The opinion of the court was delivered by: GESELL
On November 18, 1963, a group of business and professional men submitted to the Regional Comptroller of the Currency an application to organize a national bank in the northeast section of Washington, D.C. Preliminary approval of this application was granted by the Comptroller in early February, 1964. The bank was formally organized on May 15, 1964, and was granted a charter, authorizing it to commence business, on August 31 of the same year.
On February 5, 1964, plaintiff, who was not an organizer, subscribed to 2500 shares of the stock of the bank to be organized. The price was $10 per share. The subscription form stated that the subscription was contingent upon approval by the Comptroller of the application for permission to organize and was subject thereafter to full or partial acceptance by the Organization Committee of the bank.
The Stock Committee of the United Community National Bank (in organization) wrote plaintiff, dated May 1, stating that the "Board of Directors" had approved an allocation to him of 2500 shares at a total cost of $25,000. The letter stated that it was necessary that the stock be paid for prior to the initial stockholders' meeting in the middle of May.
Plaintiff did not pay and did not attend the stockholders' meeting on May 15. At that meeting a Board of Directors was elected and at the board's organizational meeting, on the same day, the Organization Certificate was executed and the Articles of Association adopted. At neither meeting was the subject of stock subscriptions discussed.
On June 4, defendant, by its stock committee chairman, wrote plaintiff that the $25,000 due on his allocated shares was payable in full on or before June 10. The letter concluded, "Balances unpaid as of the above date will be forfeited and reassigned."
On June 10, plaintiff, by agreeing to pledge the 2500 shares to the Riggs National Bank, secured a loan of $25,000. The loan was handled by William A. Bryarly, Jr., an officer of the Riggs bank who had been assisting defendant's organizers and who was himself a subscriber. Bryarly mailed defendant a cashier's check for $25,000 to purchase the 2500 shares, with a letter signed by plaintiff instructing the defendant to forward the shares to Riggs. The cashier's check was dated June 10, signed by Bryarly for the Riggs National Bank, and was payable to defendant for credit of plaintiff. The check was mailed on June 10; defendant had no actual notice of the loan or the check until the latter was received on the morning of June 11.
In late June or early July a form letter was sent to plaintiff acknowledging receipt of the check "after June 10, 1964, the deadline for payment of subscriptions to bank stock." The defendant advised that:
"Your check is being held until a determination can be made as to the amount of stock available for distribution. This determination will be made shortly after August 1, 1964. You will then be advised as to the amount of stock allocated to you, if any, and the above check will be applied accordingly."
At its September 9 meeting, defendant's Board of Directors authorized an allocation of ten percent of the stock requested by those whose payments had been received after the June 10 deadline. Accordingly, the bank wrote plaintiff on September 10. It returned his check for $25,000 and offered him 500 shares at $10 each, payment to be made by September 24. Plaintiff's attorney resubmitted the check on September 17 and asked that the 2500-share subscription be honored. Defendant replied on September 22 by returning the check and stating:
Plaintiff did not receive the 2500 shares nor did he take up the 500 shares allocated to him on September 10. This ...