
    SHAW v. STATE ex rel. MOTHERSEAD.
    No. 15996
    Opinion Filed Nov. 24, 1925.
    1. Hanks and Banking — Insolvency of State Bank — Stockholders’ Liability — Defense of Nonownership.
    A person who bas knowingly permitted his nialme to appear upon bank records as the unconditional owner of stock of the bank, for a period of two years, will noti be iiejrtmtted to make the defense that the stock was held as collateral, in an action against 'him by the Bank Commissioner, for recovery of ian amount equal to the par value of the stocks as provided by statute, where the bank becomes insolvent.
    
      2. Same — Liability Sustained.
    Record examined; held, to be sufficient to support judgment in favor of the' Bank Commissioner.
    (Syllabus by Stephenson, C.)
    Commissioners’ Opinion, Division No. 4.
    
      Error from District Court, Kiowa County; T. P. Clay, Assigned Judge.
    Action by tbe State of Oklahoma, on tbe relation of O. B. Mothersead, against M. V. Shaw to recover a sum of money equal to the par value of stock appealring in the name of -the defendant. Judgment for plaintiff, and defendant brings error.
    Affirmed.
    Rummons & Hughes, for plaintiff in error.
    Tolbert, Hunter & Tolbert, for defendant in error.
   Opinion by

STEPHENSON, C.

The .state of Oklahoma, on the relation of the acting Bank Commissioner, commenced its action against M. V. Shaw for the recovery of a sum of money equal) to the par value of the bank stock in the State Bank of Mountain View, appearing in the name of the defendant, as the unconditional owner. The action was commenced, as provided by statute, after the bank became insolvent, and was placed in charge? of a liquidating .agent.

The defendant filed his answer, which was in substance: - (1) A general denial of liability. (2) That the stock w.as held as collateral security for the payment of indebtedness owing by the president of the-bank to the defendant, and that the defendant was not the -owner of the stock. The . trial of the cause resulted in an instructed verdict for the plaintiff and against the defendant. The defendant has appealed the cause here and assigns several of -the proceedings had in the trial of the cause as error for reversal -here: (1) That the verdict and judgment are contrary to the evidence and the law. (2) Error of the court in instructing the jury to retua-n a verdict against the defendant.

The plaintiff in error makes the point that the evidence is insufficient to support the verdict and judgment in respect to the insolvency of the bank. The evidence offered by the .state was sufficient to establish the insolvency of -the bank, and the defendant did not offer -any evidence in rebuttal or cross-examine the witness testifying upon this question.

The defendant in substance testified: That the president of the bank desired to purchase the shares of stock owned by one of the stockholders -of the hank, and borrowed $3,-. OOO from the defendant to make the purchase; that the defendant made the loan upon the promise of the bank president to pledge the stock so purchased from the loan, as security fqr the payment of the money borrowed from tbe defendant; that the defendant was advised that the stock had been placed in his safety deposit box at the bank as a pledge for tbe loan. The defendant further testified tbait he examined the certificate of stock about 60 days after ist had been placed in his safety box, and found that the same showed that the stock was issued in his name; that he advised -the president that the stock that was to be purchased from the former owner was the stock to be pledged, and requested that such purchased stock be substituted for the stock issued to him in his own name. The evidence further shows that the stock in question was carried in the records of the bank in tbe name of the defendant as the unconditional owner for a period of two years.

The court no doubt took the view at the close of the trial that the evidence of the defendant did not constitute a defense to the action commenced against him by the Bank Commissioner for the recovery of a sum of money equal to the pair value of the stock as provided by statutes on account of the insolvency of the bank. There being no dispute upon the evidence offered by the state to show the insolvency of the bank, there was no issue of fact then for submission' to tbe jury, and tbe court instructed tbe jury to return its verdict for the plaintiff. There is sufficient competent evidence to suppojrt the issue in favor of the plaintiff on the question .of the insolvency of the bank of Mountain View.

The judgment ought to be affirmed if the trial court was correct in its views that the evidence of the defendant did not constitute a defense to the action. The evidence of the defendant places him in the attitude of per: mitting the bank of Mountain View to hold him out to the public as a bona fide -owner ®f $2,000 worth of stock for a period) ofl two years. Under the statutes and -the law, the pledgee, or holder of stock placed with him -as collateral security for a debt 0|i pledge, will not be liable for the penalty provided in case of insolvency of the hank, as owner of the stock, unless such pledgee .permitted himself to be held out to the public, according to the records of the bank, as owner of the stock. Even though the defendant received the stock as a pledge to secure the payment -of a loan, he will not he permitted to plead and prove this as a defense in this action, where he has permitted himself to be held .out? to the public, by the ¡records of the hank, as owner of the stock for a period of two yeajc's, nntil the insolvency of the bank became a fact. The defendant had ample opportunity to cause the records of the bank to be corrected! to speak the truth long before the institutioni became insolvent. Blackert v. Lankford, Bank Commissioner, 74 Okla. 61, 176 Pac. 532.

It is recommended that the judgment be affirmed.

By the Court: It is so ordered.

Note. — >See under (1) 7 O. J. p. 504. §63. (2) 4 C. J. p. 1129, §3122.  