Whitney v. Butler. On November 8, 1881, the defendants - having no reason whatever to believe that the bank was insolvent, or was about to become so, on the contrary, believing it to be solvent, and having no information as to Coburn's order-placed the certificates held by them in the hands of Day & Co., brokers, with directions to sell the stock. They also placed in their hands a power of attorney in the form usually adopted for transfers of stock. It was blank as to the names of the attorney and the purchaser, but was signed by the executors and duly witnessed. It was in these words: "Know all men by these presents, that for value received, we, the executors of the estate of Leonard Whitney, of Watertown, do hereby make, constitute and appoint, irrevocably, true and lawful attorney (with power of substitution), for and in our name and our behalf to sell, assign and transfer unto — one hundred shares, now standing in the name of L. Whitney, of Watertown, Mass., in the capital stock of the Pacific National Bank; and said attorney is hereby fully empowered to make and pass all necessary acts for the said assignment and transfer. Witness our hands and seals." To that power of attorney was appended the following: "For value received, I appoint, irrevocably, all the powers above given to me. Witness — as my substitute, with hand and seal, The other papers were the two certificates of stock and the certificate from the proper Probate Court, showing the appointment and qualification of the defendants as executors. Each stock certificate contained the following words: "Transferable only on the books of the said bank, in person or by attorney, on surrender of this certificate." On November 12, 1881, Day & Co. offered the stock for sale at public auction, and the same was at Benyon's request, bought by Eager at the sum of $10,400. Three days thereafter, November 15, 1881, Eager offered to the brokers in payment for the stock, his check on the Pacific National Bank. The bank at which the brokers did business declined to take that check in its deposit account. Benyon being informed of that fact, substituted for the check of Eager a cashier's check on another bank, which last check being paid, Day & Co., with the knowledge of Eager, delivered to Benyon, the president of the bank, the foregoing certificates of stock, with the power of attorney, the certificate from the Probate Court, and other papers- he thereafter holding the same "as Whitney v. Butler. purporting to be security for, and as representing said loan, awaiting the filling of Coburn's order, with the design then to have the stock transferred to him as soon as his order had been filled." On the 16th of November the defendants received from the brokers the proceeds of the sale of the Whitney stock. Benyon obtained only fifty additional shares, for the purpose of filling the order of Coburn. All this happened before the bank suspended on November 18, 1881. The executors of Whitney did not know by whom the stock was bought at the auction sale, unless the knowledge of the brokers is to be imputed to them. Believing in good faith, and having no reason to doubt that the purchaser had caused the transfer to be made, neither they nor the brokers took steps to ascertain whether it had in fact been done. They had no knowledge or information until after the appointment of the receiver as to the purpose for which either Benyon or Eager held the before-mentioned papers on the stock. . While the bank did not purchase nor intend to purchase the stock for itself, its president, in execution of Coburn's order, procured Eager to buy this stock with funds furnished him for that purpose. Coburn did not take it; and the receiver, after he took possession, found the before-mentioned papers in an envelope purporting to represent a security for a demand loan to Benyon. We do not think that the question arising upon these facts is concluded by any of the cases cited in the opinion of the Circuit judge (Davis v. Society of Essex, 44 Conn. 582; Adderly v. Storm, 6 Hill, 624; Anderson v. Philadelphia Warehouse Co., 111 U.S. 479, 483; Johnston v. Laflin, 103 id. 800, 804; ante 13; Turnbull v. Payson, 95 id. 418; Brown v. Adams, 5 Biss. 181), or in those cited in the brief for the receiver. Davis v. Stevens, 17 Blatchf. 259, post—; Irons v. Manuf. Nat. Bank, 27 Fed. Rep. 591;* Bowdell v. Nat. Bank, 2 Nat. Bank Cas. 146. In nearly all of them, where the issue was between the receiver, representing the creditors, and the person standing on the register of the bank as a shareholder, it is said generally, that the creditors of a National bank are entitled to know who, as shareholders, have pledged their individual liability as security for its debts, engagements, and * Reversed, post —. Whitney v. Butler. contracts; that if a person permits his name to appear and remain in its outstanding certificates of stock, and on its register, as a shareholder, he is estopped, as between himself and the creditors of the bank, to deny that he is a shareholder; and that his individual liability continues until there is a transfer of the stock on the books of the bank, even where he has in good faith previously sold it, and delivered to the buyer the certificate of stock, with a power of attorney in such form as to enable the transfer to be made. Some of the cases hold that the seller is liable as a shareholder even where the buyer agreed to have the transfer made on the books of the bank, but fraudulently or neg ligently failed to do so. But it will be found upon careful examination, that in no one of the cases in which these general principles have been announced, as between creditors and shareholders, does it appear that the precaution was taken, after the sale of the stock, to surrender the certificates therefor to the bank itself, accompanied (where such surrender was not by the shareholder in person) by a power of attorney, which would enable its officers to make the transfer on the register. The position of the seller, in such case, is analogous to that of a grantor of a deed deposited in the proper office to be recorded. The general rule is, that the deed is considered as recorded from the time of such deposit. 2 Washb. Real Prop., B. 3, chap. 4, ¶ 52. Where the seller delivers the stock certificate and power of attorney to the buyer, relying upon the promise of the latter to have the necessary transfer made, or where the certificate and power of attorney are delivered to the bank without communicating to its officers the name of the buyer, the seller may well be held liable as a shareholder until, at least, he shall have done all that he reasonably can do to effect a transfer on the stock register. In the case before us the personal presence of the defendants at the bank was not required in order to secure their release from liability as shareholders. Besides the certificates of stock authorized them to act by attorney. Through their agents, the brokers, who sold the stock, and through whom they received the money paid for it, they surrendered the certificates and power of attorney to the president of the bank - he receiving them, with knowledge not only that defendants had parted with all title to Whitney v. Butler. the stock and had been paid for it, but also that it had been purchased at public auction by Eager. He knew equally well that the surrender of the certificates and the delivery of the power of attorney and the certificate from the Probate Court could only have been for the purpose of having it appear, by means of a transfer on the books of the bank, that Whitney's executors were no longer shareholders. The right to have the transfer made, and thereby secure exemption from further responsibilty, was secured to the defendants both by the statute and by the by-laws of the bank. They did all that was required by either as preliminary to such transfer. Nothing remained to be done except for some officer of the bank to make the necessary formal entries on its books. If, when the agents of defendants delivered the certificates and power of attorney to the president of the bank, the latter had given any intimation of a purposen ot to make the transfer promptly, or had avowed an intention to postpone action until a sufficient amount of stock was obtained to fill Coburn's order, it may be that the failure of the defendants to take legal steps to compel a transfer would in favor of the creditors of the bank, have been deemed a waiver of the right to an immediate transfer on the stock register. But no such intimation was given; no such avowal was made. No objection was made to the power of attorney, or to the discharge of the defendants from liability. So far as the record shows nothing was said or done by the bank's officers to raise a doubt in the minds of the defendants' agents that the transfer would be made at once. It was suggested in argument that the defendants should have seen that the transfer was made. But we were not told precisely what ought to have been done to this end that was not done by them and their agents. Had any thing occurred that would have justified the defendants in believing, or even in suspecting, that the transfer had not been promptly made on the books of the bank, they would perhaps have been wanting in due diligence had they not, by inspection of the bank's stock register, ascertained whether the proper transfer had in fact been made. But there was nothing to justify such a belief or to excite such a suspicion. Their conduct was, under all the circumstances, that Williamsport National Bank v. Knapp. of careful, prudent, business men, and it would be a harsh interpretation of their acts to hold (in the language in some of the cases, when considering the general question under a different state of facts) that they allowed or permitted the name of Whitney to remain on the stock register as a shareholder. We are of opinion that within a reasonable construction of the statute, and for all the objects intended to be accomplished by the provision imposing liability upon shareholders for the debts of National banks, the responsibility of the defendants must be held to have ceased upon the surrender of the certificates to the bank and the delivery to its president of a power of attorney sufficient to effect, and intended to effect, as that officer knew, a transfer of the stock on the books of the association to the purchaser. For the reasons stated, the judgment is reversed, and the cause remanded, with directions to enter a judgment for the defendants. Judgment reversed. WILLIAMSPORT NAT. BANK V. KNAPP.* (119 U. S. 357.) Jurisdiction-Supreme Court United States-division of opinion — certificate amount. Under the acts of Congress authorizing questions arising on a trial or hearing before two judges, in the Circuit Court, and upon which they are divided in opinion, to be certified to the Supreme Court of United States for decision, each question certified must be one of law, and not of fact, nor of mixed law and fact, and it must be a distinct point or proposition clearly stated, and not the whole case, nor the question whether upon the evidence the judgment should be for one party or for the other. In an action of debt on sec. 5198, U. S. Rev. Stat., to recover twice the amount of interest, at the rate of nine per cent, received by a National bank in Pennsylvania, upon the discount of notes, where plaintiffs had judgment for $2,150.38, held, that this amount was insufficient to give jurisdiction to the Supreme Court of the United States. IN N error to the Circuit Court of the United States for the Western District of Pennsylvania. * Reported below, 15 Fed. Rep. 333. |