Page v. Jones

• Decision Date: 04 September 1925
• Docket Number: No. 6866.,6866.
• Parties: PAGE v. JONES.
• Court: U.S. Court of Appeals — Eighth Circuit

7 F.2d 541 (1925)

PAGE v. JONES.

No. 6866.

Circuit Court of Appeals, Eighth Circuit.

September 4, 1925.

B. D. Shear and E. E. Blake, both of Oklahoma City, Okl. (Chester L. Evans, of Oklahoma City, Okl., on the brief), for plaintiff in error.

J. B. Dudley and S. I. McElhoes, both of Oklahoma City, Okl. (Bailey & Hammerly, of Chickasha, Okl., on the brief), for defendant in error.

Before SANBORN and KENYON, Circuit Judges, and SCOTT, District Judge.

WALTER H. SANBORN, Circuit Judge.

This is a suit by Irving Page, receiver of the First National Bank of Lawton, Okl., appointed by the Comptroller of the Currency on November 18, 1922, to collect an assessment and requisition of $1,000 made by the Comptroller of the Currency on January 27, 1923, on the defendant, M. F. Jones, the holder of 10 shares of the stock of that bank, of the par value of $100 each, to enforce his double liability to the creditors of that bank under section 5151, Revised Statutes, as amended (section 9689, U. S. Compiled Statutes).

The defendant pleaded two defenses: First, that on December 8, 1921, the bank had been closed, a prior receiver had been appointed, and soon thereafter an assessment of $1,000 had been made on his stock by the Comptroller to enforce his liability under section 9689, and he had paid it; and, second, that he had been deceived and defrauded into paying 110 per cent. of the par value of his stock to the prior receiver and the officers and directors of the bank by their false representations that by such payment, and by the payments by other stockholders, the bank would be made solvent, and he would be discharged of his liability under section 9689, and that the depositors, by agreements to leave their deposits in the bank for six months after its resumption of business, estopped themselves from subsequently enforcing any liability of the stockholders under that section. The plaintiff denied that any assessment on the stock was ever made prior to that of January 27, 1923, denied the alleged deceit, fraud, and false representations, and the alleged estoppel of the depositors. The case was tried to a jury, the court instructed them to find a verdict for the defendant, and this ruling is challenged as error.

At the trial these facts were conclusively established:

The bank became insolvent, ceased business, Bernard Ulrich was appointed receiver of it by the Comptroller of the Currency, and took possession of its property as such in December, 1921, and held it until May 22, 1922, when the Comptroller discharged him. He turned the property of the bank over to its officers; it resumed business, and continued to operate until, on November 18, 1922, the plaintiff was appointed receiver of it, and took and still holds possession of its property. The Comptroller never made any assessment on the defendant or his stock, or on the stock of any of the stockholders of the bank, prior to that of January 27, 1923. The defendant never paid any such assessment, and his first defense was proved to be baseless.

After Mr. Ulrich was appointed receiver, in December, 1921, some of the officers and directors of the bank, in order to secure a resumption of its business, conceived the plan of persuading its stockholders, who were able and willing to do so, to pay into the bank 110 per cent. of the par value of their stock, and of persuading other stockholders to surrender their stock and transfer it to other parties, who would pay in such 110 per cent. thereof. Another part of this plan was to obtain from as many of the depositors of the bank as possible written consents that their deposits should remain in the bank at least six months after it resumed business. They succeeded in executing this scheme. Pursuant to it $220,000 was paid into the bank by the stockholders, and depositors of about 85 per cent. of the deposits in the bank made written agreements to leave their deposits in the bank for six months after it resumed operations. Mr. Ulrich, the receiver, approved this plan and its execution, recommended them to the Comptroller, and he discharged the receiver. Mr. Ulrich immediately turned the property of the bank back to it, and it resumed business about May 22, 1922, and continued its operation until November 18, 1922, when it was insolvent, and the plaintiff was appointed its receiver and took possession of the property.

Mr. Jones, the defendant, testified that he was engaged in the cotton business during this time; that Mr. Maddux, the cashier of the bank, before the bank resumed its business, came to him and told him that he had come to collect his assessment, that he was stuck for 100 per cent., that Mr. Ulrich was ready for the money, and that, if he did not pay, Mr. Ulrich would bring suit and make him pay; that his answer to Mr. Maddux was that he was not ready to pay; that thereupon Mr. Maddux told him that his main business was not only to collect the assessment, but to talk with him about the reorganization of the bank, and he then stated to him that by paying 10 per cent. more a surplus would be created, that the Robinsons proposed to put in $150,000 worth of good collateral and take out some bad paper, that they had $100,000 of surplus to charge off, $200,000 capital, and some undivided profits, and that the Robinsons putting in this amount would give them a chance to charge off approximately $500,000 worth of paper, which would put the bank in very good shape; that soon after this conversation he paid in the assessment; that he understood he paid it as a double liability, to satisfy that liability; that he believed these representations that the bank was in good shape and would be in good condition when it opened; that he knew that some of the depositors had made written agreements to leave their deposits in the bank for six months after its resumption of business; and that he would not have paid his 110 per cent. into the bank if the depositors had not made these contracts. He further testified that he had been in the cotton business from 15 to 17 years; that at the time the bank was closed in December, 1921, he had a small deposit in it, and owed it from $15,000 to $20,000, which he subsequently paid; that he knew Mr. Ulrich, the receiver, and talked with him several times while he was there in charge of the bank, but they never discussed the condition of the bank at their conferences, and Mr. Ulrich never said anything to him with reference to the assessment, double liability assessment, against his stock.

Over the objections and exceptions of the plaintiff, several of the stockholders testified that Mr. Ulrich told them that he had an assessment against their stock; that they would have to pay it or the 110 per cent.; that, if they paid the latter, that payment would discharge their double liability, and that they paid in their 110 per cent. in reliance upon those statements, and would not have done so, if they had not been made. Mr. Ulrich testified that he never made any such statements. Over the objections and exceptions of the plaintiff, several witnesses testified that Mr. Ulrich told them that, if the 110 per cent. was paid in, the bank would be solvent and prosperous, and that they relied upon those statements, and would not have made their payments if they had not been made. A consideration of all the evidence convinces that the Comptroller, Mr. Ulrich, the receiver, the officers and directors of the bank, the depositors and stockholders, who made the representations as to the solvency of the bank upon the execution of the proposed...