Anderson v. Abbott - 321 U.S. 349 (1944)
U.S. Supreme Court
Anderson v. Abbott, 321 U.S. 349 (1944)
Anderson v. Abbott
Argued February 8, 1943
Reargued January 12, 13, 1944
Decided March 6, 1944
321 U.S. 349
1. Upon the facts, held that shareholders of a bank stock holding company were liable for an assessment on shares of a national bank in the portfolio of the holding company. Construing Federal Reserve Act, § 23; National Bank Act, § 12. P. 321 U. S. 356.
So held of shareholders who acquired their holding company shares by purchase as well as of others who acquired their holding company shares by transfer of bank shares.
2. A judgment against the holding company in a prior suit by the receiver of the national bank was not res judicata of the claim against the shareholders of the holding company for the balance due on the assessment. Nor, by instituting the prior suit against the holding company, did the receiver make an election which barred the subsequent proceeding against the shareholders of the holding company. P. 321 U. S. 354.
3. Findings in which the District Court and the Circuit Court of Appeals concurred, and in respect of which no clear error is shown, accepted here. P. 321 U. S. 356.
4. Where a transferor of shares of a national bank retains, through his transferee, his investment position in the bank, including control, he cannot escape the statutory liability if his transferee does not have resources commensurate with the risks of those holdings. In such case, the transferor remains liable as a "stockholder" or "shareholder," within the meaning of the applicable statutes, to the extent of his interest in the underlying shares of the bank. This result is necessary lest the protection afforded by the double liability provisions be lost through transfers to impecunious or not fully responsible holding or operating companies whose stock is owned by the transferor. P. 321 U. S. 357.
5. Whether the transfer is made in avoidance of the double liability or for business reasons which may be considered wholly legitimate, the result is the same, since, in either event, depositors are deprived of the benefit of double liability. P. 321 U. S. 357.
6. The holding company device here used could be so readily utilized to circumvent the statutory policy of double liability that the stockholders of the holding company, rather than the depositors of the subsidiary banks, must take the risk of the financial success of the undertaking. P. 321 U. S. 359.
7. Stockholders of the holding company are bound by the decision of the directors which determined, within the scope of the corporate charter, the kind and quality of the corporate undertaking. P. 321 U. S. 361.
8. That stockholders of the holding company may have claims against an officer or director for mismanagement does not relieve them from liability to the depositors of the subsidiary banks. P. 321 U. S. 361.
9. The question of the liability of shareholders of a holding company for assessments in respect of national bank shares held by it is a federal question, unaffected by the law of the incorporation of the holding company. P. 321 U. S. 365.
10. The innocence and good faith of investor in the holding company are not available to them as defenses in this suit. P. 321 U. S. 366.
11. Courts will not allow the interposition of a corporation to defeat a legislative policy. P. 321 U. S. 362.
12. The liability of the shareholders of the holding company is to be measured by the number of shares of stock of the national bank, whether several or only fractional, represented by each share of stock of the holding company, and the assessment liability of each share of stock of the holding company must be a like proportion of the assessment liability of the shares of the bank represented by the former. P. 321 U. S. 368.
127 F.2d 696 reversed.
Certiorari, 317 U.S. 619, to review the affirmance of a judgment dismissing the complaint, 32 F.Supp. 328, in a suit by a receiver of a national bank against shareholders of a holding company to recover the balance of an assessment of double liability on shares held by the holding company.