Opinion
No. 34719.
November 10, 1941.
1. BANKS AND BANKING.
The Wisconsin Banking Commission's complaint in action to enforce assessment against bank stockholder was not demurrable for failure to allege that there were any unpaid debts or creditors of bank when action was instituted, since under Wisconsin law stockholder's liability accrued and payment thereof became due and enforceable when commission took possession of delinquent bank, and if payments by stockholders exceeded amount necessary to pay expenses and claims of creditors, stockholders would be reimbursed in amount of excess.
2. BANKS AND BANKING.
The determination by the banking authorities in charge of the affairs of an insolvent bank concerning the necessity and amount of an assessment against stockholders is conclusive on a stockholder in an action to enforce the assessment.
3. BANKS AND BANKING.
A bank stockholder against whom an assessment is made must pay the assessment, and if the call has been unnecessary or has been excessive, stockholder's complaint must be preferred before the banking authorities or the tribunal which has charge of the liquidation and directs the application and distribution of the delinquent bank's assets.
4. BANKS AND BANKING.
Whether depositors and creditors of a delinquent Wisconsin bank were entitled to interest was a question to be decided in Wisconsin, and it would not be decided in Wisconsin Banking Commission's action against Mississippi stockholder to recover balance allegedly due on assessment made against stockholders.
APPEAL from the circuit court of Warren county, HON. R.B. ANDERSON, Judge.
Dabney Dabney, of Vicksburg, for appellant.
The contention of appellant is that the action is one at law, and that it is not incumbent upon the Wisconsin State Banking Commission prior to instituting suit to first ascertain the pro-rata liability of each stockholder.
Wisconsin case of Schwenker v. Bekkedal, 204 Wis. 546, 236 N.W. 581. See, also, Pate v. Bank of Newton, 116 Miss. 660, 666, 77 So. 601.
The sole question presented by the plea in bar or motion to dismiss filed by appellee is whether or not the creditors or depositors in the delinquent bank in question are entitled to 6% interest in addition to the payment of the principal amount.
The appellant contends that the depositors and creditors of the delinquent bank are entitled, in addition to the 100% liability, to collect interest, if assets are sufficient to pay claims in full. It is admitted by both sides that all principal amounts and claims, exclusive of interest and unfiled claims, have been paid. The appellee contends that the stockholders are not liable for interest payments.
In support of appellant's contention that the stockholders are liable for interest from June 1, 1933, to date, we cite the following controlling cases: People v. Merchants Trust Co., 187 N.Y. 293, 79 N.E. 1004; Richmond v. Irons, 121 U.S. 27, 30 L.Ed. 864; Ohio Savings Bank v. Willys Corp. (N.Y.), 8 F.2d 463; American Iron Steel Mfg. Co. v. Seaboard Air Line R. Co., 233 U.S. 261, 34 S.Ct. 502; Ex parte Stockman, 70 S.C. 31, 48 S.E. 736.
And appellant denies the charge set forth in said plea-motion that because the stockholders and depositors have been paid the principal amounts, appellee (a stockholder) is relieved of any further liability or responsibility herein, and that the issue in this suit thereby becomes moot and settled and determined, but appellant shows to this Honorable Court that the interest charge is as much a liability and obligation of said appellee (stockholder) as was the superadded liability of 100%; and, further, appellant shows that the appellee has not contributed by $550 (plus interest) the amount due by her on her 100% assessment by the Banking Commission of Wisconsin.
Wm. I McKay and Leonard E. Nelson, both of Vicksburg, for appellee.
The declaration fails to allege that there were or are any unpaid debts or creditors of said bank for whose payment or benefit this action could have been lawfully brought and maintained. The omission of this basic, essential allegation is fundamentally fatal to the declaration. The Wisconsin statute itself, section 220.08 (3), the sole and very basis, the sine qua non, of any action against a stockholder of a bank, among other matters, expressly and specifically provides that the Commissioner "may, if necessary to pay the debts of such corporation, enforce the individual liability of the stockholders." The declaration is utterly silent as to the existence of such indispensable condition precedent. More essentially and conclusively still, the double or superadded liability of the stockholder is of course absolutely dependent upon the existence of unpaid creditors, whom the assets of the bank are insufficient to pay in full. This is evident, axiomatic, necessarily true. Therefore, the demurrer to the declaration was most properly sustained.
Briefly stated and admitted, the fact is that, after the judgment appealed from was rendered on January 28, 1941, all of the depositors and other creditors of said bank collected the principal sums of their claims against said bank, so that the only purpose of this appeal or action is to try to recover damages, if any, in addition to such paid and received principal sums. This fact is stated and admitted by the appellant. Under date of April 8, 1941, the appellant wrote a letter to one of appellee's attorneys, in part saying, "The depositors and other creditors have received 100% of the principal but so far have received no interest . . ." And in appellant's answer to appellee's said plea in bar herein the appellant makes the following specific, conclusive admission, to-wit: "Appellant shows that while it is true, as alleged in said plea-motion, that the depositors and creditors have been paid the principal amount of their claims, no provisions have yet been made to take care of the interest . . ." Moreover, the appellant has now pending in and undetermined by the Circuit Court of Milwaukee County, Wisconsin, the court of its appointment, its petition that such "court determine, (1) the amount of the interest, if any, which the depositors and creditors of said bank are entitled to upon their respective claims, and to provide for the payment thereof, . . ." Therefore, it is conclusively true that all of the depositors and other creditors of said bank have been paid and received all the principal sums of their claims against said bank.
It appears that our plea is the proper and only way to raise and present the question of the legal effect of the payment and receipt of the principal sums on the right further to maintain this appeal or action for the damages only. In the case of Adams v. Carter, 92 Miss. 578, 46 So. 59, and 92 Miss. 579, 47 So. 409, this court specifically held that the only way the question can be raised is by a plea in bar. We would discuss and quote from such a perfectly applicable and controlling decision, but we are persuaded that the court will prefer to review the actual case and decision.
We are fortunate in having one of our own cases perfectly in point and controlling in the case at bar. See Y. M.V.R. Co. v. Craig, 111 Miss. 297, 71 So. 561. See, also, 17 C.J. 813-815.
In view of the appellant's admission in his answer to this plea and brief in support thereof, there is presented to this court for decision only a question of law, the facts being admitted that all principal amounts and claims owing to depositors and creditors have been paid, exclusive of interest. If there are any unfiled claims against the appellant as liquidator of said bank, they have long been barred by the law of Wisconsin and Mississippi, on or before May 25, 1939, six years after appellant took charge of said bank. Therefore, the only question here presented is whether the claimants or creditors of said Bank are entitled to any damages (incorrectly called interest) on the paid and received principal of their claims.
We respectfully submit that it is conclusive, from the admitted facts and settled law, that the plea in bar of the appeal must be sustained and the appeal dismissed.
The Milwaukee Commercial Bank was a state bank doing a general banking business in the City of Milwaukee, in the State of Wisconsin, under the laws of that state. The bank became what is termed a delinquent bank in Wisconsin law, and under that law possession was taken of it by the state banking authorities on May 25, 1933. Upon the delinquency of the bank each stockholder therein became liable to an assessment in an amount equal to the face value of his stock. On May 31, 1933, the Commissioner of Banking for the State of Wisconsin made an assessment against each stockholder of 100% of the amount of his stock and notified the stockholders, including appellee who then held stock in said bank in the face value of $1,100. Appellee paid $550 on the assessment, but has failed to pay the balance. For this balance an action was instituted by the Wisconsin Banking Commission in the county court of Warren County in this State, the county of the residence of appellee.
A demurrer was interposed by appellee and was sustained, and the action was dismissed. The ground upon which the demurrer was sustained, as we gather from appellee's brief, was that there is no allegation in the declaration that there were any unpaid debts or creditors of the bank at the time the action was instituted, no showing of any necessity for the collection now sought to be enforced. The ground and contention is not well founded, and the demurrer should have been overruled.
In Schwenker v. Bekkedal, 204 Wis. 546, 236 N.W. 581, it was held that the stockholder's liability in an amount equal to the face value of his stock accrues and the payment thereof becomes due forthwith upon the taking of possession of the delinquent bank by the banking commission, and that the liability may be at once enforced by suit. And in the event the payments by stockholders shall exceed the amount necessary, after payment of expenses and the claims of creditors, the stockholders will be reimbursed in the amount of the excess. Thus it is to be seen that the question which appellee has sought to raise is one with which the courts in this State have nothing to do.
The rule in respect to double liability statutes framed along the lines of the National Bank Act, as are the Wisconsin statutes, is that the determination by the banking authorities in charge of the affairs of an insolvent bank as to the propriety and necessity and amount of an assessment against the stockholders is conclusive on the stockholder in an action to enforce the assessment. It is his duty to pay the assessment, and if the call has been unnecessary or has been excessive his complaint about this or in regard to any other complaint which he deems himself entitled to make must be preferred before the banking authorities or the tribunal which has charge of the liquidation and which controls and directs the application and distribution of the assets of the delinquent institution. Numerous of the authorities to the above effect are collected in the footnotes in 9 C.J.S., Banks and Banking, sec. 96, pp. 190, 191.
And the reason for the rule as stated is all that is necessary to sustain it. Stockholders often live in several states or in several different parts of the same state. If questions such as appellee has sought to raise here should be entertained by the various courts in various states or in the several sections of the same state, the result would be to scatter the interests of the liquidation, destroy its unity, load it with excessive expenses of outside litigation and delay its final termination.
Appellee has further pressed the point by filing in this court a plea in abatement of the appeal in which it is alleged that all depositors and other creditors of the delinquent bank have been fully paid, save that they have received no interest on the amount of their claims, and appellee says that they are not entitled to interest. If we were authorized to decide the question of interest, we might refer to two of the later decisions which we have happened to notice, Hackney v. Hood, 203 N.C. 486, 166 S.E. 323, and State ex rel. v. Park Bank Trust Co., 151 Tenn. 195, 268 S.W. 638, 39 A.L.R. 449, wherein it is held that depositors and creditors of an insolvent bank are entitled on liquidation to interest; but for the reason already stated, this is a question to be decided in Wisconsin. What we are to do here is to give judgment on the assessment with interest from the date thereof, if appellee was a stockholder when the bank was taken over, and remit all other questions to the jurisdiction where the liquidation is being handled.
Reversed and remanded.