Magruder v. Colston. him. The bank closed its doors on the 3d day of May, at 3 o'clock, P. M., and turned out to be insolvent, and this suit was brought by the receiver to recover from the appellees, as stockholders of the bank, the par value of the fifty shares of stock, the certificate of which had been issued to them, and by them transferred to Colston. Upon these facts the appellant's third and fourth prayers asked instructions that if the jury should find that the transfer of the fifty shares of stock was made by the appellees to Colston, with a view and for the purpose of evading or escaping their responsibility under the 12th section of the National Banking Act, such transfer constituted no defense to this action, and did not relieve the appellees from the responsibility which would have attached to them in case the transfer had not been made, and that, if they had so sold the stock under their agreement with Bayne & Co., as a pledge to secure a loan of money, they were still responsible in law to the same extent as if they had been the absolute owners and had sold the legal title to the stock. The appellees' second prayer contained the converse of these propositions. The 12th section of the National Banking Act provides for the personal liability of stockholders of National banks for the debts of the corporation, in proportion to the amount of stock held by them, and enacts that every person, becoming a shareholder by transfer, shall succeed to all the rights and liabilities of the prior holder of such shares. After a careful examination of the authorities cited in the argument, we are of opinion that persons who hold stock in pledge, the certificates of which stand on the books of the bank in the name of the pledgee, are, in contemplation of the Banking Act, stockholders, and, so long as they thus hold the stock in pledge, are responsible to the creditors of the bank in proportion to the amount so held. The reason for this is obvious. The stock stands on the books of the bank in his name and he is thus held out to the public as shareholder, and persons dealing with the bank have no means of knowing the nature of the contract under which he holds the stock, and have a right to presume, and are led to believe that he is the absolute owner of it, and it is but fair to presume that they deal with the bank upon the faith and credit of parties thus appearing as stockholders. Stockholders are those who appear on the books of the bank as owners of shares, and who are entitled to manage its affairs, and they can only throw off the liabilities incident to that relation by transferring the stock. Until Magruder v. Colston. this is done they continue to be stockholders within the meaning of the Banking Act. If we depart from the terms of the law and inquire into the equities which may exist between the stockholders and third persons, it cannot fail to embarrass creditors in seeking a remedy for the wrongs which may have been done by the corporation. If creditors must look beyond the legal title, as exhibited by the books of the bank, they can never know against whom to proceed. Rosevelt v. Brown, 1 Kern. 153; Adderly v. Storm, 6 Hill, 624; Worrell v. Judson, 5 Barb. 210; Crease et al. v. Babcock et al., 10 Metc. 545; United States Trust Co., of New York, Receiver, v. The United States Fire Ins. Co., 18 N. Y. 224; Holyoke Bank v. Burnham et al., 11 Cush. 187. These cases arose under State laws making stockholders in corporations personally liable for the debt of the corporation, but the principles announced in them are applicable to cases arising under the act of Congress of 1864, chapter 106. That act makes stockholders only personally liable, and the appellees had parted with their stock when the bank failed, and had, therefore, ceased to be stockholders. But it was contended by the counsel of the appellant that inasmuch as the assignment and transfer of the stock was made to Colston, under the circumstances detailed in the proof and for a nominal consideration, and with the view and purpose of avoiding any complications and difficulties in which a failure of the bank might involve them, the transfer was a fraud upon the creditors of the bank, and the appellees ought, therefore, to be held to the same liability to which they would have been subjected had they never made the transfer. It must be recollected, however, that they had no right, under their contract with Bayne & Co., to hold the stock as their own property, but had to sell it after the default of the latter in repaying the loan. The only case that bears directly upon this question to which we have been referred, or which we have been able to find, is that of Holyoke Bank v. Burnham, reported in 11 Cush. 187. In that case Joseph Burnham transferred certain shares of stock of a manufacturing company to Charles Burnham, who gave his note to Joseph for eight hundred dollars, and the agreement between the parties provided that any time within two years either party should have the right to rescind the sale by a re-transfer of the shares and a surrender of the note. Within the two years the sale was rescinded by Joseph surrendering the note, and Charles re-transferring the shares. Suit was brought against Charles as Magruder v. Colston. shareholder of the corporation, by one of its creditors under the personal liability act of the Legislature of Massachusetts, and it was held that as the shares of stock had been re-transferred under a stipulation which formed part of the original contract between the parties, Charles Burnham was not liable, notwithstanding the transfer had been made for the purpose of avoiding liability under the act. The case was heard by five of the six judges of the Supreme Court of Massachusetts, and Judge DEWEY, in delivering the opinion of the court, says: "As to the second question, the right of the defendant to re-transfer to Joseph Burnham the eleven shares and thus divest himself of subsequent liability arising from his holding stock, the contract between the parties made at the time of the transfer, authorizing such re-transfer at the election of the parties at any time within two years, becomes material, and we are of opinion that under the agreement made at the time of the transfer, and the re-transfer being only an act in execution of it, it is not obnoxious to the charge of having been done in fraud of creditors, although its leading object and purpose might have been, on the part of the defendant, to avoid liability as a member of said corporation. It is unnecessary to consider, therefore, the general question how far persons owning shares in a manufacturing company may, by transferring them to some third person with a view to avoid liability as such owner to the creditor, effectually do so in the absence of such original contract for a re-transfer.” * * * In this case it was part of the original contract between Bayne & Co. and the appellees, that the latter should sell the stock upon the failure of the former to repay the loan upon call, and the sale to Colston was only in execution of it. These facts are very similar to those in the case of the Holyoke Bank v. Burnham, and the justice and reason of the principle applied in that case commend themselves to our approval, and we think it ought to be applied to this, and so applying it we find no error in the rulings of the court below. Judgment affirmed. Ordway v. The Central National Bank of Baltimore. ORDWAY V. THE CENTRAL NATIONAL BANK OF BALTIMORE.* Action against National bank after it has gone into liquidation · Penalties for taking usurious interest — Action for, in State courts. An action may be prosecuted against a Nationa, bank, although it has resolved to go into liquidation and has provided for the redemption of its circulating notes.+ An action lies against a National bank in a State court to recover the penalties imposed by Congress for exacting unlawful interest.‡ A CTION of debt against the Central National Bank of Baltimore, to recover double the amount of interest taken by the bank of the plaintiff in alleged violation of the 30th section of the National Banking Act. Marshall & Fisher, for appellants. Machen & Gittings and Geo. H. Williams, for appellee. ALVEY, J. If it be true, as suggested by the appellee, that the corporation was actually dissolved at the expiration of six months from the 15th of July, 1874, then, of course, this action must abate; for it is perfectly well settled that a suit can no more be prosecuted and judgment recovered against a dead corporation than against a dead man. Mumma v. The Potomac Co., 8 Pet. 281; National Bank v. Colby, 21 Wall. 615. But has the corporation been dissolved? We think not. It has suspended active operations as a banking association has resolved to go into a state of liquidation - has deposited the money with the Treasurer of the United States, with which to redeem its outstanding circulation, and has received, by re-assignment, its bond deposited to secure the payment of its notes, and it thenceforth stands discharged from all liability on account of such circulating notes, but the statute has not declared that these acts, of their own *To appear in 46 Maryland Reports. + See Bank of Bethel v. Pahquioque Bank, ante, p. 77; Green v. Walkill National Bank, post. # See State v. Tuller, ante, p. 375; Missouri River Telegraph Co. v. National Bank, ante, p. 401; Newell v. National Bank, ante, p. 501. Ordway v. The Central National Bank of Baltimore. mere operation, shall effect an absolute and total dissolution of the corporation. And it would be strange if such were the case. There are many other obligations to be provided for beside the circulating notes, and there may be many rights to be protected which would require the continued existence of the corporation. It is not reasonable to suppose Congress intended that, upon simply resolving to go into liquidation, and providing for the redemption of its circulating notes, the banking association should be dissolved. If by such acts it were dissolved, all actions by or against it would abate and parties might be left utterly without remedy for the enforcement of the plainest right or recompense for the most grievous wrong As we read the sections 5221, 5222, 5223 and 5224, of the Rev. Stats., no such result was ever contemplated. On the contrary, those sections would seem plainly to contemplate the continued existence of the corporation after the re-assignment of the bonds, and the certificate of discharge from the liability for the circulating notes of the banking association; and such would seem to be the construction of the Supreme Court of the United States in the case of Kennedy v. Gibson, 8 Wall. 498, 506, and Bank of Bethel v. Pahquioque Bank, 14 id. 383, 398. There has been no actual and formal surrender of franchises, and no judicial declaration of dissolution; and acts of a more decisive character than those relied on in this case have been held to be insufficient to operate a final dissolution. State v. Bank of Maryland, 6 Gill & Johns. 205; Brinkerhoff v. Brown, 7 Johns. Ch. 217; Boston Glass Manuf. Co. v. Langdon, 24 Pick. 49; Ang. & Am. on Corp., § 773. It would seem, therefore, that the learned judge below was entirely correct in holding that there had been no abatement of the action by dissolution of the corporation. The next question to be considered is that raised by the demurrer to the appellant's amended declaration; and that is, whether the action can be sustained in the courts of this State, the action being founded on a statute of the United States ? The action is one of debt, brought by the appellant against the appellee, under the 30th section of the National Banking Act, approved June 3, 1864, to recover double the amount of interest unlawfully taken by the appellee. In the section referred to, it is provided that the knowingly taking, receiving, reserving or charging a rate of interest greater than the rate fixed by the previous |