People's Nat. Bk. v. Bd. of Com'rs of Kingfisher Cnty , 24 Okla. 145 ( 1909 )

It is contended by the People's National Bank "that the People's Bank became the owner of the warrants by the estoppel of the transactions and events of June 10 to 14, 1899." We have carefully examined the record, and find that said transactions amounted to no more than separate sales, by Newers, Bickford, and intervener, each of his own stock in the People's Bank, save three shares retained by Bickford, to Stone, Boynton and Winkler; the resignation of the three former as president, cashier, and vice president, respectively, and a reorganization of said bank by the election of the new stockholders as a new board of directors, with Boynton, Stone, and Winkler as president, vice president, and cashier, respectively.

It is insisted, in effect: (1) That the legal effect of the sale of their stock by Seay, Newers, and Bickford to Stone, Boynton, and Winkler was to vest in the three latter title to all the assets of the People's Bank; (2) that the legal effect of Seay being a director at the time of said sale was to charge him with constructive notice that his lost warrants were being carried on the books of said bank as a part of its assets, the title to which also passed at the same time; (3) that title to the warrants in question being thus in its said new stockholders, Seay is estopped from asserting title thereto as against the People's Bank or its successor, the People's National Bank.

1. The title to the corporate assets is in the corporation. Neither the legal nor equitable title thereto is in its stockholders. The ownership of shares of stock is but the ownership of the right to participate from time to time in the management and net profit of the business. 26 Am. Eng. Enc. of Law, 899. In Gibbons v. Mahon, 136 U.S. 557, 10 Sup. Ct. 1058, 34 L.Ed. 525, the court said:

"The distinction between the title of a corporation and the interest of its members or stockholders in the property of the corporation is familiar and well settled. The ownership of that property is in the corporation, and not in the holders of shares of its stock. The interests of each stockholder consist in the right to a proportionate part of the profits whenever dividends are declared by the corporation, during its existence under its charter, and to a like proportion of the property remaining, upon the termination or dissolution of the corporation, after payment of its debts. Van Allen v. Nolan, 70 U.S. (3 Wall.) 573, 584, 18 L.Ed. 229, 234; Delaware RailroadTax, 85 U.S. (18 Wall.) 206, 230, 21 L.Ed. 888, 896; Tennesseev. Whitworth, 117 U.S. 129, 136, 6 Sup. Ct. 649, 29 L.Ed. 830, 832; New Orleans v. Houston, 119 U.S. 265, 277, 7 Sup. Ct. 198, 30 L.Ed. 411, 415."

Therefore the transaction above referred to had no such effect, as claimed, upon the assets of the People's Bank as to pass the title thereto to the new set of stockholders, but the same remained the property of the bank as though nothing had happened.

2. It being thus determined that the title to the assets of the bank remained in the bank and did not pass by the sale of its stock to the new set of stockholders, it becomes immaterial to discuss to what extent Seay as a director was chargeable with knowledge of what the books of the bank contained. We think it sufficient to say, as was said by Brewer, J., inFirst National Bank v. Drake, 29 Kan. 329, 44 Am. Rep. 646, that public policy "sustains the doctrine of imputed knowledge on the part of the directors only so far as will protect the dealings of third parties with the bank, or will prevent the bank from suffering through inattention or wrong from the directors themselves," and has no application in this case.Bryant v. Hawley, 7 Cal.App. xiii, 94 P. 850. While the assets so remained the property of the People's Bank, intermingled with which were the warrants in question, to wit, on July 20, 1899, one of the new management of said bank, finding them among its assets, sued the board of county commissioners of Kingfisher county thereon. Pending suit a year elapsed, after which intervener Seay set up title thereto, claiming them as his long-lost warrants, and which is not denied. On March 25, 1901, the People's Bank having increased its capital stock, and having been converted into a national bank, intervened and claimed said warrants by virtue of its succession and said alleged estoppel. The effect of the plea is to assert as a proposition of law that a stockholder and director in a bank, having lost a portion of his personal property, which has, without his actual knowledge, become inadvertently intermingled with the assets of the bank, and as such appear upon its books, is estopped to assert title thereto as against the bank, after he has parted with his stock therein, where his assignee makes no complaint. To this we cannot assent. We can see how Stone, to whom Seay sold his stock, might complain and sue Seay, and perhaps recover in a proper action the difference between the value of his stock in the financial condition the bank was with the warrants added to its assets and what it was with them subtracted therefrom, or how he might sue to rescind the sale of the stock on the ground of mistake, but we can see no privity between Seay and the bank upon which the latter can predicate an estoppel and claim title to the warrants in itself.

Finding no error, the judgment of the lower court is affirmed.

All the Justices concur.