A sold to B shares in a national bank, and signed a transfer on
the books of the company, leaving the name of the transferee blank.
After it was known that the bank was embarrassed, B sold the shares
to C, an irresponsible person, and filled his name in the blank. A,
being subsequently adjudged liable as shareholder under the
National Banking Law in a suit brought by the receiver, paid the
judgment and brought suit in the Supreme Court of Louisiana against
B for neglect of duty in failing to insert his name in the
transfer.
Held that the case did not arise under the
National Banking Act, and that therefore no federal question was
involved.
Page 123 U. S. 522
The case is stated in the opinion of the Court.
MR. CHIEF JUSTICE WAITE delivered the opinion of the Court.
At the hearing of this cause, a motion was made to dismiss the
writ of error for want of jurisdiction on the ground that no
federal question was involved in the decision below. This motion
will be first considered.
The facts as disclosed by the record are as follows:
On the 24th of February, 1873, Le Sassier & Binder sold to
Samuel H. Kennedy at New Orleans, through his broker, E. C.
Feinour, forty shares of the capital stock of the Crescent City
National Bank, and, in accordance with the prevailing custom at
that place upon such sales, signed a transfer of the shares sold
upon the transfer book of the bank, leaving the name of the
transferee blank. On the 15th of March, Kennedy sold the same stock
to Thomas A. Adams, a responsible person, but at the request of the
purchaser, the transfer on the books of the bank was made to Morris
Dyer, who was irresponsible, by writing his name in the blank left
for the name of the transferee in the assignment which had been
signed by Le Sassier & Binder. The bank was known to be
embarrassed March 14th, and on the 17th of that month it closed its
doors, and soon afterwards a receiver was appointed, under the
National Banking Act, by the Comptroller of the Currency. On the
first of August, 1874, the receiver, by direction of the
Comptroller, brought a suit against the shareholders, to enforce
their individual liability for the debts of the bank, under ยง 5151
of the Revised Statutes. To this suit Kennedy was made a party as
the holder of the shares which had been sold to him at above. He
appeared and filed an answer, setting up his sale to Adams as a
defense. Upon the hearing, a final decree was rendered
Page 123 U. S. 523
June 2, 1876, dismissing the bill as to him. A suit was then
brought by the receiver against Le Sassier & Binder, alleging
that they were the owners of the stock at the time of the failure
of the bank. They notified Kennedy that this suit had been begun
and that if their defense failed, they should fall back on him, and
hold him for whatever amount they might be compelled to pay "on
stock which, from February 24, 1873, they had ceased to own and had
transferred to him." In the answer of Le Sassier & Binder, they
set up the sale to Kennedy as a defense to the action. At the final
hearing, a judgment was rendered against them on the pleadings and
proofs, May 16, 1879, for $2,800, and interest at five percent per
annum from July 23, 1874. This judgment they paid, and then brought
the present suit against Kennedy to recover from him the amount of
their payment. In the petition it was alleged that, upon the sale
of the stock to Kennedy and the signing of the transfer on the
books of the bank, it became his duty to insert his name in the
blank left for that purpose, and that they had been compelled to
pay the judgment in favor of the receiver
"owing to the conduct of the said Kennedy in not causing his
name to be inserted in the transfer book aforesaid as transferee of
said stock, and preserving in said transfer book of said bank,
contrary to his obligation and duty, the said transfer in blank,
with your petitioners' name signed thereto, from the time of said
sale to him until said . . . bank failed, and owing to the other
acts of the said . . . Kennedy in the premises by which he
subjected your petitioners to a liability which was his own, and
which he should have met; that his said conduct and acts were
violative of his obligations in the premises and your petitioners'
rights, were unlawful, illegal, and have caused to your petitioners
loss and damage to the extent of . . . said amount paid by
them."
From this statement of the case it is apparent that the suit was
not brought against Kennedy to enforce any liability of his under
the National Banking Act. That liability was disposed of in the
suit of the receiver against him for its enforcement. Neither do Le
Sassier & Binder claim under the
Page 123 U. S. 524
receiver, nor are they seeking to enforce the liability of
Kennedy as a shareholder. Their claim, and their only claim,
against him is for his failure to insert his own name or that of
some other responsible person in the blank which had been left by
them in the transfer they signed on the books of the bank for the
stock he had bought. His obligation to them, if any there is, grows
out of his contract with them as a purchaser, and not out of the
banking law. That presents no federal question. There is nothing in
that law which makes it his duty to save his assignors from harm by
reason of their former ownership, or which required him to register
his ownership for their protection.
Neither is it at all important that, in its opinion, the supreme
court of the state expressed a doubt as to the correctness of the
judgment against Le Sassier & Binder. That judgment, as it
stood, was conclusive on that point, and if Kennedy had been liable
to them at all, it would have been for the amount adjudged, because
he had been called upon to defend if he desired to do so. He was
discharged not because the judgment was wrong, but because he had
not, in the opinion of the court, been guilty of any neglect of
duty toward those against whom it was rendered, which would make
him liable to them therefor.
The motion to dismiss is granted.