National Bank v. Case - 99 U.S. 628 (1878)
U.S. Supreme Court
National Bank v. Case, 99 U.S. 628 (1878)
National Bank v. Case
99 U.S. 628
1. A party who, by way of pledge or collateral security for a loan of money, accepts stock of a national bank which he causes to be transferred to himself on its books, incurs immediate liability as a stockholder, and he cannot relieve himself therefrom by making a colorable transfer of the stock with the understanding that at his request it shall be retransferred.
2. A national bank which had so accepted and caused to be transferred to it shares of stock of another national bank was, on the latter's becoming insolvent, sued as a stockholder. Held that a loan of money by a national bank on such security is not prohibited by law, and if it were, the defendant could not set up its own illegal act to escape the responsibility resulting therefrom.
3. The order of the Comptroller of the Currency prescribing to what extent the individual liability of the stockholders of an insolvent national bank shall be enforced is conclusive.
This is a bill brought by Frank F. Case, receiver of the Crescent City National Bank of New Orleans, against the stockholders of that institution to pay him seventy percent of the par value of the stock owned by them severally at the time when their respective liabilities were fixed by its insolvency, without regard to any pretended transfers of such stock as they may have attempted to make after the insolvency occurred. As to some of the defendants, the bill was dismissed; as to others, a decree was rendered conformably to the prayer of the bill, and a writ of execution awarded against them and their property to enforce the payment of the sums adjudged to be due by them respectively. Among the defendants against whom the decree was rendered was the Germania National Bank of New Orleans, Alcus, Scherck, & Autey, The Crescent Mutual Insurance Company, and Benjamin J. West. They thereupon appealed here.
The facts are stated in the opinion of the Court.