MR. JUSTICE CARDOZO delivered the opinion of the Court.
In a suit for the enforcement of the personal liability imposed by the statute then in force upon shareholders in national banks, petitioner, the defendant in the suit, disclaimed liability, first, upon the ground that before the assessment of the shareholders his ownership of the shares was divested by the filing of a bankruptcy petition and the appointment of a trustee thereunder, and, second, upon the ground that if ownership continued, liability was extinguished by virtue of a discharge in bankruptcy. Whether the defense should have prevailed is now to be determined.
Petitioner was adjudicated a bankrupt on April 21, 1933, and on July 31, 1933, was granted a discharge. At the filing of the bankruptcy petition he was the owner of ten shares of stock of the Union National Bank of Atlantic City, New Jersey. Since September 30, 1931, the Union bank had been in course of voluntary liquidation (under
In defense of the suit petitioner asserts, as we have seen, that the ownership of the stock was divested by the bankruptcy, and also that liability was barred, if ownership remained. To Estimate correctly the worth of these defenses we must have some other facts before us. The record shows that on October 27, 1933, by order of a referee, the trustee in bankruptcy was "authorized and directed
Upon these facts, established by the pleadings and supporting affidavits, the receiver moved for judgment. The District Court held the defenses insufficient, and gave judgment against the defendant for the amount of the assessment. 16 F.Supp. 494. There was an appeal to the Court of Appeals for the Third Circuit where the judgment was affirmed. 85 F.2d 885. An important question of bankruptcy law being involved, a writ of certiorari issued from this court.
We dismiss with a few words the petitioner's contention that at the moment of the bankruptcy he lost the little to the shares, and became relied thereby of the liabilities attendant upon ownership, though his name was left continuously on the stock book of the bank. Cf. Richmond v. Irons, 121 U.S. 27, 58; Matteson v. Dent, 176 U.S. 521. Whatever title or inchoate interest may have passed to the trustee was extinguished by relation as of the filing of the petition when the trustee informed the court that the shares were burdensome assets, and was directed by the court to abandon and disclaim them. American File Co. v. Garrett, 110 U.S. 288, 295; Sparhawk v. Yerkes, 142 U.S. 1, 13; Sessions v. Romadka, 145 U.S. 29, 39; Dushane v. Beall, 161 U.S. 513; First National Bank v. Lasater, 196 U.S. 115. In such case "the title stands as if no assignment had been made." Sessions v. Romadka, supra, p. 52. Cf. Mills Novelty Co. v. Monarch Tool & Mfg. Co., 49 F.2d 28, 31; In re Frazin, 183 Fed. 28, 32; Kirstein Holding Co. v. Bangor Veritas, Inc., 131 Me. 421, 424; 163 Atl. 655. A precise analogy is found in the law of gifts and legacies. Acceptance is presumed, but rejection leaves the title by relation as if the gift had not been made. See Albany Hospital v. Albany Guardian Society, 214 N.Y. 435, 441, 442; 108 N.E. 812, collecting many cases. For the purposes of the case at hand the result will
The petitioner being held to be the owner of the shares, we pass to the closer question whether the effect of the discharge in bankruptcy was to extinguish the personal liability that was attached to his ownership as a statutory incident.
Liabilities are not discharged in bankruptcy unless claims thereon exist in favor of claimants whose identity is determinable at the date of the petition. Zavelo v. Reeves, 227 U.S. 625, 631; Everett v. Judson, 228 U.S. 474, 479. If the Union bank at that date had been a going concern, the possibility that it might later become insolvent or resort to liquidation, would not have furnished an occasion for stripping the shares of their statutory incidents by the device of a discharge in bankruptcy. In such a situation there would be no claim to be proved and no one capable of proving it. But at the date of this petition, the Union bank was not a going concern with the liability of shareholders a latent possibility. It was in course of liquidation by a voluntary liquidator. Not only was it in liquidation, but according to the evidence it was already known to be insolvent. Liquidation coupled with insolvency is the critical event which is capable of transforming a potential liability into one presently enforcible, as soon as a qualified claimant appears upon the scene. The method of winding up determines who the spokesman for the claim shall be. If a bank is in course of liquidation by the Comptroller of the Currency, the personal liability of stockholders is enforcible upon the direction of the Comptroller, at the suit of a receiver. Act of June 30, 1876, c. 156, § 1, 19 Stat. 63; 12 U.S.C. § 191. Cf. 12
In saying this we are not unmindful that a comprehensive suit in equity is commonly the proper remedy against shareholders where insolvency becomes manifest in voluntary liquidation. 12 U.S.C. § 65. The remedy does not exclude the presentation of a proof of claim in bankruptcy, the amount to be liquidated under the direction of the court by bill in equity or otherwise. Cunningham v. Commissioner of Banks, supra; United States v. Illinois Surety Co., supra, King v. Pomeroy, 121 Fed. 287; Irons v. Manufacturer's Nat. Bank, 17 Fed. 308, 314; 27 Fed. 591. Cf. Hightower v. American Nat. Bank, 263 U.S. 351; Wyman v. Wallace, 201 U.S. 230. By the mandate of the statute (Bankruptcy Act § 63b; 11 U.S.C. § 103b): "Unliquidated claims against the
Liquidation being possible, the claim is not defeated though there was uncertainty as to its amount at the filing of the petition. Maynard v. Elliott, supra. Yet even the amount was certain, if we are to credit the defendant's statement. By this it appears that long before the bankruptcy the necessity for an assessment to the amount of the par value of the shares had become obvious to the liquidating agent and indeed to all concerned. The facts are far removed from those in Miller v. Irving Trust Co., 296 U.S. 256, where the claim had its origin in the covenants of a lease. For historical causes such covenants are sui generis (Manhattan Properties v. Irving Trust Co., 291 U.S. 320; Gardiner v. Butler & Co., 245 U.S. 603), but the analogy is still imperfect if that distinction be ignored. There the only cause of action belonging to the claimant was for a deficiency that was
Other objections are made to the operation of the discharge, but they need not detain us long.
There is argument that a claim against a stockholder is not provable in bankruptcy for the reason that it is founded on a statutory liability not subject to discharge. Bankruptcy Act § 63; 11 U.S.C. § 103. True indeed it is that the liability is created by a statute, and not solely by agreement. McClaine v. Rankin, 197 U.S. 154, 159, 161; Christopher v. Norvell, 201 U.S. 216, 225, 226. No disclaimer by the stockholder would be effective to avoid it. Even so, the liability, created though it is by statute, is quasi-contractual in its origin and basis. Chisholm v. Gilmer, 299 U.S. 99, 102; Shriver v. Woodbine Bank, 285 U.S. 467,
Finally argument is possible that the discharge is ineffective against the creditors of the bank for the reason that only a single creditor of Union was listed in the schedules. This, however, is unimportant if the creditor so listed (the liquidating agent) was in fact the only creditor, as the petitioner insists it was. Cf. Longfield v. Minnesota Savings Bank, 95 Minn. 54; 103 N.W. 706. If in fact there were other creditors whose names have been omitted, the burden rests on the respondent to make proof of such omission. Hill v. Smith, 260 U.S. 592, 595. The conclusion may well follow, if the omission shall be proved, that as to any creditors not listed the discharge is without effect.
Whether the petitioner will be able to make good the allegations of his answer, amplified and explained by the supporting affidavits, is not to be predicted now. Enough for present purposes that there are issues to be tried.
The decree should be reversed and the cause remanded for further proceedings in accord with this opinion.
"Also at the time that I was adjudicated a bankrupt as aforesaid it had been determined and from then until now it has been definitely determined and known that an assessment and requisition upon the shareholders of said Union National Bank to the total par value of the amount of stock outstanding would be necessary to pay the debts and claims of said bank." Extracts from petitioner's affidavit.