STEPHENS t1., FOLLE'l"l'.
December, 1889, and under the stipulation on' file jury and' agreeing to the trial hereof by this court sitting witho\lt a jury, having come' regularly on for trial before meon the 5th day of May, A. D; 1890, and having been then tried and submitted to this court, sitting without a jury, for its decision, William Ely Bramhal1, Esq 0' then and there appearing for and in behalf of plaintiff, and McNeil V. Seymour, Esq., and John M. Gilman, Esq., having then and there appeared for and on behalf of the defendants: Now, after having fully heard said connsel, and after full and due consideration and deliberation, I find as facts, in addition to those contained in the tion and agreement iii writing between the parties hereto, dated on the 19th day of February, 1890, and which was filed in the office of the clerk. ofthis court on February 20, 1890, as follows: ' '" , "First. That at the time said Stephen Gardner subscribed to the proposed increase of the capital stock of the Fifth National Bank of st. Louis, in 1886, he was about 80 years of age, and was, and had been for some time p.rior thereto, and continued afterwards to be, iri very feeble health. " ' "Second. That at the time said officers of said bank, referred to in said at_po ulation, applied to said Stephen Gardner, and by its circular referred to in ,the; said stipulation, invited him to subscribe to the increase of the capital stock' of said bank, as well as for a long time prior thereto, said bank was, and'haa ever since continued to be, wholly insolvent, and was 'known to be insolve'nt' by the omoersof said bank at the time of sending satJ circular, and atthetime' said Stephen Gardner's written SUbscription to said proposed In-' crease of stock, and at the time said sum of ten thousand dollars was received·' by said bauk. .' , ..Third·.That said Stephen Gardner paid said sum of ten thousand dollll:rs to t said Qank for one hundred shares'of the proposed increase or new issue ofq:ie, capital stock of said bank, which he supposed would be made on theIst day' January, 1887: that said bank. upon receiving said sum of money, paid a'pilrtion thereof to the president,of said bank, and the balance of said sum of the directors, and In return therefor permittf'd said president and director to surrender to said bank hundrj!d sharElsof the original capital stock of said hank, and thereupon; and in lieu thereof, said bank did issue a certit)cate foroliehundred shares of said original stock in the name of Stephen Gardner, ' and sent said certificate to saidStf'phenGardner at Hastings, Minnesota,' wh,ere he resided ; that there was nothing on thll face of the certitlcateso' issued and received by saM Gardner to show that It was not one hundred, ,1Ia(l, , shares of,the proposed inc'rease of stock for which said Stephen subscribed, and fOl' which he had paid his money: that. the letter which said certitlcate was inclosed, taken in cooneetion with pi'ior correspondence, indicated, and was intendt'd by the officer of the bank who wrote it to indicate, that the said certitlcate reprt'sf'lltt'd the new issue of said stock which was proposed to be made, and said Stephen Gardner belieYed that such certificate t did in fact represent the, new issue of the capital stock of suid bank for which; he had subscribed, and had no knowledge or intimation to the contrary until long aftl'r the failure of said bank, and long after the of thlS plaintiff hl'rein as its receiver. , ,. " " .. l/ou1'th. That when the dividend menUoned in the stipulation was received', bysald Stephen Gardner, 'he believed it was a. dividend upon the stock Of the I proposf'd incre,ase whic.h heIJupposed hehadjn said bank. and never 'learned" or thought to the contrary until long after the failure of said ballkand 'the.! appolntm,Elnt of the plaintiff aueceiver. .'." ,', , ' " .. That E bit B, to the depositil>n ,,is.t,he of shareholders of saId bank, cetllfied to' the comptroller of the currency on the 1st Moodayof July, 1887, Ity:l:iaid bank. 'But in tll'st preparing ing .. ibebook .kept· for, tlutt. ,purpose tbe' list of shareholders,d"nth61!1t-'
MondaylnJuly, 1887, Mr. Gardner was entered as the owner -of 115 shares onl)",.an!lat.80me subsequent date the figures were changed from 115 to 215· .A& to. this alteration was made, there is no satisfactory direct testimony. but the.!jaidnumber of shares (215) ever afterwards, as changed, continued to stand, in bis name. "S1P;tk. That, as soon as said StephenGardner learned that he bad not received the stock for which he bad subscribed, be promptly through his agent, interviewed said receiver, and. though no formal claim was presented. the repayment of said sum of ten thousand dollars was demanded and claimed; that said receiver stated that he could not entertain such claim; that said agent asked said receiver if he would deem said clai m presented. Said recei ver replied "hat he would treat said claim as presented, but would reject the same. "Seventh. That in writing the letters signed by Charles and attached to the stipulation, said Charles Espenschied did so at ilie request of said Gardner. "As conclusions of law I find that the plaintiff, as receiver:of the said Fifth is to of the said defendants, as the executors lastwilI and testament,of Stephen Gardner. deceased, the sum of eleven thousand' five hundred (11,500) dollars, with interest thereon at the rate of SIlVenper cent. per froIII June 22,1889, together with the costs and distiurl!em'ents herein·.to ,be taxed by the clerk and entered in the jUdgment tppe paid out .Qf the estate of said Stephen Gardner, deceased. and thatpll:\lptUl: is. not entitled tq any other or further relief berein. Therefore it is 0rd.er!ld that judgmentbeentllred in favor of said plaintiff. as such receiver, and against tbe said defendants, as such executors. for $11,500, with interest at; seven per cent. from June 22,1889. and tar tbecosts and dlsburseqlents herein, to be paid O!l.t 'of the estate of the said Stephen Gardner, deceased. Oole, Bramhall <t- Morris,' for plaintiff· . Sf;rinfjer <t-' &yrnour, M.D. Munn, and .J. M. Gaman, for defendants.
NELSON ,J. The defendants do not attempt to escape liability for the that Gardner purchased shares of stock through misrepresentation of the vendor or his agents; nor is there any suggestion by the receiver in the pleadings, or any proof, that they are liable because the testator was a subscriber to the increase of the capital stock of the bank, although his name appears on the list of subscribers for 100 shares.' The suit is lirough( to recovet' an asSessment made by the comptroller upon the defendants' wstator, as an owner of the original stock issued to subscribers . when the bank was first organized, and in order to recover the plaintiff must prove that the testator was the owner ofthe stock which is entered in the bank-books in his name. The presumption is; on the stipulated . facts, as hiSl1ttme is registt;lred in the stock book as a stockholder to the amouIltof 215 shares, that he was owner thereof, when he h.eldcertiflcates for such stock, d,ulyissued and signed by the proper bank pfficers; but these facts are not conclusive of ownership. Such prima facie case throws upon the defendants the ont18 of rebutting the presumption. It is conceded. 115 shares of the capital stock were owned by Gardner, but it is <;llaimed that they are not liable for an assessment upon the 100 in his name, and for which a certificate .waS issued 18.87·. ThE) manner in which this certificate for 100'shares
STEPHENS V. FOLLETT.
issued appears in the stipulated facts, and the question presented is, did the testator purchase this stock, or has he consented to the transfer of the stock registered in his name? A purchase of stock in an organized bank from one who is a stockholder required the mutual assent of the vendor and vendee to the contract. If a lack of mutual consent is shown, and there is an absence of contract between the parties that the testator should purchase the 100 shares of old stock, and thus become liable as a stockholder, he was not a stockholder or owner, within the meaning of the national bank laws,! imposing individ,ual liability, although the stock was transferred and registered in his name. The criterion of liability is whether any act has been done by which the corporation was forced to receive the testator as a stockholder. In the face of the entry and tran,sfer of the stock and issue of a certificate, the defendants may introduce evidence to show that the entry is false, and the certificate falsely issued. The testimony shows that the bank was in a sickly condition, and the transfer from the president and one of the directors of their stock was unauthorized. The sale or transfer of stock of a national bank is not governed by different rules from those which apply to other incorporated companies. Proof must be made of the assent of the parties thereto. They must have assented to the transfer, as shown by the bank-books, to make the testator a stockholJer, and subject to the onerous liability which the national bank act imposes on stockholders. The proof is' clear that the defendants' testator subscribed for and sent his money to the bank to pay for 100 shares of the proposed increase of the capital stock of the bank, and the certificate sent was old stock transferred to' him without his knowledge or consent. Such a transaction cannot be' upheld. A transfer of stock under such circumstances, without the knowledge of the person to whom it is transferred, does not make him liable as a shareholder. He must be held out to the public as a shareholder, with his knowledge of the fact. It is claimed that this defense cannot be set up on a suit brought by the receiver to recover an assessment made, in order that the creditors of the bank may obtain satisfaction; and it is said that creditors of the bank would suffer by such a rule., Injurious consequences to creditors,which may happen after such an' authorized transfer of stock, cannot make the defendants responsible on a contract which their testator never made and had nothing to do with. There can be no estoppel unless defendants' testator aRsented to the transfer of the stock. He had no knowledge that he was registered 011 the stock-book as the o,,'ner of 100 shares of the original stock of the bank, which had beE}n transferred to him by Overstoltz, the president, and Rosenthal, a director; and there were no circumstances disclosed in the transaction between ,him and the bank, when he subscribed for 160 1 shares of the increase to the stock and paid for it, thatputbim upon'.an inquiry to ascertain whether the certificate issued represented th,e l;ltOck he subscribed for or old stock fraudulently transferred. He had. purchased no stock from any stockholder, but had responded
'Rev. St.. U.s. 55151.
sent for an, increase of the capital stock of and ha,d paid for 100 shares of the new stock which he was anxious to get. A ,certificate dated about the time the president ofthe bank informed tPe increase ",ould probably be issued was' sent, properly sigl,led, ,and there was n()thiIlg upon its face to indicate it was not the new stocf subscribed for. , Adividel1d was declared and paid upon the original stock June 7, 1887, and it is urged that the testator; .having received j,t, is estopped from now asserting that he did, not own these shares., While a dividend lqight, if the person in whose name the stock is registered receive it, tend to establish ownership, still receipt of a dividend is not conclusive proof,that he is a stockholder within .the law imposing individual liability. , .The, evidence taken, in addition to the facts stipulated, does not change the ?tatu8 of the case. In, *e ,case of KeysPJr lfitz, 133 U. S. 139, 10 Sup. Qt. Rep. 290, the oO'q,rt holds that a transfer of stock in a bank to a person without his not" impose upon the tr8.nsferee the liaqility by lawt9 the position of shareholder in the association;. but if the. tr!!nsferee does any act approving or acq uieschw; in, the transany benefit arising from the, fer, or jn,."'J;lY way ratifies it,. or such Qe90mes liaple to be. treated as a s.hareholder. witbsq<:h Ils.the laW imposes in Gardner did nqt.!tnow, when a dividend was paid: to him upon 215 ehares, that WUl;\enteredip his name,: for. he never had purch8Ilep:or, authorized the tmpsfer of the 100 shares which, appear in .the books as transferred to him., 'He therefore never any benefit Gardner arislllg:t;rom the ownership of such sto(lk. It is right to \:>y retllrning the djviqfmd, ,or offering tore.tum.it, and tlle assessIJlent upcm the,lO() shares. ,This to te;nder back the dividend does, not, under thacireumstallces, , , prevelJt. tpe defense urged. defendants mu,st After fup·ponlli<ierilti9111 I arnof the opinion that ,of lOQ p.er cent., of the par valueuponU5 shares of pay the for $11,500, .with interest at. stock Cln1y",andj\ldgqlent must be,(r9,in June 22. and it is 80 ordered. 7 per
UNITED, STATES 11. ONE DISTILLEJW., .
(l)t8trict ooitrt; B; D. OaltjorntrtoOctober20,l890.)
, After 'linoftteer and stocl!:bolder of a corporation engaged in distilUng 18 convfcted (: .Jo.r a yiQlation' ,of the intet:nal' revenue law, an ,action cannot be maintained to an, foroll $e to. of the qo:rporation'll property for though, , the for'feiture 1s re&isted only by the other stockholders. ' Following U. B. v. MOo 'Kee,'lIilL,128.. :il;":: ", '
.·. , "
the' of certainreafand personal property for alleged violation of the internal revenue !aws!. '
UNITED STATESt'. ONEDISTILLEBY.
; Ross,J. Sections 3257, 3281, 3305,3453, and 3456 of the Revised ,Statutes of the United States areas follows:
, "Sec. 3257. Whenever any engaged in carrying on the business of a defrauds, or attempts to defraud, the United States, of on the 'spirits distilled, by him, or auy part thereof, he shall the distiijery and ,distilling appa),'attis used, him, and ,all spirits, all raw mateproduction ofdistillell spirits, found in II,eAistil1eryand on,the 1'lals distillery and shall be, fined, not less than,fivtl dollars 110r 'Dlqretbilh li;v,e thousand dollars,' an4,be impriso;ned less., years."" , ' . ,," ) ,',' " " ." "sec; 32Hl. Every person who carrill8' on the businesllof·a distiller ,wi_hout engages, ba.ving;giv,el1 bond, as,requi1'ed by;hiw, or ofa'llistilier with to the United St<Ltes of the,tax on 1;>y ,!lim, or of any ,part thereof, shaH, fqr eV,ery sqch ot'fense,b(:l fined, not less t'tlan, thousand dollars nor O1ore than live thoudol!ars, and imprisoneij' not less than montbsnolj mor.e,thlmtwo : :A,ndaU distillel;1 i sp":its or wines, ,aud al}stills or, otller fit .u8t'd or fOl' the ,compoun'd,Ingof 8.uchperson,whereverf<mnll, 4isor fOlmd \n the or InC4plJ.pre, t,hj!re,with, !in,d ,with or cop.a of and rigllt, title, in pf such pel'8lm'inthe lot or tract 'onimd on which such distillery' 'i,ssitullted, an,d·,1ll1 right, title, and interest therl'in of every person who knowingly has suffered ,<>l"penuittedtbebusiness ofa distHIer to be there carried: or has (lonni ved an,d per&\},nal by or in poasessiondf any per1l0A permitted or' suffered, any building, :'bart to be used for: purposes, of ingress or egreslltQ, or 'tillery, wliichshall be,foUlid in any building, yard, hiqlosure, '!i,ndall 'the title; and interest of everypersotdnany premises used 'fodtigress or egress 1jJ()"9rfrotri such distillery, wno 'has knowingly sUffered or petu'litted s,uqb, pl'rlili$estobe used :for such Ingress or egress, shall be forfeited to'the ,Statel:!." ",' , " .,; , Whenever any false is Pll;lde in, or any entry r1lq\l.lrlld to , "Seo. be made 'isoJ'nitted frolIl, either of sai<J books mentioned, in, thll, preoeding.ectlons, with intenttodefrliudoi' to' conceal from the reveuli,6 ''(lers '8ny t'aetor particular required, to'be stated and entered in either'of said ,books,"or to mislead in reference thereto, or any' distiller.' asafores<\id; omits O,r W ,provide either of said books, 01' cancels, obliterates. or deiltroyS ,of either ,of said books, or any entry therein. with intent ·to,qefraud, /lny Of ,permits the to be done, or such 1lOQks, 0.1' e,ither of. ar:e dace-d when reglllred by any revenue officer, distillery ,and the lot· ol'tril:ct of land onwhic!J it stands, arid all personal saidptemlse8used in the business there on, ,shall be forfeited to the :United States. And every personwhlJ false entry,' orblnitsto I,\11Y eptry bel'einbefore required to: ,he'IDade, with the intent'/lffdresaid, :01' whq,cRUses or procures the same to fr/ludulently olliliter,iltes, Or qe8t1'oys any part of said books. or any eptry therein,Qr: ,failstoprodtJce such books,oi-either: of them, shall be filled not 'hundred nor more tban' ii, ve dolla'rs, and imllris<;lne? ':ii9,t ;1¥ss than Sht'moilths, years."'" " " " . '" ,,1/1..: ). :'l ;All good&. wares. ,mer.obail4!lilJe, arUoles.,01' objects