Schierenberg v. Stephens

• Citation: 32 Mo.App. 314
• Parties: ERNST SCHIERENBERG, Respondent, v. LON V. STEPHENS, Receiver, Appellant.
• Decision Date: 13 November 1888
• Court: Court of Appeal of Missouri (US)

32 Mo.App. 314

ERNST SCHIERENBERG, Respondent, v. LON V. STEPHENS, Receiver, Appellant.

Court of Appeals of Missouri, St. Louis.

November 13, 1888

Appeal from the St. Louis City Circuit Court. --HON. LEROY B VALLIANT, Judge.

AFFIRMED.

Draffen & Williams and D. W Shackleford, for the appellant.

The plaintiff subscribed for twenty shares of the proposed increase of stock, and without waiting until the entire amount was taken, or to see what the future action of the association might be, voluntarily paid the sum subscribed by him, and permitted the bank to hold out the money so paid as part of its assets, and constituting part of its capital stock. If there had been an express condition in the subscription, that it should not be valid until the entire amount of the increase was taken, this action upon plaintiff's part would have amounted to a waiver of the condition. In re Cornell, 5 Cent. Rep. 181; Delano v. Butler, 118 U.S. 634; McDearmott v Donagan, 44 Mo. 85; 1 Morawetz on Priv. Corp. [2 Ed.] secs. 91, 308; 2 Morawetz on Priv. Corp. sec. 823; Thompson on Liabilities of Stockholders, sec. 170; McDougall v. Lane, 18 Ga. 444. If it be held that the provisions of the United States statutes, in regard to the method of increasing the stock, entered into and formed a part of plaintiff's contract with the bank, and that his subscription must be taken to have been made upon condition that all of the statutory requirements were to be fully complied with before it should become binding upon him, still, so far as plaintiff is concerned, he ought to be in no better position than if he had subscribed upon any other condition, which had been expressly set out in his contract. In the latter instance the condition might be waived by him, and his actions, in the case at bar, would have amounted to such waiver. The same rule should apply here. Delano v. Butler, 118 U.S. 634; Butler v. Aspinwall, 33 F. 217; Ins. Co. v. Sherwood, 72 Mo. 461; Chamberlain v. Railroad, 15 Ohio St. 225; Hotel Co. v. Hunt, 57 Mo. 126; Payne v. Stoever, 2 Dillon 427; 1 Morawetz on Corp. [2 Ed.] secs. 72, 73; Clark v. Thomas, 34 Ohio St. 4662; Rensselaer v. Wetzel, 21 Barb. 56. The plaintiff cannot recover on the ground that his subscription was without consideration, or that the consideration therefor failed. There may be a de-facto increase of stock in an existing corporation, although the statute in reference to the method of increasing the stock has not been complied with. The duty and necessity of performing the contract of subscription in such cases is the same as when subscriptions are made for stock in a de-facto corporation. The allegations in the answer show that there was a de-facto increase of the stock in the case at bar, and that plaintiff had subscribed and paid for shares thereof. Chubb v. Upton, 95 U.S. 665; Case v. Galli, 94 U.S. 673; 2 Morawetz on Corp. [2 Ed.] sec. 755; Railroad v. McPherson, 35 Mo. 13; Hotel Co. v. Hunt, 57 Mo. 126; Hotel Co. v. Harris, 51 Mo. 464; Wheeloch v. Kost, 77 Ill. 293; Keyser v. Hitz, 2 Mack. 473; Bank v. Society, 44 Conn. 582. After the plaintiff has recognized the validity of the increase of stock, he is in no position to question it. " Whether the stock has been properly increased is a question the state only can raise." Pullman v. Upton, 96 U.S. 328; 2 Morawetz on Corp. [2 Ed.] 762; Bank v. Matthews, 98 U.S. 621. The plaintiff, as against creditors, under the facts set up in the answer, is estopped from maintaining this suit. Veeder v. Mudgett, 95 N.Y. 295, 310; Hoyt v. Mining Co., 78 N.Y. 159; Clark v. Thomas, 34 Ohio St. 46; Chubb v. Upton, 95 U.S. 665; Ins. Co. v. Manuf. Co., 37 Am. Rep. 129; Savings Ass'n v. Schroeder, 8 Gil. & J. 93. An action for money had and received is in the nature of an equitable action. A party who sues to recover what he has voluntarily paid, must show that he is entitled to same ex aequo et bono. It is not sufficient to prove that, orginally, he was not bound to pay. Buell v. Boughton, 2 Denio 91; Worseley v. New Orleans, 41 Am. Dec. 333; Bidwell v. Railroad, 5 Cent. Rep. 287. The receiver represents the association and the creditors. " The creditors must seek their remedy through him. They cannot proceed directly or indirectly in their own names against the stockholders or debtors of the bank." He can, as representative of the creditors, make any defense or assert any right that would be available to them. Kennedy v. Gibson, 8 Wall. 498; Ball on National Banks, 233; Bolles on Nat. Bank Act, sec. 189; Delano v. Butler, 118 U.S. 634; Case v. Terrill, 11 Wall. 199; Bank v. Colby, 21 Wall. 609; Casey v. La Societe, 2 Wood 77; Case v. Bank, 2 Woods 23; Bank v. Price, 22 F. 697; Trust Co. v. Miller, 33 N.J.Eq. 155; Hayes v. Kenyon, 7 R.I. 136; Stokes v. Pottery Co., 46 N.J. Law, 237. Plaintiff having voluntarily paid the money cannot recover the sum so paid. Peebles v. City, 101 Pa.St. 304; Bank v. Kehlor, 7 Mo.App. 158; Gibson v. Bingham, 43 Vt. 410.

Klein & Fisse and John K. Tiffany, for the respondent.

To constitute a valid increase of the capital stock of a national bank it is requisite to perform and observe all the conditions prescribed by the statute. U. S. Rev. Stat. 1878, sec. 5142; 24 U. S. Stat. at Large, p. 18, chap. 73, sec. 1; Delano v. Butler, 118 U.S. 634, 649; Eaton v. Bank, 144 Mass. 260, 270; Charleston v. Bank, 5 Rich. [S. C.] 103, 115; Haskell v. Worthington, 94 Mo. 560. In this case the whole amount of the proposed increase was never paid, nor did the comptroller ever approve such increase of stock, nor issue his certificate as required by law. There is no averment in the answer that the plaintiff participated in any of the transactions alleged, had knowledge thereof, or derived benefit therefrom. Bates v. Perry, 51 Mo. 449, 453; Bigelow on Estoppel, 438; Acton v. Dooley, 74 Mo. 63, 67. The officers and directors of the bank, in making declarations to the comptroller and to the public, were not acting as agents of the plaintiff, and he is not bound thereby. Scoville v. Thayer, 105 U.S. 143, 151; Stace & Worth's case, L. R. 4 Ch. App. 682. No person had any right to rely upon representations of the bank's officers concerning its capital. The law provides ample means of information, and reliance on statements made otherwise is unnecessary and unauthorized. U. S. Rev. Stat. secs. 5135, 5142; Pierce v. Railroad, 21 How. [U. S.] 441, 443; Ins. Co. v. Hastings, 2 Allen [[Mass.] 398. Where money is paid by one party in consideration of an act to be done by another, the money so paid may be recovered back if the act is not done. Reina v. Cross, 6 Cal. 29, 31; Allen v. Citizens, 22 Cal. 28; Jewett v. Railroad, 10 Ind. 539; Davis v. Marston, 5 Mass. 199; Carter v. Carter, 14 Pick. [[[[Mass.] 424; Kerrigan v. Kelly, 17 Mo. 275; King v. Hutchins, 28 N.H. [[[8 Fost.] 561, 574; Lyon v. Annable, 4 Conn. 350; Wheeler v. Board, 12 Johns. [N. Y.] 363. If money is intrusted to a third party for a particular purpose, and such third party fails to apply it to that purpose, an action for money had and received will lie to recover it back. Parker v. Fisher, 39 Ill. 164; White v. Merrell, 32 Ill. 511. Where the consideration on which money was paid fails, the money may be recovered back in an action for money had and received. Spring v. Coffin, 10 Mass. 34; Pettibone v. Roberts, 2 Root [[Conn.] 258; Steele v. Hobbs, 16 Ill. 59; Woodward v. Fels, 1 Bush [Ky.] 162; Putnam v. Westcott, 19 Johns. [N. Y.] 73; Briggs v. Vanderbilt, 19 Barb. [N. Y.] 222; French v. Millard, 2 Ohio St. 44, 52.

OPINION

ROMBAUER P. J.

The only error assigned on this appeal is that the trial court erred in sustaining a demurrer to certain parts of the defendant's answer; it is therefore essential, in reviewing the propriety of the action of the court, to set out in full such parts of the pleadings as bear upon that question.

The action was instituted against the Fifth National Bank corporation and its receiver. During the pendency of the proceedings, and before judgment on the demurrer, the corporation was dissolved, the action against it abated, and judgment was rendered against the receiver, who alone appeals.

The petition against the bank and its receiver states: That the said bank was at the time of the filing of said petition, and at the several times therein mentioned, a body corporate, duly organized under the laws of the United States relating to national banks, with a duly authorized capital stock of three hundred thousand dollars, and that said bank did business up to the eighth day of November, 1887, as a national bank.

That on the eighth day of November, 1887, said bank, which was then and for a long time prior thereto, had been absolutely insolvent, suspended business, and the comptroller of the currency of the United States, after due examination of the affairs of said bank, did become satisfied of its insolvency, and did thereafter, on or about the fifteenth day of November, 1887, appoint the defendant Lon V. Stephens, as receiver of said bank, under the provisions of the laws of the United States, and that said Stephens duly qualified as such receiver, and was at the time of the filing of said petition in charge and possession of the books, records and assets of every description of said bank, and collecting all debts, dues and claims belonging to it, under the direction of the comptroller of the currency of the United States, and proceeding to close up said bank.

That between the first day of February and the eighth day of November, 1887, plaintiff deposited in said bank, in monthly installments of two hundred dollars each month, on or about the first of each month during said period, the total sum of two thousand dollars ($2,000), the last of said deposits being made by him on or about...