in, and approved by the comptroller of the currency, who made and executed his certificate to that effect. Certificates for the new stock were made out in a book, with stubs to indicate their contents, and were delivered to the stockholders as they called for them. Such a certificate was made out for Miss Eaton, but she never called for it, though she was registered in the stock register of the bank as owner thereof without her knowledge. The statement of facts, among other things, has the following: 'No certificate of stock in said proposed increase of capital in the amount of five hundred thousand dollars was made by the bank, nor was any certificate in said claimed increase of four hundred and sixty-one thousand three hundred dollars received by or offered to the plaintiff, but when the certificate from the comptroller, made December 16th, was received by the bank, a certificate of forty shares in said claimed increase of four hundred and sixty-one thousand three hundred dollars was made by the bank, a copy of which isher eto annexed, marked 'C,' which was never called for, taken by, or tendered to the plaintiff, but still remains in the certificate book, and she was then registered in the stock register of the bank as the owner thereof without her knowledge. No certificates in said claimed increase were ever tendered by the bank to any persons to whom they were made, but were delivered to them when called for. No communication was made to the plaintiff with reference to said vote of the directors of December 13th, or change in said proposed increase, or said certificate of said comptroller, or said certificate made to her, and she never assented to any change in the proposed increase in the sum of $500,000.' On the 10th of January, 1882, there was held an annual meeting of the stockholders of the bank for the election of directors and other business, at which it was voted, in accordance with an order from the comptroller of the currency, made under section 5205 of the Revised Statutes, to make an assessment of 100 per cent. upon the shareholders of the bank, pro rata for the amount of capital stock held by each; the vote being 5,494 shares for the assessment, and 55 shares against it. The defendant in error on the day of the annual meeting, and before its opening, made the following demand upon the bank in writing, delivered to the directors: 'Boston, January 10, 1882. To the Pacific National Bank: The conditions upon which you received four thousand...