DocketNumber: No. 12,821
Citation Numbers: 69 Neb. 152
Judges: Duffie, Kirkpatrick, Pound
Filed Date: 5/20/1903
Status: Precedential
Modified Date: 7/20/2022
The Merchants Bank of Lincoln became insolvent, and was placed in the hands of a receiver. After exhausting the assets of the bank, the claims allowed against the same being still unpaid, the court directed the receiver to institute suit against its several stockholders to enforce their liability upon their respective shares of stock. The Lincoln Savings Bank and Safe Deposit Company is also in the hands of a receiver, and among the assets reported by the receiver are thirty shares of one hundred dollars each of the stock of the Merchants Bank. Shilling, the receiver of the Merchants Bank, in compliance with the order of the court, commenced an action against John E. Hill, receiver of the Lincoln Savings Bank and Safe Deposit Company, and other stockholders of the Merchants Bank, to recover upon the statutory liability of said stockholders, and obtained judgment against the Lincoln Savings Bank and Safe Deposit Company, in the sum of $3,575.90. The defendant bank has brought the record here for review. The parties stipulated the evidence upon which the case was tried, and the circumstances under which the savings bank became possessed of the stock are agreed upon as follows:
“That on the 27th day of September, 1892, one D. L. Brace was the owner of thirty shares of stock in the plaintiff bank, and on said day he borrowed and the defendant bank loaned to him the sum of $2,500 evidenced by a note of that date due January 1, 1893; that said note was payable to the order of the defendant bank and signed by D. L. Brace, the bank taking said shares of stock as a collateral to the said note. That on the 23d day of February,*154 1893, by mutual agreement between said D. L. Brace and the defendant bank, the said thirty shares of stock belonging to said D. L. Brace were taken up and canceled by said plaintiff bank and the thirty shares of stock involved in this action were issued and delivered to Mr. Miller, the secretary of the bank as hereinbefore agreed, with the mutual understanding between said D. L. Brace and the said defendant bank, that at any time when he could pay said $2,500 nóte and interest thereon, he could take up, and the said bank would surrender to said Brace said thirty shares of stock; that the court shall take and accept of these facts and consider the same as evidence in the case. It being further agreed that D. L. Brace above named was on February 23,1893, and ever since has been insolvent, and that the stock referred to was listed by the receiver, J. E. Hill, as the property of said Lincoln Savings Bank and that no dividends have been paid upon said stock since February 23,1893.”
Article 3 of the charter of the savings bank is as follows:
“The business to be transacted by said corporation, is receiving money on deposit, paying interest thereon, investing the money of said corporation in bonds, notes, mortgages and other securities; the renting of vault boxes, and receiving and keeping in the vaults of said corporation, papers, securities, and such other valuables as may be deposited with said corporation for safe keeping; the purchasing or renting of such real estate as may be necessary for a place or places of doing and transacting the business of said corporation, and purchasing such real estate as may be necessary to secure debts due or to become due said corporation, and selling, leasing, mortgaging or otherwise disposing of real estate so acquired.”
The plaintiff in error insists that, by its charter, the bank was restricted in its business to receiving money on deposit, paying interest thereon, investing its money in bonds, notes, mortgages and other securities, and that it had no authority or power to invest in stocks or to become a stockholder in another corporation and thus endanger or
“It is doubtless true that the bank could legally take the stock of another corporation as security for a debt previously contracted. Possibly it might make a loan on the strength of the stock as security at the time. On this point the authorities are not in harmony, and as it is not material here we do not decide it. An emergency might arise when a bank’s board of directors Avould be justified in taking the stock of another corporation in settlement, adjustment, or compromise of a doubtful claim or debt, acting in the honest belief that only by so doing could a serious loss to the bank be aArerted. None of these reasons, however, existed in the case at bar,or, if they did, the record before us does not disclose them.”
Whether the savings bank might take this stock as collateral to the loan made to Brace is not Ave think material to be determined. At the time the loan was made no
The savings bank having become the owner of the stock, was liable thereon as any other stockholder. National Bank v. Case, 99 U. S. 628.
We recommend the affirmance of the judgment.
_ By the Court: For the reasons stated in the foregoing opinion, the judgment of the district court is
Affirmed.