Opinion
No. 3549.
May 6, 1937. Rehearing Denied May 13, 1937.
Appeal from District Court, Presidio County; C. R. Sutton, Judge.
Suit by Z. Gossett, Banking Commissioner of Texas, against F. Seggerman. From an adverse judgment, the plaintiff appeals.
Affirmed.
This is a stock assessment suit instituted by the Banking Commissioner of Texas against the appellee, F. Seggerman, as a shareholder in Presidio Valley Bank; said bank being in the hands of the Banking Commissioner for liquidation.
The plaintiff's petition stated an ordinary case of liability against the defendant as the owner of ten shares of the capital stock of the bank. The defendant denied that he was or ever had been a shareholder in the bank and pleaded specially, in substance, that he became a director of the bank at the urgent solicitation of the officers and principal stockholders, but at the time he owned no stock and refused to purchase the same, and that the pretended issuance of stock in his name was intended merely as a loan of stock to him and the same was never accepted by him.
By supplemental and trial amendment pleadings, the plaintiff alleged that defendant accepted the shares of stock; receipted for them; accepted an election to the directorate, making the statutory affidavit of stock ownership; exercised the powers and rights of a stockholder and of a director; consented to the issuance of the stock in his name, and to the carrying of his name upon the bank books as a stockholder; and pleaded by reason of these facts, whether he was the actual owner of such stock or not, that he was estopped to deny such ownership and consequent liability.
Upon trial without a jury judgment was rendered in favor of defendant. Findings and conclusions were not filed by the trial court.
The bank became insolvent and closed November 18, 1935.
On the 8th of June, 1935 (the date on which the stock certificate was transferred to Seggerman), the following letter was written to him by Mrs. Millington, the president of the bank:
"Presidio Valley Bank "Presidio, Texas"June 8th, 1935.
"This is to certify that the ten shares of the Presidio Valley Bank held in the name of F. Seggerman, is not the property of the said Mr. F. Seggerman, but is ten shares of stock of which Mrs. W. T. Millington was acting as Trustee for the Presidio Valley Bank — the Presidio Valley Bank having taken in this stock from R. C. Sparks on his debt to the bank. Neither Mrs. W. T. Millington acting as Trustee or F. Seggerman are not responsible for any assessment against this stock. The Presidio Valley Bank being free to dispose of this stock at any time and at any price obtainable. The note of $287.00 held against this stock and given by Mrs. W. T. Millington was to balance the stock account as appearing on the bank record. The stock was transferred to F. Seggerman so he could act as Director.
"Mrs. W. T. (Louise) Millington
"President."
Defendant testified he was approached, prior to June 8, 1935, by Mrs. Millington, who was president at the time, and asked to serve on the board of directors. He told her he could not, as he did not have the money to buy any stock, and would not have the money to pay any assessment if he should become liable for one. Later, she approached him and said they could fix it up all right. "You can act in name only and we will assign some stock to you." She told him she would give him a letter relieving him from any obligations; that she had to have another director on account of the fact that Mr. Riggs was going to Mexico, he thought for a couple of days, so Seggerman said all right. He had a conversation with Mr. Avant along the same line. He testified concerning the letter dated June 8, 1935, above quoted in full, that one copy was given to him about June 8th, and then a few days later another was given to him, and they said the latter was written a little clearer than the other, and he kept them both. Mrs. Millington personally gave them to him about the time the stock was transferred to him. He never paid anything for the stock, never agreed to pay anything for it. The certificate was never manually in his possession; he did not know where the certificate was; when he signed for it, it was in the book; he never had access to the book.
Ben S. Avant, formerly cashier and a director of the Presidio Valley Bank, testified as follows: He was present when Mrs. Millington told Seggerman she would issue him some stock so he could become a director. Walter Millington, her son, heard this arrangement. She told Seggerman she would issue this stock and he would not have to pay for it. She would just issue the stock in order that he might become a director. The certificate for the ten shares of stock was never actually delivered to Mr. Seggerman, but was kept in the vault of the bank; that the ten shares of stock transferred to Seggerman, certificates Nos. 42 or 49, were theretofore owned by the Presidio Valley Bank and held in the name of Mrs. Millington as trustee.
The stub to the stock certificate No. 58 shows that this certificate was issued to Seggerman June 8, 1935. These shares, as appears from this stub, were transferred to him from Mrs. W. T. Millington, certificate No. 49; which latter certificate was issued to Mrs. Millington, trustee, November 28, 1932, in lieu of a prior certificate, No. 42, which was issued December 23, 1931, for ten shares to "Mrs. Walter T. Millington, Trustee, Presidio Valley Bank"; and the certificate No. 42 was itself transferred from certificate No. 11, which was issued to R. C. Sparks, October 23, 1929; which was transferred to him from another certificate, No. 1, originally issued in his name for seventy-five shares.
Seggerman qualified as director by executing the acceptance and affidavit that he was the owner of ten shares of stock of the bank, as required by law, and afterwards attended meetings of the board and signed instruments on behalf of the bank as a director.
Avant also testified that after the certificate was made out in Seggerman's name, it was left in the stock register, and a bank examiner came along the first part of July and asked why Mr. Seggerman had not signed for the certificate, calling attention to the fact that it was issued and still attached to the stub. Mr. Seggerman had not signed the receipt attached to the stub at that time, so he then signed for it, and the certificate was torn loose by Avant, put into an envelope with Mr. Seggerman's name on it, and put in the vault. Seggerman never had it from that time until the bank failed.
As stated above, certificate No. 49 evidenced the ten shares which were transferred to Seggerman. The bank was the real owner of the certificate No. 49, in the name of Mrs. Millington, trustee. The bank had become the owner of this stock in payment of a debt owed to it by Sparks, the owner of certificate No. 11. Minutes of the directors' meeting dated November 3, 1931, authorized the purchase by the bank of this certificate No. 11 from Sparks to apply on his debt. Avant knew all the time that the bank was the owner of the stock issued to Mr. Seggerman. When the examiner made his report, dated July 29, 1935, he was told that the bank held this stock at this time on June 8, 1935.
Minutes of the meeting of the directors of the bank dated February 27, 1932, show that the bank was the owner of twenty-six shares of its own capital stock, acquired pursuant to the resolution of November 3, 1931, above referred to, and other resolutions.
Mead Metcalfe, of Marfa, and Ocie Speer, of Austin, for appellant.
Paul D. Thomas and William Flournoy, both of El Paso, for appellee.
Appellant first asserts the undisputed facts and circumstances in evidence show conclusively as a matter of law that Seggerman was the owner of the ten shares of stock of the bank appearing in his name at the time the bank was closed, wherefore the implied finding of the court to the contrary cannot be sustained; and in any event such finding is so contrary to the overwhelming weight and preponderance of the evidence as to be manifestly wrong, and should be set aside.
This contention cannot be sustained. The evidence speaks for itself, and abundantly supports the view that Seggerman was not the real owner of the stock, but held them in trust to qualify him to act as a director of the bank.
Appellant presents the further point that Seggerman is estopped to deny he was a shareholder in the bank because he consented to and acquiesced in the bank's carrying his name upon its books as a shareholder, and held himself out and permitted himself to be held out as a shareholder.
Upon this phase of the case, Shaw v. Hailey (Tex. Civ. App.) 46 S.W.2d 724, is directly in point. In that case stock had been loaned to Hailey to qualify him as a director of a state bank. Thereafter Hailey qualified as a director. He was also elected and acted as a vice president of the bank. It was held Hailey was not estopped to deny he was the real owner of the stock appearing in his name upon the bank's books. Recovery of a stock assessment against him was denied. In an able opinion by Justice O'Quinn, the authorities in this state are reviewed. The same authorities are cited by the parties in this appeal. In our opinion, the ruling in Shaw v. Hailey is fully supported by the authorities reviewed by Judge O'Quinn. The distinguishing features of the case here cited by appellant are pointed out in his opinion.
Upon the authority of that case we hold Seggerman is not estopped to deny his status as a shareholder, and he not being the real and true owner of the stock appearing in his name upon the bank's books, he is not liable upon the assessment.
Affirmed.