Hobbs v. Western National Bank.

State is allowed to banks of issue. It is obvious that the mere fact of the State banks of issue being incorporated, each by a special act, or all under general act, is immaterial, if the power is given to them to charge more than the general rate fixed for natural persons by general law of the State; otherwise the State banks would have the vantage ground.

The defendant claimed that section 5197 referred to the general laws of a State, and not to any special law incorporating and granting any special privilege to one particular bank, and that as the general law, in reference to interest, limited in Pennsylvania the rate to six per cent, a National bank in Pennsylvania could take or charge no more. Act of May 28, 1858, § 1, P. L. 622; Purdon's Digest, 803, pl. 1.

The court (MCKENNAN, Circ. J.) Judgment is hereby rendered for the plaintiff in the within case for $8,233.79, with interest from June 4, 1876.

[An appeal to the United States Supreme Court was dismissed.]

HOBBS V. WESTERN NATIONAL BANK.

(8 Weekly Notes of Cases, 131.)

Transfer of stock-foreign executor.

In the absence of any provision in the by-laws or articles of association of a National bank to the contrary, such a bank is bound under the laws of Pennsylvania to recognize a transfer of its stock by a foreign executor duly appointed in another State.

(Circuit Court, Eastern District of Pennsylvania.)

(ASE stated, wherein Elizabeth T. Hobbs, a citizen of the State of

Philadelphia, a corporation organized under the laws of the United States and doing business in the State of Pennsylvania, was defendant, showing the following facts:

Adeline T. Kittredge, the owner of certain shares of the capi

tal stock of the corporation defendant, was a resident of, and died in, the State of Illinois in 1879, having duly made her will, which was admitted to probate there, and letters testamentary issued to Charles E. Towne by the probate court. The testatrix bequeathed the said stock to the plaintiff, Abby W. Wells, and George W. Kittredge.

The executor, in distribution and settlement of the estate transferred the said shares to the plaintiff, and indorsed the said assignment and transfer upon the testator's certificate.

A duly certified copy of the will was filed in the office of the register of wills for the county of Philadelphia, but letters under the said will were not applied for, or granted by, the said register of wills.

The plaintiff, producing the certificate aforesaid, with the transfer indorsed thereon, and a duly certified copy of the letters testamentary issued by the said probate court, and a duly certified copy of the will as filed in the office aforesaid in Philadelphia, requested the defendant to transfer to her the said shares of stock, and to issue to her a new certificate therefor. The defendant, acting under the advice of counsel, refused to do so. Rev. Stat., section 5139, enacts:

"The capital stock

*

shall

be deemed personal property, and transferable on the books of the association in such manner as may be prescribed in the by-laws or articles of association."

The defendant's by-laws and articles of association are silent on the subject.

If the court shall be of opinion that the plaintiff is entitled to the said transfer and new certificate, then judgment to be entered in favor of the plaintiff; otherwise judgment to be entered for the defendant.

Cuyler & Gest, for plaintiff.

C. Stuart Patterson, contra. The shares of the capital stock of a National bank are choses in action, not chattels in possession. They do not follow the domicile of their owner, but their situs is that of the corporation. 3 Burge, 751; Angell & Ames, §§

Hobbs v. Western National Bank.

560-561; Story's Confl. of Laws, § 383; Robinson v. Bland, 2 Burr. 1077; Att'y-Gen'l v. Higgins, 2 H. & N. 339; Mechanics' Bank v. New York and New Haven R. R., 3 Kern. 627; Arnold v. Ruggles, 1 R. I. 165, 173; Gilpin v. Howell, 5 Barr, 57; Slaymaker v. Gettysburgh Bank, 10 id. 373; Van Allen v. Assessors, 3 Wall. 584; Thomp. N. B. Cas. 1. The National banks are Federal agencies and not subject to State control. McCulloch v. Maryland, 4 Wheat. 316; Osborn v. U.S. Bank, 9 id. 738; Pittsburgh v. First National Bank, 5 Sm. 48; Thomp. N. B. Cas. 936. Letters testamentary, or of administration, have at common law no extra-territorial force. Story's Confl. of Laws, § 512; Mothland v. Wireman, 3 Penr. & W. 185; Preston v. Melville, 8 Cl. & F. 12; Enokin v. Wylie, 10 H. L. 19; Fenwick v. Sears, 1 Cr. 259; Dixon v. Ramsey, 3 id. 319; Noonan v. Bradley, 9 Wall. 394. The statute law of Pennsylvania does not authorize a foreign executor to transfer the stock of a National bank located in Pennsylvania.

BUTLER, J. The stock is the personal property of the shareholder (so declared by the act of Congress), having all the ordinary incidents of such, liable to transfer by sale, and all other means ordinarily applicable to such property. On the owner's death it passes to his legal representatives, and is disposed of under the laws of the State, in the usual course of administration, as any other personalty of which he may die possessed.

The purpose of the acts of assembly of 1836 and 1872 was, and their effect is, to invest executors and administrators, under letters granted by other States of the Union, with the same authority over "shares of stock of any incorporated company, of" or "within this Commonwealth, standing in the name of the decedent," as that conferred by letters granted here. The language was certainly intended to embrace all stock of every description, which may pass to the legal representatives; and was designed to avoid the necessity for administration here. It is sufficiently comprehensive, we think, to include the stock of a National bank, which, though not incorporated by the laws of the State, is, nevertheless, a corporation "within the Commonwealth,"

First Nat. Bank of Pitlsburgh v. Pittsburgh and Castle Shannon R. R. Co. as contemplated by the act of 1836, or "of the Commonwealth," as contemplated by that of 1872. The location of the bank is here so fixed by the act of Congress, and declared by the certificate issued under it. It can transact business nowhere else; and may accurately be described as a corporation within or of this Commonwealth. Besides, if the language were less distinct, the act, being remedial in its nature, should receive a liberal interpretation, so as to embrace, if possible, the full extent of the mischief or difficulty contemplated. There is certainly as much reason for applying such a provision to one kind of stock, passing to the legal representatives of the deceased owner, as to another.

The plaintiff must be regarded, therefore, precisely as if the executor of Mrs. Kittredge's will had administered here. That the bank could safely recognize the transfer, under such circumstances, and therefore should do so, cannot well be doubted. It is not subject to the control of the State. But as its stockholders may transfer their interests, or the same may be transferred, by any method provided by the laws of the State for the transfer of similar property (in the absence of other provision by Congress), the defendant cannot thwart the purpose to do so.

If the bank had prescribed a method of transfer, as contemplated by the act of Congress, the question now presented would probably have been avoided. But having failed in this, the duty of recognizing a transfer in pursuance of the laws of the State (the only method available to the plaintiff) is, we think, reasonably clear. The failure to discharge this duty is sufficient to support the suit. Judgment must therefore be entered for the plaintiff.

FIFTH NATIONAL BANK OF PITTSBURGH V. PITTSBURGH AND CASTLE SHANNON RAILROAD COMPANY.

The District Court of the United States has jurisdiction of a bill in equity filed by a National bank.

First Nat. Bank of Pittsburgh v. Pittsburgh and Castle Shannon R. R. Co

Stockholders have no standing in court to interfere for the protection of their company until the board of directors of the company have neglected or refused an application to take the proper steps to protect the interests of the company.

(District Court, Western District of Pennsylvania.)

THE

HE Fifth National Bank of Pittsburgh filed a bill in equity in the District Court of the United States for the Western District of Pennsylvania against the Pittsburgh and Castle Shannon Railroad Company, and George R. Duncan, trustee for the bondholders of the company, alleging that it was a creditor, a bondholder and a stockholder in defendant company, and that the road was insolvent and praying for the appointment of a receiver for the protection of its interests in defendants' company. Upon the day of April, 1879, the court, upon motion of the plaintiff, appointed W. W. Martin receiver of defendant company.

Upon February 12, 1880, certain stockholders, alleging that they were acting for a majority of the stockholders of defendant company, presented a petition to the court and moved: 1st. To dismiss the bill for want of jurisdiction; or if this was refused, 2d. To dismiss the bill for want of cause of action; or if this was refused, 3d. To permit the petitioners to file an answer in the name of defendant company; or if this was refused, 4th. To remove the present receiver and appoint James M. Bailey in his stead. The court was also asked in the same motion to restrain The Iron City National Bank from proceeding on a judgment obtained by it against defendant company, and to restrain H. Sellers McKee from proceeding further upon a suit brought by him against defendant company, in which judgment had not yet been obtained. Each of these creditors had previously obtained the permission of the court to bring their suits.

An answer was filed by H. Sellers McKee denying the allegations in the petition affecting him, and after argument the court permitted him to enter judgment.

In February, 1880, a motion was made by the counsel of defendant company to quash the petition for the following reasons: 1st. That the said petition is informal, irregular and defective,