1. Where, in order to discharge the liabilities of an insolvent
national banking association, the Comptroller of the Currency
assessed against the several shareholders a sufficient percentage
upon the par value of the stock by them respectively held, he has
no power to direct a further assessment to supply the deficit
caused by the inability of the receiver to enforce payment from
such as are insolvent or beyond the jurisdiction.
2. "In addition to the amount invested in the shares," the
holders thereof, after the exhaustion of the assets of the
association, are, to a sum not exceeding the par value of the
shares, "individually responsible, equally and ratably, and not one
for another," for its outstanding debts. The liability is several,
and is not affected by the failure of any other shareholder to pay
the amount assessed against him.
The facts are stated in the opinion of the Court.
MR. JUSTICE SWAYNE delivered the opinion of the Court.
This case is a petition for a writ of mandamus directed to the
Comptroller of the Currency. It was fully heard in the
Page 102 U. S. 423
court below upon the merits. The writ was refused and judgment
for costs rendered against the relator, the Citizens' National Bank
of Louisiana. This writ of error was thereupon sued out, and the
case is thus brought before us for review.
There is no controversy as to the facts. The only question
presented for our consideration is a question of law. The case made
in the record, so far as it is necessary to be stated for the
purposes of this opinion, is as follows:
On the 7th of April, 1874, the Crescent City National Bank of
New Orleans was, and for some time had been, insolvent and in the
hands of a receiver. On that day, the Comptroller assessed each
shareholder seventy percent upon the par value of each share of his
stock and ordered the receiver to collect the assessment. This the
receiver proceeded to do by filing a bill in equity in the Circuit
Court of the United States for the District of Louisiana against
all the shareholders. Thereafter he obtained a decree against all
the defendants severally who were within the jurisdiction of the
court for the amount due from each one according to the assessment,
and the cause was thereupon continued to await any further
assessment the Comptroller might deem it proper to make, and it is
still pending.
The capital stock of the bank was $500,000; seventy percent,
therefore, was $350,000.
This sum, if it could have been collected in full, would have
paid all the debts of the bank and left a balance over. But by
reason of the insolvency of many of the shareholders, the
assessment netted only $112,658.13, and nothing, or very little
more, will hereafter be realized from it. From the proceeds of the
assessment and other assets of the bank, eighty percent of the
principal of its debts have been paid.
The relator, being a large creditor of the bank, requested the
Comptroller to order a further assessment of thirty percent upon
each share of the capital stock for the discharge of the balance of
principal and interest still due to its creditors, and to direct
the receiver to proceed as before to collect the amount of the new
assessment. The Comptroller refused, because the enforcement of
such an assessment would compel the solvent shareholders to pay the
sums and proportions due from the shareholders who are
insolvent.
Page 102 U. S. 424
He holds that no such liability is imposed on the solvent
shareholders, and that he has therefore no right or power to make
the assessment as requested.
The point to be decided is whether he is clothed with this power
and duty, and whether the shareholders are thus liable.
The first bank law was passed Feb. 25, 1863, c. 58, 12 Stat.
665. The last clause of sec. 12 is as follows:
"For all debts contracted by such association for circulation,
deposits, or otherwise, each shareholder shall be liable to the
amount of the par value of the shares held by him, in addition to
the amount invested in such shares."
This provision was changed in 1864, and has been since and is
now in force in these terms:
"The shareholders of every national banking association shall be
held individually responsible, equally and ratably, and not one for
another, for all contracts, debts, and engagements of such
association, to the extent of the amount of their stock therein, at
the par value thereof, in addition to the amount invested in such
shares."
Rev.Stat., sec. 5151.
The act of 1863 made no provision for enforcing the personal
liability of shareholders, while that of 1864 provided that it
might be done through a receiver appointed by the Comptroller and
acting under his direction.
Id., sec. 5234.
The difference between the clause creating the individual
liability as it was originally and as it was after it was amended
and altered is obvious and striking. The change was plainly made
ex industria, to prevent the possibility of doubt as to
the meaning of Congress. What the effect of the clause would have
been without the change is a point we are not called upon to
consider. The charter of a private corporation is a contract
between the lawmaking power and the corporators, and the rights and
obligations of the latter are to be measured accordingly.
By the common law, the individual property of the stockholders
was not liable for the debts of the corporation under any
circumstances. Here, the liability exists by virtue of the statute
and the assent of the corporators to its provisions, given by the
contract which they entered into with Congress in accepting the
charter. With respect to the character of that
Page 102 U. S. 425
liability, it is entirely clear from the language employed in
creating it that it is several, and cannot be made joint, and that
the shareholders were not intended to be put in the relation of
guarantors or sureties, "one for another," as to the amount which
each might be required to pay.
In the process to be pursued to fix the amount of the separate
liability of each of the shareholders, it is necessary to ascertain
1, the whole amount of the par value of all the stock held by
all the shareholders; 2, the amount of the deficit to be
paid after exhausting all the assets of the bank; 3, then to apply
the rule that each shareholder shall contribute such sum as will
bear the same proportion to the whole amount of the deficit as his
stock bears to the whole amount of the capital stock of the bank at
its par value. There is a limitation of this liability. It cannot
in the aggregate exceed the entire amount of the par value of all
the stock.
The insolvency of one stockholder, or his being beyond the
jurisdiction of the court, does not in any wise affect the
liability of another, and if the bank itself, in such case, holds
any of its stock, it is regarded in all respects as if such stock
were in the hands of a natural person, and the extent of the
several liability of the other stockholders is computed
accordingly.
Crease v. Babcock, 10 Metc. (Mass.) 525.
These rules have been applied in several well considered
judgments of other courts, where the words we have italicized were
not in the statutes upon which they proceeded. We have found no
case in conflict with them.
See Crease v. Babcock, supra;
Atwood v. R. I. Agricultural Bank, 1 R.I. 376;
In the
Matter of the Hollister Bank, 27 N.Y. 393;
Adkins v.
Thornton, 19 Ga. 325;
Robinson v. Lane, id., 337;
Wiswell v. Starr, 48 Me. 401.
See also Morse on
Banking 503.
Although assessments made by the Comptroller, under the
circumstances of the first assessment in this case and all other
assessments, successive or otherwise, not exceeding the par value
of all the stock of the bank, are conclusive upon the stockholders,
yet if he were to attempt to enforce one made, clearly and
palpably, contrary to the views we have expressed, it cannot be
doubted that a court of equity, if its aid were invoked, would
promptly restrain him by injunction.
Page 102 U. S. 426
Nothing in this opinion is intended in any wise to affect the
authority of
Kennedy v. Gibson and
Others, 8 Wall. 498, and
Casey v. Galli,
94 U. S. 673. On
the contrary, we approve and reaffirm the rule laid down in those
cases.
The Comptroller decided correctly as to his duty in this
case.
Judgment affirmed.