Weld v. City of Bangor.

DICKERSON, J. [After deciding that the shares in banks organized under the Currency Act of 1863 could be taxed by the State.] Before, however, municipal officers can rightfully assess a tax upon the shares of National banks, they must be authorized so to do by some law of the State. They are the creatures of State law, and derive their powers in this respect solely from State enactments.

Though the shares in National banks are not specifically mentioned in our Tax Act, we think they are included in section 5, chapter 6, of R. S.,“which authorizes the taxation of all shares in moneyed corporations." Sections 79 to 82, of chapter 47, R. S., prohibiting the establishment of banking companies in this State without authority of the Legislature, were not intended to apply to banking corporations created by authority of Congress, since such corporations may be legally established in the State without the consent of the Legislature.

According to the agreement of the parties the

Nonsuit must be confirmed.

CUTTING and BARROW, JJ., concurred.

KENT and TAPLEY JJ., concurred in the result.

WELD V. CITY OF BANgor.

(59 Maine, 416.)

Tax on National bank shares, how collected.

The plaintiff, a non-resident of Bangor, was duly assessed therein, upon his shares of stock in the First National Bank. After legal demand, the plaintiff, refusing to pay the tax upon the warrant of the collector of the city, issued April, 1870, was duly arrested by the sheriff of the county in the following May, for the tax, which the plaintiff then paid under protest, together with costs, to the officer, and he to the city treasurer. In assumpsit to recover the money thus paid, held, (1) that the collection of such tax is to be enforced in accordance with the general law; and (2) that chapter 209 of the Public Laws of 1868 related exclusively to the assessment, and in nowise affected the collection of taxes duly assessed under previously existing laws.

A

Weld v. City of Bangor.

SSUMPSIT for money had and received.

The plaintiff, during no part of the last twenty years, has been a resident of Bangor or had any property taxed there, except in 1867, when, without his consent, he was, in due and legal form, assessed there upon his shares of stock in the First National Bank, a banking institution established under the laws of the United States, located in Bangor.

After legal demand upon him, the plaintiff, refusing to pay the tax upon the warrant of the collector of the city issued in April, 1870, was duly arrested by the sheriff of Penobscot county on May 26, 1870, for the tax, when he paid it, under protest, together with costs of arrest to the sheriff, who paid it to the city treasurer. The action is to recover the money thus paid, and if not maintainable, the plaintiff to be nonsuit.

J. A. Peters and F. A. Wilson, for plaintiff.

H. C. Goodenow, city solicitor, for defendants.

Packard

APPLETON, C. J. The tax in question was duly and legally assessed under the provisions of the act of 1867 (ch. 126). v. Lewiston, 55 Me. 456; Abbott v. Bangor, 56 id. 310. The collection of this tax, like that of all other taxes duly assessed, is to be enforced in accordance with the general laws of the State on that subject.

The act of March 6, 1868 (ch. 209), relates exclusively to the assessment of taxes. The rules prescribed vary from those of the act of 1867 (ch. 126). The act is prospective in its operation. It looks only to the future. "All acts and parts of acts inconsistent with this act are hereby repealed." That is, a new rule as to the future assessment of taxes is established, nothing more.

The act in no way affects the collection of taxes, which have been duly assessed under previously existing law. It does not prohibit the enforcement of a tax as in Augusta v. North, 57 Me. 392. It in no way alludes to the collection of taxes.

Had the tax been paid as in Abbott v. Bangor, 56 Me. 310, its repayment could not have been enforced. The tax being duly assessed, and constituting a portion of what the plaintiff was equitably

Hagar v. Union National Bank.

bound to pay toward the public burdens, it can hardly be supposed that the Legislature intended to relieve him from a just liability. By a long neglect to pay his taxes, the plaintiff is not to be in a better condition than if he had promptly done his duty.

A National bank has a lien on and the right to hold a cash dividend as pledge for the indebtedness of the shareholder to the bank.

A National bank may attach the shares of a stockholder therein for his debt due the bank.

A National bank sued a shareholder therein for money due and attached his shares. Pending the suit he demanded payment of the dividends declared upon the attached shares, which was refused. He afterward settled the suit and brought an action for his dividends, without renewing his demand. Held, that the demand while the shares were attached was a nullity, and as dividends were not payable until demanded, the action could not be maintained.

A

CTION of assumpsit to recover dividends declared by the defendant, a National bank, on forty-five shares of stock owned by the plaintiff.

Prior to the time such dividends were declared the bank had sued the plaintiff upon two notes due from him to the bank and had attached his shares of stock. After the dividends were declared, but while the suit was pending, the plaintiff demanded the dividends and they were refused. He subsequently settled the suit and then brought this action, without having renewed his demand for the dividends. One of the dividends was earned but not declared before the attachment of the share.

J. W. Spaulding, for plaintiff.

J. H. Drummond, for defendant.

Hagar v. Union National Bank.

VIRGIN, J. There are two fatal objections to the maintenance of this action:

I. A bank has the right to hold a cash dividend as pledged for the indebtment of the shareholder to the bank.

It has been expressly decided in the Supreme Court of the United States, that since the National Bank Act of June 3, 1864, went into effect, neither by the act itself, nor by any by-law based upon any authorized provision in the "articles of association," can a National bank create a lien upon the shares of its stockholders for their indebtment to the bank. That such a lien is contrary to the whole policy of the act is manifested by the repeal of such a provision in the act of 1863, and inconsistent with the spirit of section 35 in the act of 1864. Bank v. Lanier, 11 Wall. 369 (ante, p. 70); Bullard v. Bank, 18 id. 589. See, also, Evansville Nat. Bank v. Metropolitan Nat. Bank, 2 Biss. 527 (ante, p. 189). To the same purport is Bank of Louisville v. Bank of Newark, 10 Bush, 367.*

The rule has long prevailed in many jurisdictions that a corporation has no implied lien on the shares of its stockholder for debts due from him and cannot hold them against a purchaser or attaching creditor (Sargent v. Franklin Ins. Co., 8 Pick. 90; Mass. Iron Co. v. Hooper, 7 Cush. 187); but that a bank deals with its stockholders in the same manner as it does with its general customers, taking the same security and not relying upon its stock. A different rule was adopted in relation to dividends declared. They were considered as so much money in the possession of the bank belonging to the stockholder, but which should be considered as pledged toward the payment of any just debt then due from him. Bates v. N. Y. Ins. Co., 3 Johns. Cas. 238. This rule was considered a "reasonable one," and was adopted by the court in Sargent v. Franklin Ins. Co., supra. We fail to perceive any real objection to such a rule. It is not inconsistent with any provision in the Bank Act, and neither is it in conflict with any principle of public policy. It cannot affect the free sale and transfer of shares, for the dividend does not pass with the transfer of the share, being the property of him who is the shareholder when it is declared. So long, then, as the

*The following is all that is said in this case on the subject:

"The claim of the Louisville Bank to a lieu on the stock under and by virtue of its articles of association or by-laws cannot be maintained. This question is settled beyond all controversy by the two cases of the Bank v. Lanier, 11 Wall. 369, and Bullard v. Bank, 18 id. 589. No banking association organized under the National Currency Act of 1864 can create or hold such liens."

Hagar v. Union National Bank.

plaintiff's overdue notes remained unpaid, he could not recover the dividends declared upon his shares, because of this equitable lien. And neither could he maintain an action therefor without a previous demand. Scott v. Cent. R. R. Co., 52 Barb. 45. The law does not require a bank, after declaring its dividends, to hunt up and tender to its stockholders their respective dividends, in order to avoid the liability of actions therefor. Dividends are usually declared payable at the banking-room, whither the owner may go and there on demand receive them-provided his indebtment to the bank does not contravene. To be available the demand should have been made when and where the bank was bound to pay. If made while the money was considered as pledged for the indebtment of the demander, it would be as useless as if made before the dividends had been declared. As well might a mortgagor of chattels demand them before he had discharged the debt secured thereby, and after payment bring his action without renewing his demand. In the case at bar the plaintiff, after dissolving the lien by payment of his notes, could doubtless have obtained the dividends by asking for them at the banking-room; but, for some reason, he chose to sue without any other demand; and we think his action was prematurely commenced. Hagar v. Randall, 62 Me. 439.

II. It had a special lien created by the attachment of his shares on June 21, 1872, which continued until July 10, 1873, when the attachment was dissolved.

The net profits of a bank remain the property of the bank and are inseparable and undistinguishable from it, and will pass by the name of stock by sale, bequest or levy, until by the resolution of the directors, they are separated and set apart as dividends. This almost necessarily results from the utter impracticability of ascertaining the real circumstances of the bank until the expiration of the full period for which they are declared; and when declared they become the property of the then stockholders. Goodwin v. Hardy, 57 Me. 143; March v. Eastern R. R. Co., 43 N. H. 515; Foote, appellant, 22 Pick. 299; Granger v. Bassett, 98 Mass. 469 ; Minot v. Paine, 99 Mass. 101.

Shares are a peculiar property, but are declared by all modern charters to be personal property. The title is a legal one, created and defined by law, and it may be transferred by contract, bequest or levy. The mode for securing a lien thereon and passing the title by levy is expressly provided by our own statute, as follows: