Lockwood v. The American National Bank. by-law was valid (Lockwood v. Merchants' National Bank, 9 R. I 308); but the Supreme Court of the United States has since decided that in no way can a National bank restrain a transfer of its stock. Bank v. Bullard, ante, p. 93; therefore the decision of the Rhode Island court on that question is not included. Currey & Rogers, for plaintiff. Bradley, Hart & Markland, for defendants. DURFEE, J. The defendants claim that the by-law in question was adopted by a quorum of the directors of the American National Bank on the two grounds: first, that there were only ten directors of the bank previous to its conversion; and, second, that the ten directors who executed the organization certificate and took the oath, became, under the United States law, the directors of the National bank, exclusively of any others. 1. The non-acting directors were elected with the other directors by the bank when a State bank. No subsequent qualification was required of them. They never signified their acceptance. The other directors never elected others to fill their places at the board. For any thing we can see, they might have acted as directors at any time before the conversion, if they had chosen. Where no qualification is required and there is no usage to control, we think a person who is elected a bank director may be presumed to accept unless he declines. This presumption may doubtless, be rebutted, and perhaps simple non-action for five months would be sufficient to rebut it in some cases. But in this case the stockholders who authorized the conversion recognized the non-acting directors as directors at the time of the conversion. They name them, in the instrument authorizing the conversion, with the other ten as those "who are now the directors of said American Bank." The instrument may be invalid in so far as it was intended to operate as a reappointment, but considered as a recognition of the status of the non-acting directors, it is none the less significant. We think we ought not to find for the benefit of the bank that there were only ten directors previous to its conversion because of the simple nonaction of these two, when the stockholders authorizing the conversion recognized these two with the other ten at the time they authorized the same. Lockwood v. The American National Bank. 2. The National Currency Act, section 44, prescribes the mode in which State banks may become National banks. It provides that"in such case, the articles of association and the organization certificate required by this act may be executed by a majority of the directors of the bank or banking institution;" that "the certificate shall declare that the owners of two-thirds of the capital stock have authorized the directors to make such certificate," etc.; that "a majority of the directors, after executing said articles of association and organization certificate, shall have power to execute all other papers and to do whatever may be required to make its organization perfect and complete as a National association," etc., and that "the directors aforesaid may be the directors of the association until others are elected or appointed in accordance with the provisions of this act." We think the words, "the directors aforesaid," mean those who are the directors of the State bank, the design being that the directors of the State bank should be the directors of the National bank until an election or appointment by the National bank. They are the directors," a majority of whom are authorized by the section to do certain acts. This seems to us to be the natural construction, and we think of no good reason for not adopting it. We cannot suppose it was designed that the bank should lose the services of a director or of its president, merely because he did not sign the articles of association and the organization certificate; for the omission may have been owing to a temporary sickness or absence. If the intention had been that those only of the directors of the State bank, who executed the articles and certificate, should be directors of the National bank, the intention would, we think, as it very easily could, have been more unmistakably expressed. We also think that no oath was, by the act, required of these ad interim directors. Section 9 provides that "each director, when appointed or elected, shall take an oath," etc. These directors were not elected or appointed for the interim, but held under the act by virtue of their former election. The 44th section says, "the directors aforesaid may be the directors of the association until others are elected or appointed in accordance with the provisions of this act." It adopts the directors of the State bank as the directors of the National bank for the time being. It makes no mention of any oath as being required of them, and it might happen that Charleston v. People's National Bank. some of the directors thus adopted, not being owners of the amount of stock required by the act, could not take the prescribed oath. And see Comptroller's Instructions, issued in 1864, page 9. But even if the oath be necessary, it does not follow that a majority of only those who take the oath would constitute a quorum of the National board. On the contrary, we think it would still require, to make up such a quorum, a majority of "the directors aforesaid," i. e., of those who were the directors of the bank before its conversion. We consequently still feel constrained to adhere to our former opinion, that the twelve directors elected by the State bank became, by force of the National Currency Act, the directors of the National bank, and that, therefore, the by-law in question, being adopted by only six of them, was not adopted by a majority or quorum of the board, and so did not become a valid by-law. We therefore render Judgment for the plaintiffs. CHARLESTON V. PEOPLE'S NATIONAL Bank. (5 South Carolina, 103.) National bank - Increase of capital stock — Taxation of increased stock. Where a National bank voted to increase its capital stock, and the requisite number of new shares were subscribed and paid for before the 1st of January, 1872, and a semi-annual dividend, declared as of that day, was paid upon the new shares, as well as the old, but such increase of capital was not approved by the Comptroller of the Currency, nor his certificate issued until the 5th of January, 1872. Held, that such new shares were not the subjects of taxation under an ordinance imposing a tax on bank shares "in the hands of the tax payers on the 1st of January, 1872." There can be no increase of the capital of a National bank until the Comptroller of the Currency approves thereof and issues his certificate, as provided by section 13 of the act of Congress providing for the organization of National banks. YASE agreed upon in a controversy submitted without action. CAS The city council of Charleston claims to recover of the stockholders of the People's National Bank $6,312.50. Charleston v. People's National Bank. The following are the facts upon which said controversy depends: 1. That the city council of Charleston is a municipal corporation under the laws of the State of South Carolina, "with power and authority to make such assessments on the inhabitants of Charleston, or those who hold taxable property within the same, for the safety, convenience, benefit and advantage of the said city as shall appear to them expedient." day of 2. That an ordinance to raise supplies for the year 1872, ratified on the , 1872, by said city council imposed a tax of two per cent upon the taxable property within said city, in the hands of tax payers, on the 1st of January, 1872. 3. That the People's National Bank, a banking association within the limits of the city of Charleston, organized under the laws of the United States, on the 12th day of February, 1872, returned seven thousand five hundred shares, valued at $100 each, as in the hands of its stockholders, subject to taxation, upon which, after deducting value of real estate and city stock, at $23,440, a tax of two per cent was duly assessed by the city appraiser, and the same has been duly paid by said bank for its stockholders, pursuant to section 28 of ordinance of February 10, 1870. 4. That, on the 1st day of July, A. D. 1871, said banking association voted to increase the number of shares of capital stock in said bank to one thousand, subject to the approval of the Comptroller of the Currency. Between the 1st of July, 1871, and the 1st of January, 1872, said two thousand five hundred additional shares were duly subscribed, and the amount thereof, $250,000, secured to be paid to said banking association, and the securities were held by the cashier in trust for it. The said banking association declared and paid a semi-annual dividend upon all of its said stock, including said increase of two thousand five hundred shares, on the 7th day of January, A. D. 1872, for the half year ending January 1, 1872. 5. That the subscribers to said additional shares of stock did receive certificates of stock representing the same after the 2d of January, 1872. 6. That on the 15th day of June, A. D. 1872, said banking association having failed to return said additional shares for taxation to the city council, the city appraiser, pursuant to sections 29 and Charleston v. People's National Bank. 38 of the ordinance of the city, of February 10th, 1872, proceeded to list said two thousand five hundred shares of stock for taxation, and fixed the value thereof at $100 per share, amounting in all to $250,000, and levied pursuant to ordinance of city council, of the day of A. D. 1872, a tax of two per cent thereon, which tax amounted to the sum of $5,000, which, not having been paid at the times required by ordinance, is subject to a penalty of twenty per cent for non-payment, pursuant to section 48 of the ordinance of February 10th, 1872, amounting to $1,000. There has been a school tax assessed by the Charleston city board of school commissioners, of three hundred and twelve dollars and fifty cents ($312.50), to be collected by the city council of Charleston, and if said stock is taxable the same is now due to plaintiff. 7. The said banking association did not obtain leave of the United States Comptroller of Currency to increase its capital stock till after the 1st day of January, 1872; and the Comptroller of Currency refused to recognize any increase of the capital stock of the bank until the 5th day of January, 1872; and, the 3d day of January, 1872, said banking association returned to the Comptroller of Currency, at Washington, only seven thousand five hundred shares. as the amount of its capital stock, subject to taxation by the general government, paid the tax thereon, and the said return and payment were accepted by the said Comptroller. The question submitted to the court is: Had the city council a right to levy the tax on the two thousand five hundred shares of stock, under the facts stated? The court below ordered that judgment be entered against the defendant in the sum of $6,312.50, with costs, and that the plaintiff have execution thereof. The defendant appealed. Simonton, for appellant. Minot, city attorney, Corbin & Stone, for respondent. MOSES, C. J. The single question presented by the case agreed upon in a controversy submitted without action between these parties is, whether the city council of Charleston had a right to levy the tax on the twenty-five hundred shares of the stock referred to in the brief. |