Scott v. Deweese

Citations

• 181 U.S. 202
• 21 S. Ct. 585
• 45 L. Ed. 822
• 1901 U.S. LEXIS 1359

Syllabus

<p>Section 5142 of the Revised Statutes of the United States, providing for the increase of the capital stock of a national bank, and declaring that no ' increase of capital stock shall be valid until the whole amount of the increase is paid in, and until the Comptroller of the Currency shall certify that the amount of the proposed increase has been duly paid in as part of the capital of such association, does not make void a subscription or certificate of stock based upon capital stock actually paid in, simply because the-whole amount of any proposed or authorized increase has not in fact been paid into the bank; certainly, the statute should not be so applied in behalf of a person sought to be made liable as shareholder, when, as in the present case, he held, at the time the bank suspended and was put into the hands of a receiver, a certificate of the shares subscribed for by him; enjoyed, by receiving and retaining dividends, the rights of a shareholder; and appeared as a shareholder upon the books of the bank, which were open to inspection, as of right, by creditors.</p> <p>As between the bank and the defendant, the latter having paid the amount of his -subscription for shares in the proposed increase of capital was entitled to all the rights of a shareholder, and therefore, as between himself and the creditors of the bank, became a shareholder to the extent of the stock subscribed and paid for by him.</p> <p>That the bank, after obtaining authority to increase its capital, issued certificates of stock without the knowledge or approval of the Comptroller and proceeded to do business upon the basis of such increase before the whole amount of the proposed increase of capital had been paid in, was a matter between it and the Government under whose laws it was organized, and did not render void subscriptions or certificates of stock based upon capital actually paid in, nor have the effect to relieve a shareholder, who became such by paying into the bank the amount s