11. Action Of Bank When Certificates Are Lost

Sometimes a certificate is lost, and the owner requests a new one. The official to whom he applies should be strongly assured that the certificate is lost before issuing another. When another is issued."Duplicate," or some other mark, should be written thereon to indicate its nature, and a bond of indemnity should be taken by the bank to secure it against possible loss.

12. Reissue Of Certificates To Women After Marriage

Sometimes shareholders change their names, especially women who marry. New certificates ought then to be made out, as a bank at all times ought to know the names of its shareholders. If a woman whose name has been changed sold her shares without obtaining a new certificate, how should she sign the transfer? Suppose her original name was Mary Dick and her married name Brown, the proper form of signature would be Mary Brown, formerly Mary Dick.

13. Liability Of Shareholders

Stockholders of national banks and also of many state banks and other corporations are liable in the event of the failure of a bank to a certain amount, if this be needed, to pay its debts. Suppose a national bank has a capital of $1,000,000 dollars, and $3,000,000 of deposits, and fails, having lost half of this sum by improvident lending. The shareholders can be required to make this loss to depositors good to an amount equal to their stock. In other words, they can be compelled to pay $1,000,000 more, which will be used to pay the bank's indebtedness to its depositors. When such a calamity overtakes a bank, shareholders often try to escape the assessment made on them for the purpose of discharging the bank's indebtedness. One of the ways is to transfer their stock just before the failure. Such a transfer is regarded with great suspicion, especially if it be to an irresponsible person. Again and again have such transfers been declared void as mere evasions of liability. But, we repeat, if a shareholder has sold his stock in good faith, the failure of the purchaser to have the transfer made, cither through his own negligence or that of the officers of the bank, will not render the seller liable. Vet some one is liable in all cases, and that person is the owner of the stock. The question in such cases, therefore, is to find out the real owner. This question is of great importance, especially when bank, stock has been pledged as security for a debt.' Though a national bank can not take its own stock as security for a debt at the time of making a loan, it can take it as security for a previous one, the ultimate discharge of which may be feared; and if it is thus taken, suppose the bank whose stock is pledged should fail, would the other bank, which has taken it, be liable for an assessment? This question troubled the courts for several years, but the Supreme Court of the United States decided the question in the Pauly case in such a clear and satisfactory manner as to remove all difficulties.1 Several principles were announced that rnay be briefly stated. (1) That the real owner of the shares in a national bank may be treated as a shareholder. (2) If the shares are pledged to a bank and transferred in such a way as to indicate a change of ownership, it is liable to an assessment. (3) But if the mode of transfer shows that the bank is simply the pledgee and not the real owner, it can not be assessed. (4) Lastly, if shares are transferred simply to evade liability, the original owner may be assessed. Thus, suppose the owner of shares transfers them to another and never says anything about the matter, and after the failure of the bank the transferree should make the unwelcome discovery that he was a shareholder.

He has never bought or paid for them; in truth, would not have pun based them had they been offered to him.

In such a case it would be unjust to hold him liable, and the law does not go so far. But if a person knows that his name is on the stock book as a holder, he can not after the failure of the bank show it ought not to have been there.

1 165 U.S. 606