178 A.D. 535 | N.Y. App. Div. | 1917
The Superintendent of Banks of the State of New York took possession of the Northern Bank of New York on December 27, 1910, and thereafter proceeded to liquidate its affairs as provided by section 19 of the former Banking Law (Cons. Laws, chap. 2 [Laws of 1909, chap. 10], as amd. by Laws of 1910, chap. 452). This action was subsequently commenced to enforce the statutory liability of the stockholders of the bank (See N. Y. Const, art. 8, § 7; former Banking Law, §§ 19, 71), and was originally brought against the stockholders of record only; but by a supplemental summons and complaint the transferees of certain shares were brought in as additional defendants. A number of the defendants paid assessments to the full amount of their stock during the pendency of the action, and judgment has been rendered to the full extent of their liability against the remaining defendants with the exception of a few, including the three respondents on plaintiff’s appeal, as to whom the complaint was dismissed on the merits by reason of special circumstances to which — as far as material — reference will be made later.
The sole ground for reversal advanced by the appellant Craig — who concededly was a stockholder — is that the plaintiff failed to adduce competent proof to support the findings made by the trial court that the Northern Bank was insolvent at the time this action was brought or that its liabilities exceeded its assets by $700,000 — the par value of its capital stock. And the same point is also made by the appellants Lauferty and H. Richter’s Sons. To establish the assets of the Northern Bank at the time this action was commenced plaintiff introduced in evidence, over objection to its competency and exception, an inventory of assets verified by the then Superintendent of Banks and filed in the office of the clerk of the county of New York pursuant to the requirements of section 19 of the former Banking Law.
Claims filed with and not rejected by the Superintendent of Banks................. $5,463,172 72
Offsets allowed by the Superintendent of Banks against claims not included in the lists of claims filed............................. 800,000 00
Preferred claims paid but not included in the lists of claims filed...................... 121,000 00
$6,384,172 72
$7,073,598 91 1,528,248 01 Book value of assets.. Less ascertained losses
- 5,545,350 90
Deficiency of assets.................... $838,821 82
The appellant Lauferty makes further objection that the plaintiff is estopped from recovering judgment against him because of the following facts: In the original complaint Lauferty was sued as the owner and holder of record of eleven shares of stock. After he had answered denying that he was a stockholder, the plaintiff served a supplemental summons and complaint joining as defendants individuals to whom various record holders claimed to have transferred their stock and alleging inter alia that with respect to 309 certain shares standing on the books of the bank in the names of other defendants, the defendant firm of Battles & Co. “ purchased and became the actual owners ” thereof and are “ the transferees ” thereof and liable to assessment thereon, and further that the defendant Morris “ purchased and became the actual owner ” of 309 certain shares standing in the names of other defendants and “ is the transferee ” thereof and liable to assessment thereon, and further that the defendant Robin “ purchased and became the actual owner ” of 636 certain shares standing in the names of other defendants and “ is the transferee ” thereof and hable to assessment thereon. Two members of the firm of Battles & Co. answered and Lauferty then filed an amended answer alleging that he had sold his stock at auction to Battles & Co. and asking affirmative
The facts peculiar to the appeal of H. Richter’s Sons are as follows: The members of this firm owned fifty shares' of the stock of the “ old ” Northern Bank when in June, 1908, that bank, the Riverside Bank and the Hamilton Bank were merged into a single institution called the Hamilton Bank of New York, which subsequently changed its name to the Northern Bank of New York. The trial court has found that H. Richter’s Sons did not have lawful notice or knowledge of the merger and that as to them it was, therefore, invalid and ineffectual; but has nevertheless held them liable as holders of fifty-five shares of stock in the “ new ” Northern Bank on the theory, as appears from the opinion, that they were estopped by long acquiescence from questioning the merger. Neither the findings nor the evidence justify such a conclusion. In addition to the findings as to lack of notice and knowledge, there are others to the effect that H. Richter’s Sons never gave up their certificate of stock in the “ old ” Northern Bank or received a certificate of stock in the “ new ” Northern Bank, or participated in or had knowledge of the conduct of the business of either of them, or ever stated to any one that they were stockholders in the “ new ” Northern Bank; and it appears by uncontradicted evidence that they did not learn of the merger until “ probably about a year ” after it took place — approximately eighteen months prior to the taking over of the Northern Bank by the Superintendent of Banks. Even though H. Richter’s Sons were carried on the books of the “ new ” Northern Bank as stockholders, it is clear that they were not stockholders in fact, for their consent, express or implied, was necessary to the creation of the relation (Glenn v. Garth, 133 N. Y. 18, 44), and while doubtless they might have waived the invalidity of the merger, I am of opinion that the facts proved fail to establish either express or implied consent, waiver or estoppel.
Plaintiff appeals from so much of the judgment as dismisses the complaint on the merits as against the defendants McCabe, Baron and Block. At the time of the closing of the Northern Bank, McCabe appeared upon its books as the owner and holder of thirty shares of its stock, which had been put in
Baron, at the time he bought the twenty shares standing in McCabe’s name, was the owner of fifty other shares and he still appeared as the record holder thereof when the bank closed. Prior to the latter date he sold all seventy shares to Robin, who was a director, and according to Baron’s testimony, which was not objected to, an officer of the Northern Bank. Subsequently he went to the Broadway branch of the bank to ascertain whether the transfer had been registered on the books. He saw Robin and the manager and assistant manager of the branch, and Robin directed the latter to make inquiry by telephone at the main office, where apparently the stock book was kept. The testimony is that the assistant manager did so and reported as a result of the telephone conversation that the stock had been transferred. It is manifest that Baron did all that could reasonably be required of him to effect the transfer and that by so doing he relieved himself from liability as a stockholder (Whitney v. Butler, 118 U. S. 655), and I see no reason why his acts should not operate to release McCabe likewise as to the twenty shares Baron purchased from bim. The plaintiff claims that Baron referred only to the fifty shares standing in his own name when he made his inquiry, but that is, I think, too narrow a construction of the evidence.
The conclusion reached as to Baron applies with equal force to the defendant Block. Robin purchased his stock some three months prior to the closing of the bank, told his attorney that it would be transferred on the books and a few days later in answer to the attorney’s inquiry assured him that the transfer had in fact been made.
It follows that the judgment so far as appealed from by the defendants H. Richter’s Sons should be reversed and the complaint and supplemental complaint dismissed as to them;
Clarke, P. J., Dowling, Page and Shearn, JJ., concurred.
On defendants Richter’s appeal, judgment reversed and complaints dismissed as to them; on plaintiff’s appeal, judgment reversed as to defendant McCabe, and judgment ordered as directed in opinion. In all other respects judgment affirmed. Plaintiff awarded costs against defendants Craig, Lauferty and McCabe; and defendants H. Richter’s Sons, Baron and Block awarded costs against plaintiff. The expense of printing record to be paid by plaintiff out of fund in his hands. Order to be settled on notice.