Man v. Cheeseman

16 F. Cas. 568, 1874 U.S. Dist. LEXIS 234

• Court: District Court, S.D. New York
• Decided: November 23, 1874
• Status: Published

Opinion

BLATCHFORD, District Judge,

held, that Dr. Cheeseman was liable for the assessment of 54 per cent, ordered by the comptroller, although he had parted with the shares four years before, on the ground that in order to escape liability a shareholder must see that his stock is transferred upon the books of the bank to some person capable of succeeding to his obligations, and that the bank was not such a person, being prohibited by law from purchasing its own stock. It follows from this that the ordinary method of transfer by signing the blank power of attorney will not protect the shareholder, and that in all cases of sales of such bank stock he remains liable until the transfer is made on the bank’s books to his successor.

The measure o£ liability is also very severe. Two points were made by Dr. Cheese-man’s counsel, as follows: First, that the liability was only for the deficiency, and could not be enforced until all the assets of the bank had been converted and applied by the receiver to the payment of the debts; and, second, that the shareholders liable for the deficiency are entitled to notice, and to some opportunity of ascertaining what the deficiency may be which they are called upon to make up. Both these points were overruled, the court holding that the shareholder was absolutely bound by the action of the comptroller in making the assessment, and that when such assessment had once been made the shareholder could interpose no defense against it. Thus shareholders are cut off from any examination of the accounts of the receiver or of the. debts allowed against the bank.