People's Nat. Bank v. Board of Com'rs of Kingfisher County

• Decision Date: 08 September 1908
• Parties: PEOPLE'S NAT. BANK et al. v. BOARD OF COM'RS OF KINGFISHER COUNTY et al. [d1]
• Court: Oklahoma Supreme Court

103 P. 682

PEOPLE'S NAT. BANK et al. v. BOARD OF COM'RS OF KINGFISHER COUNTY et al. ^[d1]

Supreme Court of Oklahoma

September 8, 1908

Syllabus by the Court.

The title to corporate assets is in the corporation, and not in the stockholders owning stock therein; and, upon a transfer of stock the title to such assets remains unaffected.

The completion of the conversion contemplated by statute of a banking corporation, organized and existing under the laws of the territory of Oklahoma, into a national bank carries with it the assignment and transfer of the assets of the former to the latter, who succeeds thereto by operation of law, and not as a purchaser.

A stockholder and director in a banking corporation organized and existing under the laws of the territory of Oklahoma having certain property consisting of lost warrants inadvertently intermingled with the assets of said bank at the time of the sale of his stock therein, is not, as against said bank suing thereon as owner, estopped to set up title thereto either before or after the completion of its conversion into a national bank.

Error from District Court, Kingfisher County; C. F. Irwin, Judge.

Action by the People's National Bank and others against the Board of County Commissioners of Kingfisher County and others. A. J. Seay, intervened. Judgment for intervener, and plaintiff bank brings error. Affirmed.

Roberts & Curran and F. L. Boynton, for plaintiffs in error.

P. S Nagle and W. A. McCartney, for defendants in error.

TURNER J. (after stating the facts as above).

It is not contended by the People's National Bank, plaintiffs in error, that the People's Bank was the owner of the warrants in question, but it is contended that it took over the assets of said bank on the 14th day of June, 1899, and by reason of the fact that as intervener was at that time a director in said bank, he was chargeable with knowledge of such of its affairs as appeared upon its books, and that as he carelessly allowed these warrants to become intermingled with the assets of the People's Bank, and stood by and saw them sold as the assets of that bank to the People's National Bank, he is estopped to claim them as against said bank. But is this contention true in point of fact? We think not. When and how did the People's National Bank "take over" the assets of the People's Bank? The facts recite that on January 3, 1898, the People's Bank was incorporated as a territorial bank; that on June 10, 1899, intervener owned 30 shares of stock therein, and on that day sold them to Stone. A few days later the other two remaining stockholders sold their stock, and a new set of stockholders took charge on the 14th of June. It is conceded by all parties that at that time there was intermingled with the assets of the People's Bank, and claimed by it, the warrants in controversy, which were really the property of interpleader. Now how did the sale of interpleader's stock to Stone, or the sale of all the stock of the People's Bank to a new set of stockholders, affect its assets? Did it have the effect to pass them, together with those intermingled assets, to anybody as purchaser? In other words, does a purchaser of stock in a corporation purchase any portion of the assets? We think not. It is well settled that the title to the corporate assets is in the corporation; that neither the legal or equitable title thereto is in its stockholders; that the ownership of shares of stock is but the ownership of the right to participate from time to time in the management and net profits of the business. 26 Am. & Eng. Enc. of Law, 899. In Gibbons v. Mahon, 136 U.S. 557, 10 S.Ct. 1058 (34 L.Ed. 525), the court said: "The distinction between the title of a corporation and the interest of its members or stockholders, in the property of the corporation, is familiar and well settled. The ownership of that property is in the corporation, and not in the holders of shares of its stock. The interest of each stockholder consists in the right to a proportionate part of the profits whenever dividends are declared by the corporation, during its existence under its charter, and to a like proportion of the property remaining, upon the termination or dissolution of the corporation, after payment of its debts." Van Allen v. Nolan, 70 U.S. 573, 18 L.Ed. 229, 234; Delaware Railroad Tax, 85 U.S. 206, 230, 21 L.Ed. 888, 896; Tennessee v. Whitworth, 117 U.S. 129, 136, 6 S.Ct. 645, 29 L.Ed. 830, 832; New Orleans v. Houston, 119 U.S. 265, 277, 7 S.Ct. 198, 30 L.Ed. 411, 415. So it is conclusive that the transaction above referred to had no such effect upon the assets of the People's Bank, as to pass the title thereto to People's National Bank or to the new set of stockholders or any one else but the same remained the assets of the People's Bank the same as though nothing had happened. While the assets so remained the property of the People's Bank, intermingled with which were the warrants in question, to wit, on July 20, 1899, the People's Bank, finding them among its assets, sued the board of county commissioners of Kingfisher county thereon. Pending suit a year elapsed after which intervener, Seay, by leave of court set up title thereto claiming them as his long lost warrants, which, we repeat it, is denied by no one. Had the cause come on for trial between the People's Bank and intervener, the latter certainly would not have been estopped from asserting title thereto, but would have recovered without doubt. But on March 25, 1901, the People's Bank, having...