IN RE INVOLUNTARY DISSOLUTION OF BATTLE CREEK STATE BANK, A NEBRASKA BANKING CORPORATION. WILLIAM B. HENGSTLER, COTRUSTEE OF THE A.W. HENGSTLER TESTAMENTARY TRUST, APPELLANT, V. BATTLE CREEK STATE BANK ET AL., APPELLEES.
No. S-96-062
Supreme Court of Nebraska
March 6, 1998
575 N.W.2d 356
ral presumption of honesty and correct motivation and cannot be based on guess or conjecture. Moreover, it is the burden of the party claiming the benefit of the relationship to establish its fiduciary or confidential nature or any unequal footing. See, also, Evans v. Engelhardt, 246 Neb. 323, 518 N.W.2d 648 (1994).
Finding merit in the assertion that we recited an incorrect standard of proof, and that assertion only, we overrule the motion for rehearing but substitute for the present first two sentences, the second of which consists of citations, under the heading “EQUITABLE RESCISSION” found at 253 Neb. at 566, 571 N.W.2d at 88, the following:
In an equitable rescission action brought by a client against an attorney representing him or her in the transaction giving rise thereto, the burden is upon the attorney to show by clear and convincing evidence that no advantage was taken of the client and that the transaction was fair and reasonable. Hamilton v. Allen, 86 Neb. 401, 125 N.W. 610 (1910). See, also, Evans v. Engelhardt, 246 Neb. 323, 518 N.W.2d 648 (1994); Rettinger v. Pierpont, 145 Neb. 161, 15 N.W.2d 393 (1944).
The remainder of the paragraph shall continue beginning with “In its order” and ending with “(1996).”
FORMER OPINION MODIFIED.
MOTION FOR REHEARING OVERRULED.
WHITE, C.J., and WRIGHT, J., not participating.
Robert S. Lannin, of Croker, Huck, Kasher, DeWitt, Anderson & Gonderinger, P.C., for appellees Robert Doering and Karen Hale.
Rodney W. Smith, of Smith & Doerr, P.C., for appellee Jean Brestel.
Don Stenberg, Attorney General, and Fredrick F. Neid for amicus curiae Department of Banking and Finance, State of Nebraska.
WHITE, C.J., CAPORALE, WRIGHT, CONNOLLY, GERRARD, and STEPHAN, JJ.
PER CURIAM.
STATEMENT OF CASE
This appeal presents the question of whether an allegedly oppressed minority shareholder may invoke involuntary dissolution proceedings pursuant to
The plaintiff-appellant, William B. Hengstler, as cotrustee of the A.W. Hengstler testamentary trust, a shareholder of the defendant-appellee Battle Creek State Bank, seeks the involuntary dissolution of the bank under the provisions of the Nebraska Business Corporation Act (Act),
PROCEDURAL POSTURE
Although the district court sustained the demurrers of the defendant shareholders, it did not dismiss the suit as to them. As the sustaining of a demurrer not followed by a judgment of dismissal terminating the litigation does not constitute a reviewable final order, we have acquired no jurisdiction over that aspect of the appeal. See Barks v. Cosgriff Co., 247 Neb. 660, 529 N.W.2d 749 (1995). We therefore concern ourselves only with the matter of the summary judgment in favor of the bank.
We also observe that notwithstanding that the appellant is designated as “cotrustee,” the assignments of error raise no issue as to his capacity to bring this action without the participation of any other trustee. As a consequence, we do not concern ourselves with the matter of the appellant‘s capacity to maintain this action.
SCOPE OF REVIEW
The dispositive question, whether the Act permits a shareholder to bring an action to involuntarily dissolve a corporation chartered as a commercial bank under the state‘s banking statutes,
ALLEGATIONS ON RECORD
The appellant has alleged that the directors and officers of the bank, which is insured by the FDIC and is a member of the Federal Reserve System, engaged in “improper, oppressive or fraudulent acts, all contrary to the best interests of the Bank” in that they paid excessive amounts of compensation to certain shareholders, directors, and officers; used bonuses as a subterfuge to avoid the payment of dividends otherwise reasonably due to shareholders; and engaged in insider purchases and sales of loans to and from the bank.
ANALYSIS
The appellant argues, inter alia, that because banking corporations are generally subject to the Act, which does not specifically exclude banks from its involuntary dissolution procedures, involuntary dissolution of a bank is proper pursuant to
We begin our analysis by noting that the Act does not prohibit the involuntary dissolution of a corporation. However, a banking corporation is unlike a purely private corporation in that a banking corporation is a quasi-public institution subject to the special banking rules and regulations of the State of Nebraska.
“[b]anks are indispensable agencies through which the industry, trade, and commerce of all civilized countries and communities are carried on; the business which they transact, though for private profit, is of a pre-eminently public nature, and is therefore universally recognized as a proper subject of legislative regulation under the police power of the state. . . .”
Placek v. Edstrom, 148 Neb. 79, 92, 26 N.W.2d 489, 497 (1947). Thus, due to the stark contrast in nature between banking corporations and strictly private corporations, public policy dictates that banking corporations should be afforded different treatment with respect to the manner in which they may be involuntarily dissolved. However, even though there are sound public policy arguments for not treating banks the same way as other business corporations, our analysis of the banking statutes and the Act is necessary to the resolution of the instant case.
The Act empowers the district courts to dissolve a corporation in a proceeding by a shareholder when the directors or those in control of the corporation have acted, are acting, or will act in a manner that is illegal, oppressive, or fraudulent.
When a corporation is conducting business as a bank, however, that corporation falls within the purview of
The grounds for involuntary dissolution alleged by the shareholders in the instant case, “improper, oppressive or fraudulent acts, all contrary to the best interests of the Bank,” are encompassed within the broader language of
Likewise, even after a court has appointed a receiver to liquidate the corporation‘s assets and business,
It is true that a legislative act which is complete in itself and is repugnant to or in conflict with a prior law repeals the prior law by implication to the extent of the repugnancy or conflict. Mauler v. Pathfinder Irr. Dist., 244 Neb. 217, 505 N.W.2d 691 (1993). However, it is also true that in the absence of clear legislative intent, the construction of a statute will not be adopted which has the effect of nullifying or repealing another statute. State ex rel. City of Elkhorn v. Haney, 252 Neb. 788, 566 N.W.2d 771 (1997). Moreover, to the extent there is conflict between two statutes on the same subject, the specific statute controls over the general statute. SID No. 2 v. County of Stanton, 252 Neb. 731, 567 N.W.2d 115 (1997).
We have long held that in construing a statute, a court must look to the statute‘s purpose and give the statute a reasonable construction which best achieves that purpose, rather than a construction which would defeat it. Slagle v. J.P. Theisen & Sons, 251 Neb. 904, 560 N.W.2d 758 (1997). Furthermore, the components of a series or collection of statutes pertaining to a certain subject matter may be conjunctively considered and construed to determine the intent of the Legislature so that different provisions of the act are consistent, harmonious, and sensible. SID No. 2 v. County of Stanton, supra. In construing
It is the public nature of the banking industry that prompted this court‘s conclusion that the purpose of the banking statutes is to take the banking industry out of private hands and place it under state control, State, ex rel. Chamberlin, v. Morehead, 99 Neb. 146, 155 N.W. 879 (1915), which purpose would be defeated if a banking corporation‘s shareholders could bring a private action for involuntary dissolution.
Therefore, we conclude that the shareholders of a corporation conducting business as a bank may not institute involuntary dissolution proceedings in a district court.
CONCLUSION
We conclude, therefore, that the district court was correct in granting summary judgment in favor of the bank. The judgment of the district court as regards the bank‘s motion for summary judgment is, therefore, affirmed.
AFFIRMED.
MCCORMACK, J., participating on briefs.
CAPORALE, J., dissenting.
I respectfully dissent. It should be noted at the outset that the majority assumes a jurisdictional conflict which is not present. It may well be that had the Department of Banking and Finance taken possession of Battle Creek State Bank under
Our banking statutes provide that the business of banking may be conducted only by “means of a corporation duly organized for such purpose under the law of this state,”
The corporation act empowers district courts to liquidate a corporation in an action by a shareholder when the acts of the directors or those in control of the corporation are illegal, oppressive, or fraudulent.
Had the Legislature intended to exempt banking corporations from the purview of the corporation act in this regard, it could have so provided. It is a general principle of interpretation that the mention of one thing implies the exclusion of another: Expressio unius est exclusio alterius. Under this principle, it has been held that the enumeration of certain powers implies the exclusion of all others not fairly incidental to those enumerated and that an affirmative description of cases in which certain powers may be exercised implies a negative on the exercise of such powers in other cases. Harrington v. Grieser, 154 Neb. 685, 48 N.W.2d 753 (1951). Indeed, the Legislature has found occasion to specifically exclude banking corporations from the operation of certain provisions of the corporation act. For example, the Legislature specifically exempted shareholders of banks from the right to dissent and obtain payment for the fair value of their shares in the event of certain corporate actions.
We have applied general corporate law to banking corporations in several cases. Schmid v. Clarke, Inc., 245 Neb. 856, 515 N.W.2d 665 (1994), arose from the merger of two bank holding companies. The merger agreement provided for the payment of a premium to shareholders who signed a covenant not to compete. One of the minority shareholder plaintiffs claimed he was unfairly treated because he was not in the position to sign such a covenant, inasmuch as he served as president of a competing bank. Noting that he and his shareholder plaintiff wife neither attended the meeting called to vote on the merger nor voted against it, electing instead to surrender their stock and receive payment for it, we held that they were estopped from seeking redress for mistreatment.
There are other instances in which the banking statutes being silent, we have applied the general law. Lauritzen v. Davis, 214 Neb. 547, 335 N.W.2d 520 (1983) (applying principles of contract and trust law in action by minority shareholder to determine which shareholders had contractual rights to buy certain bank stock); Farmers State Bank v. Petersburg State Bank, 108 Neb. 54, 187 N.W. 117 (1922) (applying contract law in enforcing covenant not to compete signed by bank stockholders and officers).
Of particular significance in illustrating that banking corporations are not governed solely by the banking statutes is our decision in McMillan v. Chadron State Bank, 115 Neb. 767, 214 N.W. 931 (1927), wherein we held that as the then Department of Banking had not taken possession of the bank, the bank did not have the authority to order a capital assessment against stockholders. Thus, McMillan establishes that the present Department of Banking and Finance can exercise only powers which have been statutorily granted to it. While our banking statutes require the consent of the department in the voluntary dissolution of a bank,
Michie‘s treatise on banks and banking notes that “[p]roceedings to dissolve banking corporations are usually regulated by statute in the various jurisdictions, and they can only be dissolved in the prescribed manner. But if the statute provides no method of procedure, that specified for ordinary actions should be followed.” (Emphasis in original.) 3 Michie on Banks and Banking § 46 at 191-92 (1996). Stated another way, it is not the province of a court to read into a statute something omitted by the Legislature, see Ledwith v. Bankers Life Ins. Co., 156 Neb. 107, 54 N.W.2d 409 (1952), and a court may not read an exception into a statute which the Legislature did not make, Siren v. State, 78 Neb. 778, 111 N.W. 798 (1907). Thus, if a state has not passed a statute providing a special procedure, then a court must apply the general statutes, in this instance the corporation act.
The Legislature‘s requirement that banking organizations incorporate under state law, its willingness to specifically enumerate the exclusion of a shareholder‘s right to dissent and obtain payment in the event of certain corporate actions, and its failure to exclude bank shareholders from the right to bring an action for involuntary, or judicial, dissolution clearly establish, under our rules of construction, that it intended bank shareholders to have such a right.
I recognize, as suggested by the bank and the Department of Banking and Finance as amicus curiae, that there are important policy considerations weighing against allowing minority shareholders in banking corporations to bring an action seeking corporate dissolution. Banks and other banklike institutions are the centers of economic activity in communities. “The very nature of banking is a quasi public business. The whole stream of commerce, whether interstate or intrastate, largely depends upon this business.” United States v. Doherty, 18 F. Supp. 793, 794 (D. Neb. 1937). Concern over the stability and management of banks and, in particular, a desire to protect depositors have led both state and federal governments to establish special procedures for banks, including creating the Federal Deposit Insurance Corporation (FDIC) and giving the state banking department the authority to audit banks and require periodic reports. It may therefore be that, as suggested, denying minority bank shareholders the right to file an action
Having concluded that the corporation act permits a shareholder to bring an action to dissolve a corporation chartered as a commercial bank under our banking statutes, it seems to me I am obligated to consider the amicus’ claim that in any event, our law is preempted by federal law.
In that regard, I begin by noting that a state bank insured by the FDIC may voluntarily withdraw from membership in the Federal Reserve System by giving 6 months’ written notice to the system‘s board of governors and surrendering all of its capital stock in the Federal Reserve bank.
Termination of insured status is not a prerequisite to liquidating a bank. The grounds for FDIC consent in
voluntary termination of the banks [sic] insured status, however, would result in the automatic forfeiture of the charter of the bank, and the bank would be liquidated and dissolved either voluntarily by its board of directors under the supervision of the Department of Banking, or involuntarily by the Department “as in cases of insolvency”
(emphasis in original), brief for appellee bank at 18-19, is a misstatement of
Moreover, the argument that involuntary dissolution of the bank would change the control of the banking corporation and is thus prohibited without the prior consent of the FDIC constitutes a misreading of
Thus, Nebraska law is not preempted by federal law in the area of the involuntary dissolution of a banking corporation that is unrelated to insolvency.
As we all know, summary judgment is proper only when the pleadings, depositions, admissions, stipulations, and affidavits in the record disclose that there is no genuine issue as to any material fact or as to the ultimate inferences that may be drawn from those facts and the moving party is entitled to judgment as a matter of law. Chalupa v. Chalupa, ante p. 59, 574 N.W.2d 509 (1998); Bargmann v. Soll Oil Co., 253 Neb. 1018, 574 N.W.2d 478 (1998). Inasmuch as the shareholder dissolution provisions of the corporation act apply to banking corporations, the bank is not entitled to judgment as a matter of law.
Accordingly, I would reverse the judgment of the district court and remand the cause for further proceedings.
WHITE, C.J., joins in this dissent.
I agree with the dissent of Justice Caporale. I write separately to point out that a person who claims injury to his property by reason of the oppressive acts of others is denied relief in apparent violation of the Bill of Rights,