Continental Nat. Bank v. Holland Banking Co.
Decision Date | 05 September 1933 |
Docket Number | No. 9673.,9673. |
Citation | 66 F.2d 823 |
Parties | CONTINENTAL NAT. BANK OF JACKSON COUNTY, AT KANSAS CITY, MO., et al. v. HOLLAND BANKING CO. |
Court | U.S. Court of Appeals — Eighth Circuit |
George L. Edwards, of Kansas City, Mo. (Omar E. Robinson and Albert E. Stoll, both of Kansas City, Mo., on the brief), for appellants.
H. G. Leedy, of Kansas City, Mo., and Orin Patterson, of Springfield, Mo. (Roscoe C. Patterson, of Kansas City, Mo., and Farrington & Curtis, of Springfield, Mo., on the brief), for appellee.
Before GARDNER, SANBORN, and BOOTH, Circuit Judges.
This is a suit in equity brought in the federal court by the appellee asking the aid of the court in the collection of a judgment obtained in the state court against the appellant, Continental National Bank.
The salient allegations of fact set out in the bill of complaint are as follows: The defendant, the Continental National Bank of Jackson County, at Kansas City, Mo., hereafter called the Continental National Bank, is a corporation organized under the National Banking Act of the United States of America and located at Kansas City, in Jackson county, in the Western district of Missouri. On the 17th day of October, 1922, the Continental National Bank ceased the transaction of business as a national bank, and on said date it entered into a contract in writing with the Continental National Bank & Trust Company, of Kansas City, Mo., whereby, in consideration of the assumption by the Continental National Bank & Trust Company of certain liabilities of the Continental National Bank, the latter caused to be transferred and delivered to said Continental National Bank & Trust Company a large portion of its assets. Thereafter, to wit, on the 2d day of January, 1923, by a vote of two-thirds of its shareholders, said Continental National Bank went into voluntary liquidation, and at said time the defendants J. F. Meade, Russell Smith, B. Haywood Hagerman, John M. Cleary, and C. W. Sheldon were named as liquidating agents for said bank, and all the remaining assets belonging to said bank were on said date delivered into the possession of said liquidating committee, composed of the defendants last named, for the purpose of liquidation, pursuant to section 5220, U. S. Revised Statutes (12 US CA § 181). The capital stock of said bank, on the 2d day of January, 1923, was $1,000,000, divided into ten thousand shares of the par value of $100 each; and on said date, said bank, according to its books, had a surplus fund in excess of 20 per cent. of its said capital stock. (The names of numerous persons are given as being stockholders of the bank on January 2, 1923; and they and their executors, administrators, heirs, and legatees are still stockholders.)
Plaintiff brings this action on its own behalf and on behalf of all other creditors of said Continental National Bank for the purpose of winding up the affairs of said national bank and to establish the existence of a trust in the assets of said national bank for the use and benefit of this plaintiff and all other creditors of said national bank, and to enforce an equitable lien and claim against such assets; and to administer said trust; that the same is also to recover from the defendants who are shareholders of said bank, and from the administrators or executors and heirs and legatees of such of said shareholders who are deceased, the amount of the individual liability of said shareholders for the debts and engagements of said bank to the extent of the amount of the stock of such bank owned by such shareholders at the par value thereof, in addition to the amount invested in such stock by said shareholders.
Plaintiff, Holland Banking Company, is a corporation organized and existing under and by virtue of the laws of the state of Missouri with its place of business at Springfield, Greene county, Mo. S. L. Cantley is the duly appointed, qualified, and acting commissioner of finance of the state of Missouri. On the 15th day of January, 1924, plaintiff, Holland Banking Company, became insolvent, closed its doors, and placed all of its property and affairs in the possession of F. C. Millspaugh, who was then the duly qualified and acting commissioner of finance of the state of Missouri. S. L. Cantley now has charge thereof for the purpose of liquidation, under the laws of the state of Missouri relating to insolvent banks.
After the failure of plaintiff bank, as herein set forth, to wit, on the 19th day of August, 1926, an action was instituted by the Holland Banking Company by S. L. Cantley, finance commissioner aforesaid, in the circuit court of Greene county, Mo., against the defendant, Continental National Bank, and one Edd L. Sanford, seeking the recovery of $100,000 and interest, on account of a conversion on and prior to October 17, 1922, by said defendant bank of funds in said amount belonging to the Holland Banking Company. Thereafter, the venue of said cause was by agreement transferred to the circuit court of Pettis county in the state of Missouri, and the cause of action as to Edd L. Sanford, one of the defendants therein, was thereupon dismissed. Said cause was thereafter in said court duly tried, and on the 5th day of September, 1927, said court rendered judgment in favor of the plaintiff herein and against the defendant, Continental National Bank, in the sum of $97,274.85, with interest from said date at 6 per cent. per annum. The defendant banking association appealed from said judgment to the Supreme Court of the state of Missouri. Thereafter, to wit, on the 8th day of October, 1929, said Supreme Court of Missouri rendered a judgment affirming the judgment of the trial court aforesaid. 324 Mo. 1, 22 S.W.(2d) 821. Thereafter, to-wit, on the _____ day of January, 1930, said defendant banking association applied to the Supreme Court of the United States for a writ of certiorari to be directed to the Supreme Court of Missouri to send up the record in said cause for review of the judgment of that court. 281 U. S. 724, 50 S. Ct. 239, 74 L. Ed. 1142. On the 7th day of March, 1930, said Supreme Court of the United States denied said writ, and the judgment herein referred to has now become final and conclusive, and binding on said banking association and all of the defendants herein. By reason of the premises, said defendant banking association was on said October 17, 1922, and has ever since been, lawfully indebted to the plaintiff bank, and is now indebted to plaintiff bank in the aforesaid sum of $97,274.85, together with interest thereon at the rate of 6 per cent. per annum from the aforesaid 5th day of September, 1927.
Plaintiff has demanded of the defendant bank and its liquidating committee the payment of said debt and judgment, but said defendants have failed, refused, and neglected to pay the same, or any part thereof.
There are not now sufficient assets belonging to said defendant bank to pay its debts. After the assets on hand have been liquidated and the amount of the same ascertained, and after the amount of its debts have likewise been determined, it will then become necessary to assess the shareholders of said bank to the amount of their stock therein at the par value thereof, in order to pay the debts due plaintiff and other creditors. The defendants who are named herein as shareholders of said bank or as the executors, administrators, heirs, or legatees of shareholders, are liable under 38 Stat. 273, § 23 (12 USCA § 64), each to the par value of the stock owned by such shareholders for such deficiency as may hereafter be determined.
The prayer is for a receiver, a winding up of the defendant bank, an ascertainment of the debts and assets of the defendant bank, an application of the assets to the payment of debts, and judgment against the stockholders of defendant bank sufficient to pay any deficiency, but not exceeding the statutory liability.
The answer of the defendants admits the obtaining of the judgment in the state court by plaintiff; but alleges: ...
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