Keyser v. Hitz
133 U.S. 138 (1890)

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U.S. Supreme Court

Keyser v. Hitz, 133 U.S. 138 (1890)

Keyser v. Hitz

No. 42

Argued October 25, 28, 1889

Decided January 6, 1890

133 U.S. 138




After the passage of the Act of June 30, 1876, 19 Stat. 63, savings banks organized in the District of Columbia under an act of Congress and having a capital stock paid up in whole or in part were entitled to become national banking associations in the mode prescribed by Rev.Stat. § 5154.

A certificate signed by the Deputy Comptroller of the Currency as "Acting Comptroller of the Currency" is a sufficient certificate by the Comptroller of the Currency within the requirements of Rev.Stat. § 5154.

The record from the trial court must be taken in this Court as it was presented to the appellate court below, and an objection to it not made there will not be considered here.

A transfer of stock in a bank to a person without his or her knowledge or consent does not of itself impose upon the transferee the liability attached by law to the position of a shareholder in the association; but if, after the transfer, the transferee approves or acquiesces in it or in any way ratifies it (as for instance by joining in an application to convert the bank into a national bank), or accepts any benefit arising from the ownership of such stock, he or she becomes liable to be treated as a shareholder, with such responsibility as the law imposes in such case, and this liability is the same whether new certificates have or have not been issued to the transferee after the transfer.

Page 133 U. S. 139

The endorsement by the payee of a check which appears on its face to be drawn by the cashier of a bank in payment of a dividend due the payee as a stockholder estops him from denying knowledge of its contents or ownership of the shares.

A married woman in the District of Columbia may become a holder of stock in a national banking association and assume all the liabilities of such a shareholder although the consideration may have proceeded wholly from the husband.

The coverture of a married woman who is a shareholder in a national bank does not prevent the receiver of the bank from recovering judgment against her for the amount of an assessment levied upon the shareholders equally and ratably under the statute; but no opinion is expressed as to what property may be reached in the enforcement of such judgment.

The case is stated in the opinion.

MR. JUSTICE HARLAN, after stating the facts in the foregoing language, delivered the opinion of the Court.

This action is based upon an assessment made by the Comptroller of the Currency on the stockholders of the German-American National Bank of the City of Washington, which suspended business on the 30th day of October, 1878, and of which the plaintiff in error was app intend receiver. The assessment was upon the stockholders, equally and ratably, to the amount of one hundred percentum of the par value of their shares. It was averred in the declaration filed by the receiver that the defendant. Jane C. Hitz, held or owned at the time of the bank's suspension two hundred shares of its stock, of the par value per share of one hundred dollars, and that by reason thereof the plaintiff was entitled to recover from her the sum of twenty thousand dollars, with interest on each half of that sum from the dates they should have been respectively paid under the notice given by the receiver.

The defendant pleaded first that she was never indebted as alleged; second, that she never at any time held or owned shares of stock in this bank, and, if it appeared upon its books or otherwise that any of the stock stood in her name, the entries to that effect were fraudulent, and were made for the

Page 133 U. S. 140

purpose of cheating her; third, that since August 15, 1856, she has been the wife of John Hitz. She filed an additional plea averring that there was not, nor had ever been, any such national banking association as the German-American National Bank, of which the plaintiff was receiver, meaning by this plea that no such association was ever organized in conformity with the statutes of the United States.

There was evidence before the jury tending to establish the following facts:

In the year 1872, certain persons, among whom was John Hitz, the husband of the defendant, availed themselves of the provisions of the Act of Congress of May 5, 1870, relating to the creation of corporations in the District of Columbia by general laws, as amended by the Act of June 17, 1870, and formed a corporation by the name of the "German-American Savings Bank of the City of Washington." 16 Stat. 98, 102, c. 80; ib., p. 153, c. 131.

There appears under date of January 21, 1876, upon the books of that bank, labeled "stock Transfers and Ledger, German-American Savings Bank," entries showing the assignment and transfer to Jane C. Hitz of shares of stock, as follows: 173 shares by John Hitz, 10 shares by William F. Mattingly (the latter acting by Samuel L. Mattingly, attorney), 10 shares by R. B. Donaldson, and 7 shares by C. E. Prentiss; in all, 200 shares. At the time these transfers purport to have been made, John Hitz was President of the bank, Donaldson vice-president, and Prentiss cashier, and they, with Mattingly and others, were its trustees. The stubs in the book of transfers state that new certificates for all the above stock were issued to Mrs. Hitz, but it was not distinctly shown that they were delivered to her or were ever in her possession. It was, however, proven that the fourth dividend upon these shares, amounting to $800, was paid by the check of Prentiss, the cashier of the savings bank, dated May 1, 1876, which was in these words:

"Pay to Jane C. Hitz or order $800, fourth dividend, payable this day on stock standing in her name on the books of this bank, and charge to dividend account No. 3,300."

That check was endorsed: "Pay to the order of John

Page 133 U. S. 141

Hitz. Jane C. Hitz." Then follows this endorsement: "John Hitz , Consul General," showing, as stated by Prentiss, that the proceeds of the check were deposited by John Hitz to his account in the bank as consul general. Similar checks were made for the fifth and sixth dividends on the same stock. They were payable, respectively, November 1, 1876, and November 1, 1877, and were endorsed in the same way as was the first check. As in the case of the first check, their proceeds were placed to the credit of John Hitz as consul general.

Among the original papers on file in the office of the Comptroller of the Currency were the following:

1. A document dated May 7, 1877, purporting to be signed by the stockholders of the German-American Savings Bank of Washington, then having a capital of $127,100, and to authorize the trustees thereof -- John Hitz and others named -- to convert that bank into a national banking association by the name of the "German-American National Bank of Washington," and make the articles of association and the organization certificate required by the statutes of the United States. Under the headings in that document of "Names of Stockholders" and "No. of Shares Owned by Each" appear, among other names, those of John Hitz, 130 shares; R. B. Donaldson, 90 shares; W. F. Mattingly, 190 shares; C. E. Prentiss, 61 shares; John Hitz, trustee, 25 shares; John Hitz and C. E. Prentiss, trustees, 81 shares, and Jane C. Hitz, 200 shares.

2. The organization certificate, signed by the trustees and verified by their oath, stating that they have been authorized by the stockholders of the German-American Savings Bank to change it into a national banking association, the stock of which be divided as it was then divided in the savings bank. That certificate contains a statement of the names, residence, and number of shares held by each stockholder of the savings bank, and in the list appears the name of Jane C. Hitz as holding 200 shares. It bears date May 7, 1877, and was filed with the Comptroller of the Currency May 13, 1877.

3. The articles of association of the German-American National Bank of Washington, which is accompanied by the certificate

Page 133 U. S. 142

of J. S. Langworthy, as Acting Comptroller of the Currency, under date of May 14, 1877, stating that that bank had complied with all the provisions of the Revised Statutes relating to national banking associations and was authorized to commence business as provided in section 5169 of the Revised Statutes. The national bank had the same officers and trustees as the savings bank.

No direct proof was made by the plaintiff that the signature purporting to be that of the defendant on the above checks for dividends was her genuine signature.

In reference to the stock of the German-American Savings Bank which, according to the entries in its books, was transferred by Mr. Mattingly, the latter, as a witness for the defendant, testified that he owned stock in that bank, but that he had never transferred any of it; that he never owned and did not himself transfer ten shares of stock to Mrs. Hitz, and that he did not purchase those shares, and did not know how they happened to stand in his name, although he supposed his brother, who executed the transfer in the witness' name, understood how it all occurred.

Mr. Donaldson testified for the defendant that while he signed a transfer of ten shares of stock to Mrs. Hitz, he had no recollection whatever of the transaction; that he never owned the stock so transferred, and was never paid for it by anyone.

Mrs. Hitz testified in her own behalf. The substance of her testimony was that she never bought, owned, or voted any stock in the German-American Savings Bank or in the German-American National Bank; never knew until after the failure of the national bank that her name appeared among the stockholders on the books of either bank; never received any dividend declared or paid by either, and never received or held any certificates of stock in either bank. Being asked as to whether the signature of Jane C. Hitz to the paper purporting to be signed by the stockholders of the German-American Savings Bank and authorizing its conversion into a national banking association was her signature, she answered in substance that she knew nothing of that paper; did not remember to have signed it, although the signature resembled

Page 133 U. S. 143

hers; was not aware of the conversion of the savings bank into a national bank until after the failure of the latter; and, as she never owned any of this stock, she would not have signed any paper for such change if she had been asked to do so. Being shown the checks for dividends on the stock standing in her name, she stated that she had no recollection of seeing them until after the failure of the German-American National Bank. Again:

"Q. What do you say as to the signature -- did you write it?"

"A. I cannot say."

"Q. Did you ever get any money on a count of those checks?"

"A. I never did."

"Q. Those checks appear to have been paid. Do you remember whether you ever had them in your possession or not?"

"A. No sir; I never had them in my possession."

"Q. What do you say?"

"A. I am certain I never had them in my possession."

"Q. Can you account to the jury for the similarity of that signature to your own?"

"A. I cannot."

"Q. Do you say you never wrote your name on the back of those checks?"

"A. No, sir; I cannot say that. I have no recollection of having done so. I never did so knowing the nature of the checks; never did so at all, so far as I can recollect."

Upon cross-examination:

"Q. You are unable to deny that that is your signature?"

"A. I cannot positively deny that it is."

"Q. Can you deny at all that that is your signature?"

"A. I can deny having any recollection of having signed them."

"Q. Can you deny that it is your signature? A."

"A. I cannot deny it."

"Q. Now I will ask you whether, when you were in Europe, the salary of your husband as consul general was not paid to you?"

"A. It was during part of the time that I was there."

"Q. To what did that salary amount?"

"A. I think, $3,000."

Upon reexamination, the defendant was permitted, against the objection of the plaintiff, to state that she thought it would be impossible for her to have owned $20,000 of stock in the German Savings Bank and not have remembered it. Being asked whether, if she had seen the checks, she could have forgotten them, she said: "Had I seen them, knowing what they were, I should not have forgotten them -- could not have forgotten them."

Page 133 U. S. 144

The foregoing is substantially the case made before the jury.

Before entering upon the examination of the questions raised by the plaintiff's assignments of error, it is necessary to consider certain propositions advanced by the defendant which, if sound, might be sufficient to dispose of the case.

It is contended that the conversion of the German-American Savings Bank into a national banking association was unauthorized by any statute of the United States, and consequently that the appointment by the Comptroller of the Currency of the plaintiff as receiver, and the assessment made by that officer upon the stockholders of the bank -- which assessment is the foundation of the present suit -- were absolute nullities.

The privilege of becoming a national banking association is given by section 5154 of the Revised Statutes to "any bank incorporated by special law, or any banking institution organized under a general law of any state." These words, it is argued, do not embrace savings banks organized in the District of Columbia, and only refer to banks or banking institutions created under the authority of some state, either by a special or general law. But all difficulty upon the subject is removed by the act of Congress entitled "An act authorizing the appointment of receivers of national banks, and for other purposes," approved June 30, 1876, the sixth section of which is as follows:

"That all savings banks or savings and trust companies organized under authority of any act of Congress shall be and are hereby required to make to the Comptroller of the Currency and publish all the reports which national banking associations are required to make and publish under the provisions of sections fifty-two hundred and eleven, fifty-two hundred and twelve, and fifty-two hundred and thirteen of the Revised Statutes, and shall be subject to the same penalties for failure to make or publish such reports as are therein provided, which penalties may be collected by suit before any court of the United States in the district in which said savings banks or savings and trust companies may be located. And all savings or other banks now organized or which shall

Page 133 U. S. 145

hereafter be organized in the District of Columbia under any act of Congress which shall have capital stock paid up in whole or in part shall be subject to all the provisions of the Revised Statutes and of all acts of Congress applicable to national banking associations, so far as the same may be applicable to such savings or other banks, provided that such savings banks now established shall not be required to have a paid-in capital exceeding one hundred thousand dollars."

19 Stat. 64.

Under that act, the German-American Savings Bank was required to make to the Comptroller of the Currency the reports which by sections 5211, 5212, and 5213 of the Revised Statutes were required from national banking associations. It also became subject to all the provisions of the Revised Statutes and of the acts of Congress relating to national banking associations, so far as those provisions were applicable to a savings bank organized in this District. It is too clear for dispute that after the passage of the act of 1876, savings banks organized in this District under an act of Congress, and having a capital stock paid up in whole or in part, were entitled to become national banking associations in the mode and subject to the conditions prescribed by section 5154. Surely that section cannot be deemed inapplicable to savings banks of that class.

Another contention of the defendant is that the German-American National Bank could not acquire the powers and privileges of a national banking association before receiving from the Comptroller of the Currency a certificate that the provisions of the statute relating to such associations had been complied with and that it was authorized to commence the business of banking; that the certificate given under date of May 14, 1877, by J. S. Langworthy, as "Acting" Comptroller of the Currency, did not meet the requirements of the statute, because, it is argued, there was no such officer known to the law. Rev.Stat.

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