U.S. Supreme Court
Lantry v. Wallace, 182 U.S. 536 (1901)
Lantry v. Wallace
Argued March 11, 1901
Decided May 27, 1901
182 U.S. 536
This action was brought by the receiver of a national bank under Rev.Stat. § 5151, providing that shareholders of every such association shall be held individually responsible, equally and ratably, and not one for another, for all contracts, debts and engagements of such association, to the amount of their stock therein at the par value thereof, in addition to the amount invested in such shares.
Assuming that the defendant became a shareholder in a national bank in consequence of fraudulent representations of the bank's officers, two questions are presented for determination: 1, whether such representations, relied upon by defendant, constituted a defense in this action, brought by the receiver only for the purpose of enforcing the individual liability imposed by § 5151, Rev.Stat., upon shareholders of national banking associations, which question is answered in the negative, and 2, can the defendant, because of frauds of the bank whereby he was induced to become a purchaser of its stock, have a judgment against the receiver, on a counterclaim for money paid by him for stock, to be satisfied out of the bank's assets and funds in his control and possession, which question is also answered in the negative.
The present action is at law, its object being to enforce a liability created by statute for the benefit of creditors who have demands against the bank of which the plaintiff is receiver. If the defendant was entitled, under the facts stated, to a rescission of his contract of purchase, and to a cancellation of his stock certificate, and consequently to be relieved from responsibility as a shareholder of the bank, he could obtain such relief only by a suit in equity to which the bank and the receiver were parties.
Whether a decree based upon the facts set forth in the answer, even if established in a suit in equity, would be consistent with sound principle, or with the statute regulating the affairs of national banks and securing the rights of creditors, is a question upon which this Court does not express an opinion.
The purchase of this stock by the bank under the circumstances was ultra vires, but that did not render the purchase void.
The case is stated in the opinion of the Court.