102 Minn. 199 | Minn. | 1907
This is an appeal from an order denying a motion, upon petition of a creditor, that the court require the defendant, receiver of an insolvent bank, the Savings Bank of St. Paul, to sell the bank charter. All the trustees of the bank, with one exception, had resigned in favor
The opinion of the trial court appears to us to have been proper, and the reasons upon which it is based to have been sound. The charter of the bank in question is governed by chapter 23, p. 33, Laws 1867, and subsequent legislation extending the privileges of corporations organized under that law. “When there is a general law providing for the organizing of corporations with certain specified rights, privileges, and franchises, by any person adopting and signing preliminary articles of association, a compliance with the law in this respect would be deemed an acceptance of the proposed grant and the conditions of it, and would constitute a contract to the same extent as though the corporation was created by special legislation.” This corporation accordingly was not affected by later laws, which were substituted for and which superseded the law of its incorporation. See opinion of C. M. Start, Attorney General, in 1880, published in “Opinions of the Attorney Generals of Minnesota, 1858-1884,” p. 414. The bank, under this legislation, enjoyed a special privilege not possessed in common by savings banks organized in accordance with later legislation. Section 3, c. 117, p. 308, Sp. Laws 1873, provides: “The balance of net profits, after providing for the payment of interest to depositors, according to law and the rules of said association, shall be divided equally according to shares of stock to the holders thereof.” The policy of the subsequent legislation is to be found in the present expression on this subject. Section 3016, R. L. 1905, provides that no trustee shall have, directly or indirectly, any interest in the profits ; section 3025, that the depositors shall receive all the net profits after paying interest to the depositors, paying necessary expenses, setting
It is elementary that “the most important modern private corporations receive their franchises in consideration of the performance of some public duty. In such cases the state is supposed to impose a certain degree of confidence in the grantee, and hence insists that the duties shall be performed by the particular grantee. * * * But the rule is settled that the corporation can sell neither the primary nor secondary franchises, which are necessary to the due and proper performance of the public duties imposed upon it by its charter.” Elliott, Priv. Corp. § 126. It would naturally follow that the trial court should not have directed the sale of the charter in this cáse in violation of the plain dictates of public policy. There was an especial propriety in its refusal so to do because of the essentially eleemosynary character of the corporation in question and of the direct and unresisted proceeding for its dissolution. See Minneapolis Baseball Co. v. City Bank, 74 Minn. 98, 103, 76 N. W. 1024. No good reason has beem assigned for a contrary opinion. It is, of course, desirable that the receiver should realize as much as possible from available assets. It is true that the sale of this charter would produce at least $5,000 for the creditors. This did not, however, justify the court in directing a sale, not of assets, but of special corporate privileges, against public policy. It is immaterial whether the history and statistics of banks show that, so far as public welfare is concerned, banks organized under the Laws of 1867 are better than those organized under the Laws of 1879. The argument that no matter whát possible objection there might be to a going concern can have no pertinence to the dormant ownership of the bank, and that the sale of the charter would not perpetuate anything, is ingenious, but not sound. The learned trial judge properly refused to lend judicial sanction to the enrichment of the trust by the
Order affirmed.