Weinhard v. Commercial Nat. Bank

• Decision Date: 03 May 1902
• Citation: 41 Or. 359,68 P. 806
• Parties: WEINHARD v. COMMERCIAL NAT. BANK OF PORTLAND, OR. [1] WILLIAMS v. SAME.
• Court: Oregon Supreme Court

68 P. 806

41 Or. 359

WEINHARD v. COMMERCIAL NAT. BANK OF PORTLAND, OR. ^[1] WILLIAMS v. SAME.

Supreme Court of Oregon

May 3, 1902

Appeal fro circuit court, Multnomah county; Arthur Frazier and Alfred F. Sears, Jr., Judges.

Suit by Henry Weinhard against the Commercial National Bank of Portland, and suit by George H. Williams against the Commercial National Bank of Portland. From judgments for plaintiffs, defendant appeals. Affirmed.

Two separate actions were brought by Henry Weinhard and George H Williams, respectively, to recover the value of certain shares of stock in the defendant corporation alleged to have been wrongfully converted by it. As the same questions are involved in each case, they are here considered together. The defendant is a banking association, organized under the national bank act. On December 5, 1896, the comptroller of currency found that its capital stock had become impaired to an extent which made necessary an assessment of $250,000, and notified the association to pay the deficiency by assessments upon its shareholders pro rata, and, if not so paid, and the bank should refuse to go into liquidation, as provided by law, for three months after the receipt of the notice, a receiver would be appointed to close up its business. Upon the receipt of the notice, the directors of the bank held a meeting, and levied an assessment upon each shareholder of 50 per cent., or fifty dollars per share, payable on or before March 11, 1897. At the time of such assessment, Weinhard owned 100 shares of the capital stock, fully paid up, of the par value of $10,000, and Williams, 60 shares, of the par value of $6,000, likewise fully paid up. They both refused or neglected to pay the assessment levied by the directors, and on May 5, 1897, their stock was sold at public auction, in pursuance of a resolution of the board, and the bank received on such sale the amount of the assessment. Thereafter these actions were brought to recover the value of the stock sold by the corporation, alleging it to be worth par, on the ground that the assessment was invalid, and without authority of law. The plaintiffs recovered judgment in the court below and the bank appeals.

H.G Platt, for appellant.

Thos O'Day, Geo. H. Durham, and Geo. H. Williams, for respondents.

BEAN, C.J. (after stating the facts).

Two questions are presented for our determination on this appeal First, it is insisted that the court erred in overruling the defendant's motion for a nonsuit; and, second, in holding that under the national bank act the authority to levy assessments upon the shareholders of a bank for the purpose of repairing its capital stock is vested in the shareholders themselves, and not in the directors.

The plaintiffs offered no testimony, as part of their case in chief, tending to show the value of the stock alleged to have been converted by the defendant, and for this reason it is urged that the motion for a nonsuit was well taken. At the time of the sale the bank was a going concern, engaged in the transaction of the ordinary business of a banking association, and it may be presumed, we think, that its stock had some value, at least sufficient to entitle the plaintiffs to a nominal judgment, if their stock had been wrongfully converted. In addition to this, it appears from the opinion of the trial court, which is set out in full, and made a part of the bill of exceptions, that "much testimony was taken, and voluminous briefs have been presented by the respective counsel," upon the question as to the value of the stock; so it would seem that, if there was error in overruling the motion for a nonsuit, it was subsequently cured.

The other question involves a construction of the national bank act. It provides, in brief, that any number of natural persons, not less than five, may form an association for carrying on the business of banking, by executing and filing with the comptroller of the currency articles of association and an organization certificate, stating certain facts. Rev.St.U.S. §§ 5133-5135. Such association thereupon becomes a body corporate with power, among other things, to elect or appoint directors, and, by such directors, to appoint a president, vice president, cashier, and other officers, etc.; to prescribe by-laws, regulating the manner in which its stock shall be transferred, its directors and officers elected or appointed, its general business conducted, and the privileges granted to it by law exercised and enjoyed, and to exercise all such incidental powers as shall be necessary to carry on the business of banking, etc. Id. § 5136. At least 50 per centum of the capital stock must be paid in before the bank can be authorized by the comptroller of the currency to commence business, and the remainder in monthly installments of at least 10 per centum which fact shall be certified to such officer under oath. Id. §§ 5139, 5140. The affairs of each association shall be managed by not less than five directors, who shall be elected by the shareholders. Id. § 5145. The shareholders are individually responsible, equally and ratably, and not one for another, for all contracts, debts, and engagements of the association, to the extent of the amount of their stock therein, at its par value, in addition to the amount invested in such shares ( Id. § 5151), and no association, or any member thereof,...