Apsey v. Kimball

Background

A federal receiver sued two people who had held stock in the First National Bank of Chelsea after the bank suspended business. The bank’s original corporate life was twenty years and the shareholders had the chance to accept or decline a statutory extension. The two individuals gave timely written notice that they did not consent to the extension, named an appraiser, and otherwise followed the withdrawal steps the law required, but a full appraisal was never completed and the bank later failed and was assessed by the receiver.

Reasoning

The central question was whether those who followed the statute’s withdrawal steps remained shareholders and thus could be assessed when the bank failed. The Court held that the statute itself provided the method for a non-consenting shareholder to leave the association. Because these people gave the required notice, appointed an appraiser, and made reasonable efforts to complete the appraisal, they had done all the law required. The fact that the bank or its representatives did not finish the appraisal or remove their names from the books did not keep them liable.

Real world impact

The decision means persons who properly use the withdrawal procedure in that statute are no longer treated as shareholders for creditor assessments when a bank fails. Creditors cannot collect assessments from those who complied with the statutory steps even if administrative steps remained incomplete through no fault of the withdrawing shareholder.