Statement of the Case.

fault of the Iron Works. An instruction like that asked was misleading and improper.

It is obvious, from these considerations, that the proceedings in this court were for delay. Under clause 2 of Rule 23 of this court,

It is ordered in No. 356, a supersedeas bond having been given, that the judgment be affirmed and that ten per cent damages, in addition to interest, be awarded. In No. 357, as this court has no jurisdiction by writ of error over the proceedings, all we can do is to dismiss the case, and such is the order.

PACIFIC NATIONAL BANK v. EATON.

ERROR TO THE SUPREME JUDICIAL COURT OF THE STATE OF MASSACHUSETTS.

No. 239. Argued March 23, 24, 1891.- Decided May 25, 1891.

Delano v. Butler, 118 U. S. 634, and Aspinwall v. Butler, 133 U. S. 595, affirmed and applied to a case where a shareholder in the bank, having subscribed her proportional share to the doubling of its capital and paid therefor, took out no certificate for the new stock and demanded back the money so paid.

A subscription to stock in a national bank, and payment in full on the subscription and entry of the subscriber's name on the books as a stockholder, constitutes the subscriber a shareholder without taking out a certificate.

THIS was an action at law to recover from the Pacific National Bank an amount paid in as a subscription to an increase of its stock. The circumstances which induced the call for the increase are stated fully in Delano v. Butler, 118 U. S. 634, and Aspinwall v. Butler, 133 U. S. 595. The plaintiff below, (defendant in error,) owning forty shares of $100 each, subscribed for an equal amount in the proposed increase of $500,000; and paid in the money. Owing to the fact that some stockholders declined to take the new stock, the actual amount

Argument for Defendant in Error.

of increase subscribed was $461,300, and, after the plaintiff's payment of the $4000, an increase to that amount only was approved by the comptroller in lieu of the $500,000 previously authorized. The plaintiff below, not having taken out any certificate of stock, demanded repayment of the $4000, and, the same being refused, brought this action, and obtained judgment for that amount, interest and costs. The bank having become insolvent, the action was defended by the receiver, who sued out this writ of error.

Mr. A. A. Ranney for plaintiff in error.

Mr. J. H. Benton, Jr., for defendant in error.

The decision of the state court that the bank received the money of the defendant in error upon an implied promise to give her forty shares in an increase of five thousand shares was correct. An increase of the capital of a national bank depends on compliance with the conditions of the statutes and articles of association; and not upon an arrangement between the bank and its shareholders or other persons. Rev. Stat. § 5142; Charleston v. People's Nat. Bank, 5 So. Car. 103, 115. The payment by the defendant on the 1st of October was an acceptance of this offer, and created a contract between her and the bank, by which it promised to issue to her forty shares of such five thousand new shares, if the whole five thousand were subscribed and paid for and the comptroller approved their issue, and by which she promised the bank to take forty shares of such proposed increase of five thousand shares, if the whole five thousand were subscribed and the comptroller approved their issue, .e., if such five thousand shares were created. Spring Company v. Knowlton, 103

U. S. 49.

It was upon this implied contract to issue and to take forty shares of stock in the proposed increase of five thousand shares, if such shares were created, that the defendant paid to the bank four thousand dollars. If the whole five thousand shares were not subscribed and paid for, or if the comptroller

Argument for Defendant in Error.

refused to approve their issue, no such shares as were paid for could be created, and the bank was under no obligation to issue any shares to her, and it necessarily follows that unless the whole five thousand shares were subscribed and paid for, and the comptroller approved the issue of them, she was under no obligation to take forty shares of any other increase which might be voted, subscribed and paid for and approved.

The attempted application by the bank of her money to the payment for forty shares in an increase of forty-six hundred and thirteen shares, instead of the payment for forty shares in an increase of five thousand shares, was really an attempt to make her take forty-three shares, when she had only agreed to take forty. People's Ferry Co. v. Balch, 8 Gray, 303, 314; Katama Land Co. v. Jernegan, 126 Mass. 155.

It is too plain for contention that no shares in a proposed increase of the capital of a national bank can come into existence till the whole amount thereof is paid. Such is the plain reading of the statute: "No increase shall be valid until the whole amount of such increase is paid in." If this were a case of subscription to original capital under a charter which provided that no capital stock shall be issued until the whole amount of the capital has been subscribed for, the authorities. are uniform that a subscription for shares would not be binding until the whole amount of the capital was subscribed. Santa Cruz Railroad Co. v. Schwartz, 53 California, 106; Bray v. Farwell, 81 N. Y. 600; New York, Housatonic, etc. Railroad Co. v. Hunt, 39 Connecticut, 75; Read v. Memphis Gayoso Gas Co., 9 Heiskell, 545; Fry v. Lexington etc. Railroad Co., 2 Met. (Ky.) 314, 323; Shurtz v. Schoolcraft & Three Rivers Railroad Co., 9 Michigan, 269; Swartwout v. Michigan Air Line Railroad Co., 24 Michigan, 388; Livesey v. Omaha Hotel Co., 5 Nebraska, 50; Hale v. Sanborn, 16 Nebraska, 1; Selma, Marion, etc. Railroad Co. v. Anderson, 51 Mississippi, 829; Hughes v. Antietam Mfg. Co., 34 Maryland, 316; Topeka Bridge Co. v. Cummings, 3 Kansas, 55; Littleton Mfg. Co. v. Parker, 14 N. H. 543; New Hampshire Central Railroad v. Johnson, 30 N. H. 390; S. C. 64 Am. Dec. 800; Contoocook Valley Railroad Co. v. Barker, 32 N. H. 363; Peoria & Rock

Opinion of the Court.

Island Railroad v. Preston, 35 Iowa, 115; Haskell v. Worthington, 94 Missouri, 560; Sommerset & Kennebec Railroad v. Cushing, 45 Maine, 524; Sommerset Railroad Co. v. Clarke, 61 Maine, 379; Jewett v. Valley Railroad Co., 34 Ohio St. 601 to 607; Winters v. Armstrong, 37 Fed. Rep. 508; Wontner v. Shairp, 4 C. B. 404, 441; Pitchford et al. v. Davis, 5 M. & W. 1; Allman v. Havana, Rantoul & Eastern Rail road Co., 88 Illinois, 521; Hendrix v. Academy of Music, 73 Georgia, 437; Salem Milldam Corporation v. Ropes, 6 Pick. 23; Katama Land Co. v. Jernegan, 126 Mass. 155.

MR. JUSTICE BRADLEY delivered the opinion of the court.

This case belongs to the same group as Delano v. Butler (118 U. S. 634) and Aspinwall v. Butler (133 U. S. 595). It relates to certain shares of the increased stock of the Pacific National Bank of Boston issued in September, 1881. The circumstances under which said stock was created and subscribed are detailed in the reports of the cases referred to, and need not be repeated here. It will suffice to state those which are peculiar to the present case, only adverting to such others as may be necessary to understand it. On September 13, 1881, the capital stock of the bank was $500,000, and on that day the directors voted that the capital be increased to $1,000,000, and that the stockholders have the right to take the new stock at par, in equal amounts to that then held by them. Subscriptions to the new stock were payable October 1, 1881. Mary J. Eaton, the defendant in error, having forty shares (equal to $4000) of the original stock, took her full share of the new stock, and paid for it September 28, 1881, and received the following receipt therefor:

"Pacific National Bank,

"$4000.

Sep. 28,

"BOSTON, October 1st, 1881.

"Received of Mary J. Eaton four thousand dollars on 'account of subscription to new stock.

"J. M. PETTENGILL, Cashier."

Opinion of the Court.

The stockholders of the bank did not all avail themselves of the right to take new stock, but $461,300 of the $500,000 were taken and paid in. At the request of the directors, with the sanction of a large majority of the stockholders, the increase of stock was afterwards limited to the said sum paid in, and approved by the comptroller of the currency, who made and executed his certificate to that effect. Certificates for the new stock were made out in a book, with stubs to indicate their contents, and were delivered to the stockholders as they called for them. Such a certificate was made out for Miss Eaton, but she never called for it, though she was registered in the stock register of the bank as owner thereof without her knowledge.

The statement of facts, amongst other things, has the following:

"No certificate of stock in said proposed increase of capital in the amount of five hundred thousand dollars was made by the bank, nor was any certificate in said claimed increase of four hundred and sixty-one thousand three hundred dollars received by or offered to the plaintiff, but when the certificate from the comptroller, made December 16, was received by the bank a certificate of forty shares in said claimed increase of four hundred and sixty-one thousand three hundred dollars was made by the bank, a copy of which is hereto annexed, marked C, which was never called for, taken by, or tendered to the plaintiff, but still remains in the certificate book, and she was then registered in the stock register of the bank as the owner thereof without her knowledge. No certificates in said claimed increase were ever tendered by the bank to any persons to whom they were made, but were delivered to them when called for. No communication was made to the plaintiff with reference to said vote of the directors of December 13, or change in said proposed increase, or said certificate of said comptroller, or said certificate made to her, and she never assented to any change in the proposed increase in the sum of $500,000."

On the 10th of January, 1882, there was held an annual meeting of the stockholders of the bank for the election of