Williams v. Rose

• Decision Date: 21 October 1914
• Citation: 218 F. 898
• Parties: WILLIAMS v. ROSE.
• Court: U.S. District Court — District of New Jersey

218 F. 898

WILLIAMS v. ROSE.

United States District Court, D. New Jersey.

October 21, 1914

The First National Bank of Bayonne became insolvent upon December 8, 1913, and in due course plaintiff became receiver. The complaint alleges that about October 20, 1913, Joseph Hochstein made and delivered his promissory note, dated at Bayonne, N.J., October 20, 1913, and promising to pay to the order of himself $1,225 at the First National Bank of Bayonne. The note was due December 20, 1913. The indorsement was made by Joseph Hochstein, Julius A. Rose, and two others. Before maturity the defendant Rose duly indorsed and delivered the note to the First National Bank of Bayonne for value. The note was duly presented at maturity, payment was refused, protest followed, and no part of the note has been paid.

The second count alleges that on November 9, 1913, George W Evans made his note, due one month after date, to the order of Minnie Rose, promising to pay $650 at the First National Bank of Bayonne. This note was indorsed by Minnie Rose and Julius A. Rose, and before maturity it was indorsed and delivered to the First National Bank of Bayonne for value. Thereafter payment was demanded, but not made.

The third count alleges that the First National Bank of Bayonne was organized as a national bank on December 5, 1906, with a capital stock of $100,000, consisting of 1,000 shares of stock, of the par value of $100 each. The bank did business until December 6, 1913, when it became insolvent, and plaintiff was appointed, in due course, receiver. It is alleged that prior to December 6, 1913, the defendant Rose purchased 2 shares of the capital stock of the bank and the certificates for the said 2 shares were duly issued and delivered to the defendant prior to December 6th; that they were registered in the name of the defendant on the books of the bank prior to said date; and that he was the owner and holder of the said 2 shares at the time of filing the suit to wit, September 2, 1914. It is alleged that on May 13 1914, the Comptroller of the Currency, having concluded that it was necessary, in order to pay the debts of the bank, to enforce the individual liability of the stockholders to the extent of 100 per cent., as prescribed by sections 5151 and 5234 (Comp. St. 1913, Sec. 9821) of the Revised Statutes of the United States, made an assessment upon the shareholders for $100,000, to be paid by each ratably on or before June 13, 1914, and demanded $100 upon each and every share of the capital stock held or owned by the shareholders respectively, at the time of the failure of the bank, to wit December 6, 1913. Demand was thereafter made of the defendant to pay $100 per share on each of the 2 shares standing in his name on the books of the bank, but he failed to make the payments.

Judgment is demanded for $2,078.14, with interest on the $1,225 note from December 20, 1913, and with interest on the $650 note from December 9, 1913, and with interest on $200 for the shares of stock.

The answer of the defendant Rose sets up that he applied to the bank for a $1,500 loan, and was told that if he would present a note for that amount the bank would discount the same and apply the proceeds to the credit of the account of the defendant; that thereupon defendant induced Joseph Hochstein to make a note for $1,500 as an accommodation to the defendant, which note defendant also induced two others to indorse as accommodation indorsers, and presented the same to the bank for discount; that the bank discounted the note, well knowing that Hochstein and others had merely signed for the accommodation of the defendant, and that defendant was primarily liable, and the note and the proceeds were to be used by him for his own benefit; that no consideration was received by Hochstein and others for becoming parties to the note, and that they were merely accommodating the defendant and aiding him in procuring the loan; that renewals were had until the note was reduced to $1,225, when defendant delivered to the bank the note mentioned in the first count of the complaint; that on December 8, 1913, when a receiver for the bank was appointed, the defendant Rose had on deposit with the bank $1,964, and that upon the maturity on the $1,225 note he requested that the note be charged against the credit of $1,964 by reason of his account, but the receiver refused to do this; and that the defendant, being primarily liable on the note, was entitled to have the note set off and paid out of the money on deposit to his credit in the bank.

For answer to the second count, the defendant sets up that, being in need of money, he induced one George W. Evans to make a note for $1,500 as an accommodation for the defendant, which said note was made payable to the order of Minnie Rose, the wife of the defendant, and that thereafter the bank discounted the note, knowing that the defendant was primarily liable, and that the proceeds arising from the note were to be used by the defendant for his own proper use and benefit; that Evans received no consideration for becoming a party to the note, and that the note was reduced from time to time; and that when the bank failed on December 8, 1913, it owed the defendant $1,964, but that the bank refused, upon the maturity of the note of $650, to charge the note against the credit of $1,964.

For answer to the third count, defendant sets up that when the bank failed he had an account of $1,964 on deposit in said bank; that he demanded of the plaintiff that it apply against the credit of $1,964 in favor of the defendant the $200 due from him, mentioned in the third count of the complaint, and offered to pay the defendant the difference between the amount on deposit with the bank to the credit of the defendant and the amounts due from him (the defendant) to the bank on the demands referred to in the first, second, and third counts, but that the bank refused to accept. He asks judgment in his favor on the third count for costs, and that the money on deposit in the bank to the credit of the defendant be set off against the amount claimed by the plaintiff in the first, second, and third counts.

Motion is made by the receiver to strike out...