1. When the purchaser of stock of a national bank receives from
the seller the certificates properly endorsed, title passes and the
transfer is complete as between the parties, and, as between them,
the purchaser alone becomes liable for assessments thereafter
imposed on the shares. P.
280 U. S.
498.
Page 280 U. S. 497
2. The actual owner of stock of a national bank may be held for
an assessment thereon although his name does not appear upon the
transfer books of the bank. P.
280 U. S.
499.
3. One who in good faith purchases stock of a national bank with
the intention of making a gift thereof to his minor children, and
causes the transfer to be made to them upon the books of the bank
and certificates to be issued in their names, is nevertheless
liable for assessments on the stock made subsequently for the
benefit of creditors when the bank becomes insolvent, since the
transferees, being minors, are without legal capacity to assume the
obligation, and the transfer, having resulted to their
disadvantage, will be avoided for them by the law. P.
280 U. S.
499.
4. One who purchases stock of a national bank with his own money
as a gift for his minor children, and causes the certificates to be
issued and registered in their names, does not become a trustee for
the minor. P.
280 U. S. 500.
Answer to a question certified by the circuit court of appeals
on an appeal from a judgment for the respondent, who resisted
payment of an assessment on shares of national bank stock.
MR. JUSTICE SUTHERLAND delivered the opinion of the Court.
The court below has certified to this Court the following
question of law upon which instruction is desired:
"Is one who purchases shares of stock of a national bank liable
for an assessment subsequently imposed by the Comptroller of the
Currency upon the stock for the benefit of the creditors of the
bank after the insolvency thereof when it appears that the
purchaser bought the stock from the registered holder thereof and
received a certificate therefor endorsed in blank by the holder,
with
Page 280 U. S. 498
intent at the time of such purchase and delivery of giving the
stock to his minor child, but without knowledge at that time of the
failing condition of the bank, or intent to avoid the stockholder's
liability, and when, after the acceptance of the endorsed
certificate from the seller, and before the insolvency, the
purchaser with like knowledge and intent, promptly presents the
certificate to the bank, causes the shares to be registered and a
new certificate to be issued in the child's name?"
The suit was brought to recover the amount of an assessment upon
19 shares of the capital stock of the bank ordered by the
Comptroller of the Currency because the assets of the bank were
insufficient to pay creditors. Richardson had purchased the stock
and received three certificates therefor indorsed in blank by the
seller. He delivered these certificates to the bank with verbal
instructions to register the stock and issue two new certificates
for 16 shares in the name of his minor son, and another one for 3
shares in the name of his minor daughter. This was done, the new
certificates being retained in the custody of the bank.
When Richardson bought the stock and received the certificates
therefor, indorsed by the seller, title passed, and the transfer
was complete as between the parties.
Johnston v. Laflin,
103 U. S. 800,
103 U. S. 804.
Thereupon, as between seller and purchaser, the purchaser alone
became liable for any assessment thereafter imposed, for, as
between them, it would be in disregard of all equitable principles
to continue against the seller the burdens of ownership after the
purchaser had become entitled to all the benefits, including the
receipt of dividends. Whether, under the facts, the liability of
the seller continued as between him and the creditors is a
different matter not necessary to be considered, for, in any event,
the purchaser, who alone is sued, is not concerned with that
question.
Page 280 U. S. 499
That the actual owner of the stock may be held for the
assessment, although his name does not appear upon the transfer
books of the bank, is well settled.
Ohio Valley National Bank
v. Hulitt, 204 U. S. 162,
204 U. S.
167-168;
Davis v. Stevens, 17 Blatchf. 259,
s.c. 7 Fed.Cas. 177, 178;
Case v. Small, 10 F. 722, 724;
Houghton v. Hubbell, 91 F. 453.
The real question is whether the intent of Richardson to buy the
stock for his minor children, and the fact that, by his direction,
the transfer was made to them upon the books of the bank and
certificates issued in their names, had the effect of relieving
Richardson from liability. We think not, since the transferees,
being minors, were without legal capacity to assume the obligation.
Upon coming of age, they would have an election either to affirm or
avoid the entire transaction. In the meantime, the transfer of the
stock having resulted to their disadvantage, the law will avoid it
for them, thus leaving the liability of Richardson for assessments
unaffected.
See Aldrich v. Bingham, 131 F. 363;
Foster
v. Chase, Foster v. Wilson, 75 F. 797.
In
Foster v. Chase, supra, the father bought stock in
the names of his minor children, and suit was brought against him
for the amount of an assessment. Disposing of the point here
presented, the court well said:
"The plaintiff claims that the defendant made himself liable for
the assessment because of the incapacity of his children to take
the stock and make themselves liable for it. He insists that they
only are the shareholders, and liable, if anyone is. Assent is
necessary to becoming a shareholder, subject to this liability, in
a national bank.
Keyser v. Hitz, 133 U. S.
138. Minors do not seem to have anywhere the necessary
legal capacity for that. The principles upon which this disability
rests are elementary and universal. 1 Bl.Comm.
Page 280 U. S. 500
492; 2 Kent Comm. 233. In buying and paying for this stock, and
having it placed on the books of the bank, the defendant acted for
himself; in having it placed there in the names of his children, as
with their assent, he assumed to act for them. As they could not
themselves so assent as to be bound to the liabilities of a
shareholder, they could not so authorize him to assent for them as
to bind them. To the extent that they could not be bound he acted
without legal authority, and bound only himself. Story, Ag. ยง
280."
There is no merit in the point, made in argument, that
Richardson was a trustee for the minors, even if that would enable
him to avoid personal liability,
Johnson v. Laflin, 5
Dill. 65, 82, and there is nothing certified by the court below
which furnishes a basis for the suggestion. Richardson, having
bought with his own money, became the owner of the stock. And
although the purchase was made with the intent of giving the stock
to his children,
non constat that he would not change his
mind, as he was perfectly free to do. The new certificates simply
were issued and registered in the names of the children, and this,
if effective, would have resulted only in consummating an ordinary
gift. It no more created a trust than if the donees had been
persons
sui juris. The question must be answered in the
affirmative.
It is so ordered.