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the ease of Corker v. Sopor, 6? ied* (2d) 180, wherein the
Circuit Court ef Appeal* for the i ifth Circuit held that where a bank
president organised a oorporation to hold shares of bask etoek as hie
mer* Instrument or agemoy he alee will be liable for assessments on
the bank stock, is a case In which the oorporation was a mere sham
with only a aossimal capital of #10 and never transacted aay business
on Its own acoouat whatever • The facts regarding the organ! tat Ion
of the coapany are stated as follows in the opinioni




"the facts as to the Laurels Gompaay and Its
organisation aret On February M the eharter of the
Laurent Investment Company, In«#, on a petition filed
Deeeaber 2T, 1927, was issusd, with as authorised
capital stock of #10, Corker and his two sons incorporators* On the neat day the capital stool:
was subscribed for, bylaws were adopted* the subscription of F* 0* Corker as agent for the Laurens
Conjpaagr to 150 shares of the Lublin Bank stock was
ratified, and it was resolved that the Laurent
Company purchase !tSrs« Corker's stoek in the bank,
and that of appellant, except Zl shares which he
retained to qjoklify him a« a director in the bank}
and that it gire to appellant and his wife notes
dated back to January $ # 1928, bearing interest at
8 per esait*, representing the par value of isejjr
aa4 S8 shares respe^tirely, making up the total
dt 184t shares whioh stood In the name 0f the Lauren*
Company• the January dividends already $*£& were
credited on these aetes* Ho other corporate action
was ever taken by the Laurens Coa^a^y, its stock holders, or its officers. It Issued no stook certificates, kept no books, had ne seal* the oaly
saoney It ever possessed was the |20 paid by appellant
for organisation expenses. It olaJtiaed no as sets,
except the stock in Its namej it had no creditj the
laoaey with which the stoek was purohased was aoquired entirely upon the oredlt of appellant. Ho
record exoept the credit on the baek of the notes
was ever made of the receipt by It of dividends* It
was organised for the sole purpose of owning the bank

Corker T»

stook# pursuant to the i&#* of exponent that i t s
orga&itfttien suae the ple*iȣ of the stook i s i t s
name would prevent his being liable for et&ek
w

there i s no evidemoe ia the reeord of amy
activity of Lauren* Investment Coi^any exeopt ftm
aame* §vo?y traataotloa had by or with reforonoe to
i t mm saaaag^d, controlled, amd directed by appellast,
and i t funetloned entiroly «« am agomoy or instrumentality of hi«* * o • •
101)
were elle^atiozui in the bill that the stoek wa«
the n«^« of L»yr«»« Izrreet»uit Company fraa^uiently for the
of avsldisg liability at it tins i«hem the bank wms inaolreBt ©r
in danger of b##osdag «# em& this would aeea to 'km %ho true ground
for holding the baak preeid^nt li*bl#»

U&fevt«uitelyt howe^««*f thfc»e

allegations were abandoned at the trial ami the Court m s foreet t©
fiad t#me @^#r *^i#orj mfOB wMeh 'to ba«e liability*

It did s© by

the following r*tth#r peculiar line of




troubles do not *ris© from the
fast that the oorporat* ©atity of th© Laaress
p«my haa b©«® dier»sar4e4« fhe ju^meat of the
eourt below fully r«oognise4 «a4 gar© effeot to that
#nti%» It found that, thou-gh i t i i t in fact eadtt,
for the fttrf@*o of holding* not really, hvtt
for Rppellaat, the »took whioh he o«u*ed to
put in i t s name, that appellant at oil i£»«s rethe real *wn«r of the aharea, as4 that the
law will look through the aubterfugo of
©wnorahlp to faoton liability upoa the
to whamf in f aot, tho shares belong*

Corker v. Sapor • -

8

"The view which the court belemr took* and
i»hioh we take, does not require, in fact, i t prevents,
the oonoltt«iou that the corporation la this case was A
fi«tlon» having so corporate existence* la this view*
the judgment, thoroughly ooaeiatent with i t s e l f ,
stand* upoa the sound foundation on which alone *
just disposition of this case laay rest* It correctly
Sires effect to the general latent of appellant to create
a corporation for the purpose of placing la i t t name his
and his l i f e ' s stock in the bank, because what was done
made that intent effectual. It with equal correctness
denies effect to the particular intent uhloh induced
him to act as he did, to avoid l i a b i l i t y on the etock,
beoause the things dome by mppellaot were not la aeeord, but wholly ineoaslst«&t9 nith that latent* For K^iile
the things done did plae© the oertlfioate* &f stook in
the name of the Learo&e Cowpany, they did aot direst
appellant of his beneficial ownership of them, out left
him the real owner, aad therefore liable to assessment»n
(Page itS)
In other words, althcu^i the Oourt recognised the separate
corporate entity of the holding eciapany,it held that 1B fact the hold*
oo»fany KM sot a rml

stockholder of the bank, but was the mere

or lastrumentallty of th« bejak president*

This i s gwite differ-

ent from holding that a shareholder la a boua fide holding company i s
a shareholder in a bank whose stock i s owned by such holding company•
Moreover, th© case i s easily distinguishable from that of
the Eeoles Investiaent Coinpaay, which Is a bona fide corporation or*
ganisod over twenty years ago,and vhleh awns a large variety of la*
•O8t»entt4 including real estate, bonds, notes, and rtooks of corporations engaged in widely diversified types of