68 P. 806 | Or. | 1902
after stating the facts, delivered the opinion of the court.
Two questions are presented for our determination on this appeal: first, it is insisted that the court erred in overruling the defendant’s motion for a nonsuit; and, second, in holding that under the national bank act the authority to levy assessments upon the shareholders of a bank for the purpose of repairing its capital stock is vested in the shareholders themselves, and not in the directors.
In our opinion, the language of the section plainly implies that, upon receiving such notice, the association may elect to either continue in business by increasing the amount of the investment, or go into voluntary or involuntary liquidation, and, as this question affects the shareholders alone, they, and not the directors, are entitled to determine the course that shall be pursued. The individual liability of the shareholders in a national bank is fixed by statute at the par value of the stock held by each, in addition to the amount invested in such shares (section 5151), and does not arise except in case of liquidation and for the purpose of winding up the affairs of the institution. There is no legal obligation on their part to pay an additional assessment necessary to repair the capital stock, unless it is voluntarily authorized by them. Their only obligation, when notice is given by the comptroller of the currency of the impairment of the capital stock of the bank, is either to assess themselves and make up the deficiency, and thus increase their investment, or to go out of business, and, we think, the law contemplates that this right shall be exercised by them alone. If they desire and elect to continue in business they must make up the deficiency; but they are, in our opinion, at liberty to take the other alternative and allow the corporation to go into liquidation. The question is a federal one, and, .so far as we are advised, has never been directly passed upon by the Supreme Court of the United States. In Delano v. Butler, 118 U. S. 634 (7 Sup. Ct. 39), the court was called upon
In Hulitt v. Bell, 85 Fed. 98, the Circuit Court of the United States for the Southern District of Ohio, in an able and well-reasoned opinion by Judge Sage, held that an assessment levied by a board of directors of a national bank to make up a deficiency in its capital stock, under section 5205, was invalid, and not within the power of the directors, but should have been made by the shareholders themselves. After referring to the duties and powers of the directors as provided in