Wingert v. First Nat. Bank of Hagerstown

• Citation: 175 F. 739
• Decision Date: 16 December 1909
• Docket Number: 937.
• Parties: WINGERT v. FIRST NAT. BANK OF HAGERSTOWN, MD., et al.
• Court: United States Courts of Appeals. United States Court of Appeals (4th Circuit)

175 F. 739

WINGERT v. FIRST NAT. BANK OF HAGERSTOWN, MD., et al.

No. 937.

United States Court of Appeals, Fourth Circuit.

December 16, 1909

Henry F. Wingert (Miller Wingert, on the brief), for appellant.

Charles A. Little and George R. Gaither, for appellees.

Before GOFF, Circuit Judge, and BRAWLEY and CONNOR, District Judges.

PER CURIAM.

The decree complained of is without error. The opinion of the court below, on which said decree is founded, in our judgment properly disposes of the questions of law involved in this case, and is adopted as the conclusion reached by this court on the assignments of error found in the record.

Said opinion reads as follows 'MORRIS, District Judge. This is a bill for an injunction filed by Lewis P. Wingert on his own behalf (and on behalf of such other stockholders of the First National Bank of Hagerstown, Md., as should elect to become parties complainant) against the bank and against its directors.

'The bill alleges: That the First National Bank of Hagerstown Md., is a national bank organized and incorporated under the act of Congress authorizing the organization of national banks. That it has a capital stock of $100,000 divided into 10,000 shares of $10 each. That the complainant, Lewis P Wingert, is the owner of 151 shares of the par value of $1,510. That the bank owns a lot of ground in Hagerstown which is improved by a banking house in which it is now doing business, and which the bill alleges is sufficient for the bank's uses and of which the second and third floors are rented out to tenants. That the directors of said bank are about to tear down the present building and erect in its place at a cost of $60,000 a six-story building of which the first story is designed for the use of the bank and the remaining five stories are designed to be rented out for offices and places of business. That he contemplated action of said national banking corporation is ultra vires and prohibited by the provisions of the national banking act. That a diversion of so large a portion of the funds of the bank from its legitimate business is not consonant with proper banking methods, and that the complainant has addressed to the president and directors a formal written protest calling upon them to desist from said illegal action. That, notwithstanding said protest, the said directors are about to cause the present banking house to be torn down and intend thereafter to erect on said lot the six-story bank and office building aforesaid. The bill then charges, that, by the restrictions of the act of Congress governing national banks, the corporation can lawfully hold only such real estate 'as shall be necessary for its immediate accommodation in the transaction of its business,' and that the action aforesaid of said directors is not only unwise as a business proposition and a diversion of the bank's fund from legitimate uses, but is contrary to the act of Congress; that the bank cannot lawfully enter upon a real estate business such as the construction of a large and expensive office building to be rented out for general purposes. The bill prays an injunction restraining the bank from erecting on the site of the present bank building or any other lot belonging to or acquired by the bank a six-story building and from tearing down the present bank building for the purpose of erecting in its stead such six-story office building, and from changing the present bank building more than shall be necessary for its immediate accommodation in the transaction of its business.

'The bank and all of the directors (except William Wingert) answered the bill, alleging: That the lot owned by the bank is in the center of the business part of Hagerstown surrounded by the principal commercial and public buildings of the city, and is in a location peculiarly adapted for an office building such as is contemplated. That the present building has been used for about 30 years, and during that time but tittle money has been spent on it in repairs or improvements, and that it is in such condition that considerable money must be spent on it to make it suitable and convenient for properly conducting the business of the bank therein. That the bank has over and above its capital a surplus of $100,000 and about $32,000 of undivided earnings and is in a most flourishing condition doing a large business and having a very large amount of deposits. That the lot of ground alone is worth from $35,000 to $40,000, although carried at a valuation of only $10,000. That the proposed expenditure will be taken out of the undivided profits, and will not diminish the surplus of the bank and will be a safe and productive investment of its funds. That there is a demand in Hagerstown for such an office building, and a number of persons have already applied for offices...