First Wisconsin Trust Co. v. Johnson

| Wis. | Mar 8, 1921

Esciiweiler, J.

It is conceded that the statutory requirements were properly carried out and the plaintiff became a lawfully organized trust company bank.

The defendant contends that the language of sub. (1), sec. 2024 — 77rr, Stats., supra, providing that such consolidated corporation “shall be a continuation of the entity of each and all of the corporations so consolidated for all purposes whatsoever,” so fixes and preserves the former corporate entities of the two trust company banks, that the respective deposits by such former corporations of $100,000 worth of securities with the state treasurer must continue to be held for such corporate entities to the same effect and purpose as before such consolidation.

It is argued that if by the provision quoted above there be now and hei'eafter sufficient warrant and authority for the corporation which has resulted from the consolidation to step into and fill any trust positions to which either of said prior corporations had been theretofore or shall thereafter be appointed or designated as completed as might have such respective prior corporations, it must then necessarily follow that by preserving such a right a corresponding obligation must continue to keep and preserve, for such prior corporate entities, the securities theretofore required of and deposited by them. Defendant also lays stress upon there being substantial distinction recognized by the several statutes providing for the consolidation of such trust company banks under sec. 2024 — 77rr, Stats., and for the consolidation of banks under sec. 2024 — 28n, viz. that as to the trust company banks there is express provision for a continuation of the entity of each of the corporations so consolidated and none as to such banks. He also argues that, there being no express authority for the withdrawal of such deposited securities by either of the old corporate entities upon such consolidation or by the new corporation thereafter, there is thereby indicated a legislative intent requiring the continued holding of such respective deposits for such prior and thereafter continued corporate entities. And from either or all of these suggestions, therefore, that the defendant is in duty bound, under the provisions of the statute (sec. 2024 — 77j, supra) providing for such deposit of securities, to continue to hold the same until, as therein provided, he is otherwise ordered by a court of competent jurisdiction.

The situation presented is a peculiar one and we have no help in its solution from any decisions of this or other jurisdictions. Such authorities as Central R. & B. Co. v. Georgia, 2 Otto (92 U. S.) 665, and Bergdorf's Will, 206 N. Y. 309, 99 N. E. 714, as to the effect of consolidation or merger of corporations, are under statutes different from those before us and are therefore not persuasive either way in the present problem.

We think the trial court was right in the determination at which he arrived and for the following reasons: The amount of such securities required from any trust company bank is fixed ratably as to the capital stock up to the maximum of $100,000. Such securities are not pledged for any particular trust or trusts but for the general performance of its trust obligations, so that no particular cestui que trust has at any time a fixed or particular interest therein. While no provision is made for the withdrawal of the former deposits, upon such cdnsolidalion, neither is there any provision that such consolidated trust compan}'- bank shall make a new deposit of securities. To require these two separate deposits to be so continued, as contended for by the defendant, and to prevent the present new trust company bank from having any recognized ownership therein, would of necessity and logically require it, in order to lawfully do. business under sec. 2024 — 77j, Stats., to make, a new and separate .deposit of $100,000 in securities. Evidently it must either be in a position to assert title to the securities which belonged to the prior corporate entities or else now deposit new and additional securities. To so require plaintiff as such new trust company bank to make such new and separate deposit as a condition precedent to its lawfully commencing business under the said statute does not seem a justifiable construction.

The evident primar)'- purpose of sec. 2024 — 77rr is to authorize one company, after such consolidation, to exist'for all the practical purposes of such an organization where two or more existed before. It is to lessen the number rather than continue the same, otherwise the consolidation is quite an idle formality.

It is also quite apparent that the purpose of sec. 2024 — 77j, supra, is to provide that such an organization shall give substantial assurance to its present and prospective patrons that it will faithfully perform the trusts it undertakes and that such assurances shall be held and safeguarded by an official of the state.

We think the substantial benefits and purposes of both the statutory provisions here in question can be best preserved, in spite of the seeming conflict arising from the broad terms used in the later of the two statutes, sec. 2024 — 77rr, by holding, as we now do, that the new corporate entity, the plaintiff in this case, succeeding as it does to the assets and assuming the liabilities of both the old entities, also succeeds to the ownership of the securities in the hands of the defendant state treasurer and is. entitled to also claim the benefit of the limitation fixed by the statute as to the maximum amount of such securities so required.

It follows therefrom that the judgment of the court below must be affirmed.

By the Court. — Judgment affirmed.