WHITE, MCKENNA and Day, JJ., dissenting. 202 U. S. was to sever all connection between such stockholder and the bank, wholly without reference to the consent of the then existing creditors, and to substitute the person to whom the valid and completed transfer had been made. Now, whilst it is true that the statute requires a registry of stockholders to be kept and transfers to be noted thereon, in view of the unlimited right of a stockholder to make a lawful transfer without the consent of the creditors existing at the time of the transfer, it cannot be said that the statute gave to the creditors a right to prevent transfers or presupposed that they would contract with the bank upon the faith of a particular state of the registry, when by the statute that registry could be changed by lawful transfers without the power of the creditor to complain. It is true also that the statute declares (Rev. Stat. §5139) that when a lawful transfer is made the shareholder "shall succeed to all the rights and liabilities of the prior holder of such shares." But this does not imply that existing creditors have a contract right against the transferring stockholder, since the right of such stockholder to make a lawful transfer and substitute another for himself without the consent of the creditors is an affirmance instead of a negation of the absence of the contract relation between the transferring stockholder and then existing creditors. And this is emphasized, since the new stockholder becomes ratably liable not only for debts contracted after the transfer made to him but for all the prior unsatisfied debts. Of course by the statute as originally enacted and as now existing (Rev. Stat. §5151), those who were stockholders in a national bank at the time of its failure are made equally and ratably liable to the amount of their stock for the debts of the bank then existing. But this provision does not destroy or impair the right to make a lawful transfer before the failure of a bank, since it only attaches the double liability to those who have not made a lawful transfer and who are in contemplation of law stockholders at the time of the failure. Harmonizing these two sections of the statute, they import the purpose to secure the great advantage result 202 U.S. WHITE, MCKENNA and DAY, JJ., dissenting. ing from the untrammelled power to make a lawful transfer of stock as pointed out by this court in Earle v. Carson, supra, and First National Bank v. Lanier, 11 Wall. 369, 377, and yet at the same time when failure ensues to give the then existing creditors the benefit of the double liability of the then existing stockholders. And when the repeated adjudications of this court are considered to me it seems that they expound the text and spirit of the statute as above pointed out, and, therefore, the rule now announced cannot be consistently upheld without overthrowing those decisions and substituting a new statute. In National Bank v. Case, 99 U. S. 628 (decided in 1878), the principle controlling the question of the liability of a stockholder in a national bank who had made a fraudulent disposition of his stock was considered. On the one hand it was insisted that as the stockholder had a right to transfer his stock without the consent of then existing creditors of the bank, every "out and out" transfer, as it was termed, should be held to be efficacious to relieve from liability at the date of the failure. On the other hand it was contended that if a transfer was made with a knowledge of the insolvency of the bank and to escape the statutory liability, the stockholder remained a stockholder, and was, therefore, subject to the double liability. The latter contention was sustained. The court recognized the fact that in England, when a stockholder had a right to dispose of his stock at pleasure, the rule was that every out and out transfer which was not a mere sham severed the connection of the stockholder with the corporation, thus causing him to be no longer a stockholder and leaving him entirely free from liability. But the American rule was held to be different. Expounding that rule, it was declared that both in the case where a stockholder made a sham sale or transferred his stock to an irresponsible person, with knowledge of the insolvency of the bank, and for the purpose of escaping the statutory liability, the transferrer remained a stockholder for the purpose of the statutory double liability. In other words, WHITE, MCKENNA and DAY, JJ., dissenting. 202 U.S. the court declared that in both such cases the transfer, in legal intendment, at the election of creditors would be held to be a mere simulation, leaving the stockholder, despite such transfer, continuously subject to his statutory liability. Without attempting to review all of the many other cases decided by this court involving controversies on this subject, it may not be doubted that the substantial doctrine of the case just reviewed has been reiterated time and time again and is the settled law of this court. Thus in Bowden v. Johnson, 107 U. S. 251, Johnson was the holder of stock in a national bank. On February 14, 1874, his stock was transferred on the books of the bank in the name of a Mrs. Valentine. On May 26, 1874, more than three months after such transfer, the bank failed and the Comptroller made an assessment to pay the debts existing at the time of the failure, and the suit had for its object the enforcement of this assessment against Johnson. It was found that the transfer to Mrs. Valentine was not a sham, but that at the time it was made the bank was insolvent, that Johnson knew of the insolvency and transferred his stock to avoid liability and with the knowledge that Mrs. Valentine was irresponsible. Coming to consider the contention, under these facts, that Johnson could not be held for the debts existing at the time of the failure, the court expressly reiterated the ruling in the Case case, held that a shareholder who made a fraudulent transfer of the kind under consideration continued liable as a stockholder, and the assessment which had been made by the Comptroller for the debts existing at the time of the failure was adjudged to be valid, although such failure happened months after the fraudulent transfer. In the course of the opinion the court said (p. 261): "But where the transferrer, possessed of information showing that there is good ground to apprehend the failure of the bank, colludes and combines, as in this case, with an irresponsible transferee, with the design of substituting the latter in his place, and of thus leaving no one with any ability to respond for the individual liability imposed by the statute, in respect 202 U. S. WHITE, MCKENNA and DAY, J.J., dissenting. of the shares of stock transferred, the transaction will be decreed to be a fraud on the creditors, and he will be held to the same liability to the creditors as before the transfer. He will be still regarded as a shareholder quoad the creditors, although he may be able to show that there was a full or a partial consideration for the transfer, as between him and the transferee. "The appellees contend that the statute does not admit of such a rule, because it declares that every person becoming a shareholder by transfer succeeds to all the liabilities of the prior holder, and that, therefore, the liabilities of the prior holder, as a stockholder, are extinguished by the transfer. But it was held by this court in National Bank v. Case, 99 U. S. 628, that a transfer on the books of the bank is not in all cases enough to extinguish liability. The court, in that case, defined as one limit of the right to transfer, that the transfer must be out and out, or one really transferring the ownership as between the parties to it. But there is nothing in the statute excluding, as another limit, that the transfer must not be to a person known to be irresponsible, and collusively made, with the intent of escaping liability, and defeating the rights given by statute to creditors. Mrs. Valentine might be liable as a shareholder succeeding to the liabilities of Johnson, because she has voluntarily assumed that position; but that is no reason why Johnson should not, at the election of creditors, still be treated as a shareholder, he having, to escape liability, perpetrated a fraud on the statute. This is the view enforced by the decision of the Chief Justice in Davis v. Stevens, 17 Blatchf. 259." Again, in Stuart v. Hayden, 169 U. S. 1, where it was found that a transfer of stock in a national bank had been made with knowledge on the part of the transferrer of the insolvency of the bank, and to escape the double liability, the court, after approvingly citing the previous cases, said (p. 14): "And the bank having been, in fact, insolvent at the time of the transfer of the stock-which fact is not disputed-he WHITE, MCKENNA and DAY, JJ., dissenting. 202 U. S. (the transferrer) remained notwithstanding such transfer, as between the receiver and himself, a shareholder subject to the individual liability imposed by section 5151." I need not stop to refer to the subsequent adjudications of this court which expressly reiterate the rulings just reviewed, since they are approvingly cited in the opinion of the court, and indeed are made the basis of the ruling. But to my mind it. seems clear that the limited liability of Dewey which the court now applies to the eighty shares is repugnant to the previous decisions, and therefore the effect of citing approvingly the cases in question and yet deciding, as the court now does, is but at one and the same time to approve and disapprove the previous decisions. Let me briefly state why I think this conclusion inevitable. Certain it is that the previous cases expressly and unequivocally decided that a stockholder who in fraud of the liability as stated makes a transfer of his stock remains at the election of the creditors a stockholder to the same extent as if the transfer had not been made or as if it had been a mere sham. Can there be doubt of this in view of the language of the Case case announcing the American rule, of the express statement to that effect in the Bowden case, and the fact that in that case the liability, under the call of the Comptroller, was enforced for the debts existing months after the completed transfer and not merely for the unsatisfied debts existing at the time of the transfer? Is this not certain also in view of the declaration in Stuart v. Hayden, that because of the fraudulent transfer the stockholder continued to be liable under the statute? And mark, in the Hayden case, as if ex industria to exclude the conception that the fraud was only relative as to creditors existing at the time of the fraudulent transfer, the court expressly declared that the liability of the transferring stockholder was to the receiver and according to the terms of the statute. And this, but in different form, reiterated the declaration made in the Bowden case, that the fraud was a fraud on the statute, and not, therefore, |