225 N.W. 657 | S.D. | 1929
As security for a loan, Dakota Trust & Savings Bank took 63 shares of'the capital stock of Ruthton State Bank, of Ruthton, Minn., and, default being made in payment of the loan, the security was foreclosed on or about April 22, 1922, and the bank became the owner of the stock, which was bid in in the name
The Dakota Trust & -Savings Bank closed its doors on May 12, 19-24, and was taken over by the superintendent of banks, who gave the statutory notice to creditors to present claims, and the time within which claims could be presented- pursuant to such notice expired on October 9, 1924.
On April 16, 1923, Ruthton State’Bank closed its doors and was taken over by the commissioner of banks of the state of Minnesota. On his application showing that the assets of -that bank were insufficient by more than $100,000 to pay its liabilities, the district court of Pipestone county7, Minn., on September 25, 1925, ordered an assessment of 100 per cent upon all the stock of the bank, and directed the- commissioner of banks to collect this amount from the several stockholders. Thereafter plaintiff, as commissioner of banks for the state of Minnesota, presented to defendant Smith, as superintendent of banks of South Dakota, his claim for $7,700, 'being the amount of the xoo per cent assessment or super-added liability on 77 shares of stock held by Dakota Trust & Savings Bank in the Ruthton State Bank. Smith refused to accept or file this claim, and, on application of plaintiff, on July 30, 1925, an order was made 'by7 the circuit court of Minnehaha county, directing Smith to file the claim with the same force and effect as if it
Appellant says the appeal involves but three propositions: First, was respondent’s claim barred because not presented within the time for filing claims? Second, is Dakota Trust & Savings Bank subject to stockholders’ liability on stock taken on foreclosure of its lien on such stock held as collateral on a debt previously contracted in good faith, the stock being carried in the name of its officers on the books of the Ruthton bank, and more than six months having elapsed from the time it acquired the stock until it became insolvent? Third, is Dakota Trust & Savings Bank liable on the 14 shares of stock which it purchased for the purpose of controlling the Ruthton bank and thus preventing its consolidation with another 'bank ?
While a stockholder’s double or superadded liability arises at once upon his becoming- a stockholder, it does not, under the statutes of Minnesota and the decisions of the courts of that state, exist as a claim that can be asserted by any one so long as the bank remains solvent and is a 'going concern. Hunt v. Roosen, 87 Minn. 68, 91 N. W. 259; Northwestern Trust Co. v. Bradbury, 117 Minn. 83, 134 N. W. 513, Ann. Cas. 1913D, 69. The Ruthton bank continued to be a going concern and presumably solvent until long after the time to present claims against the Dakota Trust & Savings Bank had expired, and there was therefore within the time when claims might be presented no claim that any one could assert in fa,vor of the Ruthton bank. Its stockholders could not be resorted to upon the double liability until it had- become insolvent and an order had' been made by the district court of the county in which it was located, determining the amount of the lia'dilityr to be collected from each stockholder and directing the commissioner of banks to collect, and, if necessary, sue for, such amount. We think, therefore, the claim did not come within the contemplation of sec
The contention that the 63 shares of stock taken by the bank on foreclosure o-f the collateral having been carried on the books of the bank in the name of the -cashier of the Dakota Trust & -Savings Bank, and the certificates having been issued in his name, the bank cannot be liable, and that oral evidence is not admissible to show that the bank was., in fact, the real owner, cannot be sustained. Oral evidence is admissible to show that the real owner of stock in a corporation is some one other than the party in whose name it stands upon the books of the corporation. Houghton v. Hubbell, 91 F. 453, 33 C. C. A. 574; Byington v. Simpson, 134 Mass. 169, 43 Am. Rep. 314.
Appellant directs our attention to the clause in Code, section 8961, which provides that every bank shall keep a stock book which shall show a full and correct list of the names and addresses of all stockholders, and that “in all actions, suits and proceedings, such book shall be conclusive evidence of the facts therein stated,” and contends that under this statutory provision oral evidence cannot be received to show that another than the party listed in the stock book is the owner of the stock so- listed.But section 8779, relating to corporations generally, provides that the term “stockholder” as used therein, shall apply, not only to such persons as appear upon the books of the corporation to be such, but also to every equitable owner of stock, although the same appear on the books in the name of another. This necessarily implies that oral evidence may be given to show that one may be a stockholder, although the same appears upon the books in the
Section 8983, R. C., prohibits a bank from investing any' of its funds in the stock of another bank or from becoming a purchaser or holder of shares in any other bank unless it shall be necessary to prevent a loss upon a debt previously contracted in good faith, and provides that stock so acquired shall within six months be disjiosed of at public or private sale, and after the expiration of six months any such stock shall not be considered part of the assets of the bank. But while a bank is prohibited from investing any of its funds in the stock of any other bank or corporation, it may' lawfully acquire such stock by the necessary foreclosure of a lien thereon for a debt previously contracted in g"ood faith, and', where it becomes the owner of stock in this manner, it is liable like any' other stockholder for the statutory' obligations of a stockholder. Germania Nat. Bank v. Case, 99 U. S. 628, 25 L. Ed. 448. The requirement that stock lawfully acquired must be disposed of within six months, and shall not thereafter be considered assets of the bank, does not of itself deprive the bank of the stock or make it no longer a stockholder. This provision doubtless gives the superintendent of banks authority to require the bank" or its stockholders to substitute cash in place of this stock, but it does not -deprive- the bank of its ownership in the stock, and, so long as it remains owner of the stock, it is subject, like any other stockholder, to the superadded liability. We therefore conclude that Dakota Trust & Savings Bank is liable for the superadded
On May 8, 1922, Dakota Trust & Savings Bank had paid an assessment of 50 per cent on the 63, shares it had but recentl}acquired by foreclosure. On September 25, 1923,' when the purchase of the additional 14 shares was añade, the officers making the purchase knew that an additional 60 per cent assessment was being called for, and they purchased the 14 shares at 25 cents on the dollar in order, as they say, to get control of the bank and prevent a consolidation with another bank in the same town. The fact that shares could be bought at 25 cents on the dollar would ordinarily be considered a sign that the bank was unsafe and that the statutory liability was not unlikely to be called for at no remote date. We do not think that a South Dakota bank has authority to use the funds of its depositors in any such hazardous speculation. We agree with what is said in the case of First National Bank v. Con
The judgment of the trial court is modified by substituting $'1,300 in place of $7,700, and, as so modified', is affirmed. No costs will be taxed in this court.