348-WASSON v. GASTETTER7 [187 WASSON v. CAS ' TETTER. • 4-2975 Opinion delivered May o l, 1933. 1. BANKS AND BANKING—COLLECTION OF . ASSESSMENT.—In a -suit by the Bank Commissioner to collect an assessment on the stock of an insolvent bank, the stockholder cannot question the necessity for the levy. 2. BANKS • AND BANKING—INSOLVENCY—LIABILITY OF STOCKHOLDERS. —One who purchases. bank stock by giving his note repeatedly renewed and applying the dividends to payment of interest and permitting his name to appear as stockholder on the county records for 11 years, held estopped to deny liability for assessment on such stock.
ARK.] WASSON V. CASTETTER. 349 Appeal from Craighead' Circuit Court, Jonesboro bistrict ; Basil Baker, Special Judge; reverSed: STATEMENT BY THE COURT. • This ai p peal is prosecuted from a judg ent against the Bank * Commissioner in his suit'against certain stela-holders 'of an insolVent bank; holding them , not liable for the payMent Of the double assessment of stock levied by the Bank Conamissioner: . ' It aip Pears that appellee§ became Stockholders in the Bank of Jonesboro in May, 1930;,upon an increase of the Capital stock of the bank, said parties giving notes in paynient of their stock. The notes bad been renewed every six months until thd bank Closed in DeCeraber, 1931, and the dividends received from the stock were used to pay interest on the nOteS. ' The stock was issued to and indorsed by the stockholders and deliyered to the bank as collateral security for the payment of' the notes pinned thereto. The names of theSe stockholders , were shOwn after , their jinrchase of the stoek as stockholders of the bank On the records of' Craighead County. In this snit tO colldct the stock assessment levied 1:33i the Bank Commissioner, judgment was rendered in favor of the defendants on the ground that sfock issued for a note was -void and could not . create any legal liability against the holders Of said stock to pay §uch asseSsMent. Copies of the aSsessment and demand were attached as exhibits to the complaint against appellee, Castetter, and judgment prayed for '$500'cVith 6 'per, Cent. interest' from December 30, 1931. , The assessment §hoWed it-had been levied for $200,- 000 . against the stockholders of the-bank for which demand was made of each stoCkholder of $251)er shard: Exhibit B was A ticitice to Castetter ealling on him to pay his : assessment of $25 ier share. , The afiSWer denied that Castetter was the oWner 'of ariy' shares of stOek . in 'the bank;'and that he became indebted because Of any , assessment- thereon in any admitted the' alleged stockholders' meeting' for the in-' crease of the capital stOck 'from $160;000 to $200,000, that the bank's . officers attempted to' sell such additional shares, and that he executed to the Bank of Jonesboro his
350 - WASSON 71.-- CASTET-TEk. -_ [187 notes foe-the purchase price Of. 20 shares: of said new stock but paid ncr cash therefor, and,said stock was issued but never delivered to defendant, and was pihned to his note as collateral to secure the_ purchase price: of the stock, which . had :been renewed from. time to time.. He further alleged that the issuance .of such additional stock and attempted sale to him was , void. and in violation Of. § 8, art. 12, of the Constitution, and § 6821, Crawford &. Moses' Digest, and that the stock was void and not , subject to assessment against him.. . - The case against the -other appellee contained like allegations of pleadings, and:the same answer was, set up. . An amendment to the answer was filed relative to the meeting for increasing the capital stock,. that the de7 fendant never received any:dividends on the stock personally since, the dividends were . : credited on _the certificates of , stock kept. by the bank; admitted the execution of renewal note for $2,500, ,Which was the twenty-,second renewal of the• original note, which had, been- renewed every six months after its execution, :and all dividends paid . were credited on the interest on said note. .A . general dernhirer was . filed f6 . the answer as amended, and the . cases were 'cOnsolidated : for..trial, and the demurrer Was • Overruled; the 'parties agreeing to Stand upon the . pleadings, and, plaintiA refusing. to plead fur: ther, the complaints We're dismissed, and the apPeal, comes from that ordei. Archer .Wheatley, for . appellant. , Horace Sloax, for appellee. • • .. KritsY,. J.:, (after; stating the facts)... The only question for determination involved . in this appeal is, whether one , who has purchased bank stock. by giving a notd in payment therefor can defeat an assessment thereon eleven years later after having renewed the note twenty-- two times and used the dividends thereon for the : payment of interest 'on the, note, and . further having permitted his name to. appear as, a stockholder of the ,bank on the records . of the county. for eleven . years. , The action of the Bank Commissioner under the statute is conclusive as to the necessity for the levy of the stock assessment and cannot be disputed . or _defended
ARk.] WASSON V. CASTETTBR. 351 against by the stockholder• of the failed •bank Davis v. Moore, 130 Ark, 128,197 S..W. 295 ;- Aber v. Maivell, 140 Ark.. 203. , 215-S. W. .389; Fee-v. -Taylor, ante p. 204. • • Appellee insistS : that the -sale -of stock to . him •was void, it being. made . On• a -credit and not "for money or property actually-received or labor done," as required' hy the Constitution, § 8,•:art.•-12; and that this • court has already determined:the questiOn in Taylor v. Gordon, 180 Ark. 753, 22 S. W. (2d) 561 . ,. wherein 'it held that. the -purchaser Of • such stock or owner-thereof is not subject to lia:bility • to the payment of the double Stock- assessment levied against it by-the-thank commissioner: . - • • Section 8,-: article 12, •of the 'Constitution -provides.: "No • private . cororation Shall • issue stock&Oi , 'bonds, eXcept- for money or property 'aettially 'received -or labOr Ilene, and all fictitiVas'inereaSe Of to& Or indebtedneSs shall' be -Vold ; nor Shall the steek - or bonded indebtedneSS of any , priVate CorporatiOn be inereasedexcept . liar: suance of-general lawS,` . nor • until- the' conSent of 'theper-sdns hOlding : the larger':amennt Value'of • StoOk*.shall be obtained at a':ineetinglieleaf ter notice' giVeri period of notjesS-thanSixty days', 'in 'pursuance Of • The statute, § -702, tr a. *foi'd''8' 5 Mose' §'`Digesi;' an-theri2ing the 'asSessinent against 'stock by the lUnk corn-inisiOner, reads • • "The steckholderS ' of every , bank doing bUSiness in this" 'State 'shall be . held . indiidnally responsible eCtuallY and • ratablY and not One for anether, 'ffir ail contracts, de'bts and engagenierits of:Such, bank' to the extent - of the afnount Of their stoek' therein, .at the par Value thereof, in- addition- to . the amount investedin 'Such stoCk ; provided that persOns holding stOck executor trators,—guardian§' , or tinsteeS' shall not be personally 'subjeet to -liability as • Stoekholders; but the • estatéS and fundS• in . their hands shall be* liable- in like manner 'and tO the Same- extent_as the teStator, , inteState; ward or p'Oson interested in' Such trUst fund wOuld'be; . if' living and .coni-petent te . act and hold the. eState`in hiS o'wn name." Upon the regUlar 'increase of the bank's stodi so many shares were sold to appellee for a certain amount, and the stock was issued to him, indorsed and given with
352 WASSON V. CASTETTER. [187 his note to the bank for the amount of the purchase money, the certificates of stock being pinned to the note and held as collateral for its payment. The dividends thereafter upon these certificates of stock were paid to the holders thereof, and the note given in payment of the purchase money was renewed twenty-two times; and appellees were shown as stockholders in the bank upon the records of the county as required by law to be kept. ,They madd no effort to repudiate the validity of the transaction until this suit. was brought to collect tbe stock assessment duly levied • against stock of the insolvent bank, of which they were, the legal owners as shown upon the books of the bank and the records of the county. The statute fixes the responsibility of the stockholders in the bank 'for all contracts, debts and engagements of such bank to the extent ,of the amount of their stock therein, at the par value thereof, in addition , to ,the amount invested in such stock;" and they appeared as stockholders, the stock , standing on the books of the bank in. :their names, having been indorsed by them and delivered to the bank as collateral security for their notes executed for the purchase of said stock, and also on the county records as such 'stockholders; and, as between them and the creditors of the bank for whose protection and benefit the statute was made, they, are estopped to deny under such circumstances that they were stockholders and are liable to the payment of the assessment as provided by statute. 3 R. C. L. "Banks," § 29, pake 399; Madison v. Dent, 176 TiT. S. 521, 20 S. Ct. 419 ; Aber . v. Maxwell, supra; Commissioner of Banks v. Cosmopolitan Trust Co., 253 Mass. 265, 148 N. E. 609, 41 A. L. R 658. These . cases differ from that of Taylor v. Gordon, supra, and are not controlled by the decision therein. From the views herein expressed, it ,follows that the court erred in overruling the demurrer and dismissing the complaint, and the cause will be reversed and remanded with directions to sustain the demurrer to the answers, and render judgment for the amount of the assessments sued for. It is so ordered.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.