Wilson v. Merchants Loan Trust Company

• Decision Date: 02 December 1901
• Docket Number: No. 67,67
• Citation: 22 S.Ct. 55,46 L.Ed. 113,183 U.S. 121
• Parties: E. T. WILSON, Receiver of the First National Bank of Helena, Montana, Plff. in Err. , v. MERCHANTS' LOAN & TRUST COMPANY of Chicago, Illinois
• Court: U.S. Supreme Court

183 U.S. 121

22 S.Ct. 55

46 L.Ed. 113

E. T. WILSON, Receiver of the First National Bank of Helena, Montana, Plff. in Err.,

v MERCHANTS' LOAN & TRUST COMPANY of Chicago, Illinois.

No. 67.

Argued October 29, 30, 1901.

Decided December 2, 1901.

Messrs. Delevan A. Holmes and W. E. Mason for plaintiff in error.

Mr. John N. Jewett for defendant in error.

Mr. Justice Peckham delivered the opinion of the court:

The plaintiff in error brings this case here to review a judgment of the United States circuit court of appeals for the seventh circuit (39 C. C. A. 231, 98 Fed. 688) affirming a judgment of the district court of Illinois in favor of the defendant. The plaintiff in error is the receiver of the First National Bank of Helena Montana, and brought this action against the defendant to enforce an assessment of 100 per cent ordered by the Comptroller of the Currency on all owners of shares in that bank. In his declaration the plaintiff, after alleging the organization of the bank, his appointment as receiver, and the assessment by the Comptroller, averred that 'the Merchants' Loan & Trust Company, a corporation at some time between the 1st day of December, 1894, and 1st day of June, 1895 (the exact date being to plaintiff unknown), purchased and became the owner of 120 shares of the capital stock of said First National Bank of Helena, Montana, of the par value of $100 each, and continued to be, and was at the time said bank suspended and ceased to do business, the real owner of the same; but, in order to evade the responsibility imposed by law upon the shareholders in said bank, caused said shares to be placed on the books of said bank in the name of P. C. Peterson, one of its employees, in whose name said shares appeared on the said books at the time of said failure. And the plaintiff avers that the said Peterson was at the time said stock was issued to him as aforesaid, and at the time of the failure of said bank, a person of small means and not responsible financially.'

The plaintiff demanded judgment for the sum of $12,000, being $100 on each share of the stock in the bank owned (as alleged) by the defendant.

As one of several defenses to the action, the defendant pleaded that the plaintiff ought not to maintain his action 'because it says that it did not, at any time between the 1st day of December, 1894, and the 1st day of June, 1895, or at any other time, purchase or become the owner of 120 shares of the capital stock of the said First National Bank of Helena, Montana, or any share or shares of the capital stock of said bank, and of this the said defendant puts itself upon the country,' etc.

Under these pleadings the plaintiff, of course, had the burden of proving ownership of the stock by the defendant.

The parties waived a trial by jury and entered into the following stipulation:

'It is hereby stipulated and agreed between the parties herein that trial by jury in this case be waived; that this cause may be submitted to the Honorable Christian C. Kohlsaat, judge of this court, upon the foregoing statement of facts duly signed by the attorneys of the parties respectively, and that for the purpose of such trial the said statements of facts shall be taken as absolutely true, and shall be taken and considered as all the facts concerning the transactions therein referred to, subject to any and all objections which might properly be urged to the competency or materiality of any part thereof.

Upon the trial before the court without a jury, the statement of facts as agreed upon between the parties was put in evidence, and such statement contained all the evidence in the case, which was thereupon submitted to the court for its decision. The court made no special findings of facts, but made a general finding of the issues for the defendant, embodied in a judgment which was entered as follows:

'Now come the parties by their attorneys, and thereupon a jury is waived by written stipulation, and this cause is submitted to the court for trial, and the court, having heard the evidence and arguments of counsel, and being now fully advised, finds the issues for the defendants, to which finding the plaintiff excepts, and thereupon the plaintiff enters his motion for a new trial, which is heard and overruled, to which ruling the plaintiff excepts. It is thereupon considered and adjudged by the court that the defendants recover of the plaintiff their costs in this behalf, to be taxed, and that execution issue therefor, to which judgment the plaintiff then and there excepts.'

The statement of facts agreed upon and filed in the court was subsequently allowed as a bill of exceptions. There was no exception taken to any fact contained in this statement, nor in the progress of the trial, nor was there any request to find other special facts. The only exception taken was to the general finding of the court in favor of the defendant. From this agreed statement of facts it appears that on April 15, 1893, the defendant loaned to one Ashby of Helena, Montana, $12,000, and took his note in the usual form payable on August 16, 1893. As collateral security for the payment of the note at maturity, Ashby signed in blank and delivered to the defendant a certificate representing 150 shares of the capital stock of the Helena National Bank of Helena, Montana. The note taken for the loan was of the kind usually termed a collateral note, and authorized the sale of the collateral deposited as security therefor upon default in the payment of the note. At the time of the loan Ashby was president of the Helena National Bank. On July 26, 1893, Ashby made a general assignment for the benefit of his creditors, and among the property assigned by him was the certificate for 150 shares of the capital stock of the Helena National Bank, described by the assignor as then held by the Merchants' Loan & Trust Company in pledge. About the date of the assignment Ashby resigned the presidency of the Helena National Bank. In the summer of 1894 the Ashby note still remained unpaid, and the certificate of stock remained in the possession of the defendant, no transfer thereof being made upon the books of the bank. Later in the year 1894 the parties in interest in Helena proposed to consolidate the Helena National Bank with the First National Bank of Helena, and the consent of a sufficient number of shareholders in the bank was obtained before the defendant was asked to consent to the transfer of the shares held by it in pledge, on the same terms upon which the owners of shares in the Helena National Bank had agreed to a consolidation of the two banks, by taking shares in the First National Bank of Helena in exchange for their shares in the Helena National Bank, at the rate of 80 per cent of new shares in exchange for the old. In response to such request the defendant sent the certificates for the 150 shares in the Helena National Bank to the president of that bank. In exchange therefor certificates for 120 shares of stock in the First National Bank of Helena were sent to the defendant, the shares being entered, at request of defendant, on the books of the bank and in the certificates, in the name of P. C. Peterson, an employee of the defendant. Subsequently, the First National Bank of Helena went into the hands of a receiver, who found the 120 shares standing on its books in the name of Peterson. The receiver, after the assessment was made, commenced this action against the defendant trust company, alleging that it was the real owner of the stock, and that it stood in the name of Peterson for the purpose of enabling the defendant to evade liability as owner.

The note remains unpaid, although two small payments on account have been...