Baird v. McLean

KNIGHT, J.

This action was brought by the receiver of an insolvent North Dakota state bank to recover the sum of one thousand dollars on a stockholder’s liability created by the statute of that state. Judgment was given for the defendant, and plaintiff appeals. The determinative question presented relates to the legal effect of, and the sufficiency of the evidence to sustain, the trial court’s finding that defendant was not at any time the owner of the stock.

Briefly stated, the essential facts are as follows: On January 16, 1919, while the defendant McLean was serving as an officer in the army in France his brother-in-law, named Rother, who was president of said bank, placed ten shares of the bank’s stock, for his own convenience, in McLean’s name on the books of the bank. McLean knew nothing about the matter until October, 1924. At that time he was living in California, and he received a letter from Rother, stating what he had done, and adding that if McLean would permit the balance of his account which he had been carrying with the bank to remain there, he, Rother, would continue to let the stock remain in McLean’s name. McLean replied immediately, stating - that he had established a permanent residence in California, that he wanted to use his money here, and that consequently he did not wish to accept the stock. Shortly afterward Rother sent him a certificate representing the stock which he was asked to indorse in blank, so that the matter could be straightened out on the books of the bank. McLean indorsed the certificate as requested and returned it at once to Rother, the indorsement thereon bearing date of November 12, 1924. The transfer of the stock was made on the books of the bank

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accordingly. The bank failed October 29, 1925, and two months thereafter an assessment was levied on the stock. Under the North Dakota statute a stockholder’s liability continues for one year after the transfer of the stock. After returning the indorsed certificate McLean heard nothing more about the matter until some time subsequent to the bank’s failure and the levy of the assessment, at which time he was notified that he was expected to pay the assessment.

The evidence further shows that, as required by the statute of that state, the president and cashier of the bank filed with the bank examiner and auditor, twice each year, a verified list of the stockholders of the bank, which included McLean’s name during the time the stock stood in his name on the books of the bank; also that in 1919 a dividend was declared, and that during the years 1920, 1921 and 1922 annual meetings of the stockholders were held, at which the stock in question was represented. But admittedly, at no time did McLean have any knowledge of the filing of said lists, nor of the contents thereof; nor did he ever receive any part of the dividend; nor was he aware of the stockholders’ meetings; nor does it appear from the record by whom or under what circumstances the stock was represented at said meetings.