Andrew v. State Bank of Swea City, 40966.

• Decision Date: 05 April 1932
• Docket Number: No. 40966.,40966.
• Citation: 242 N.W. 62,214 Iowa 1339
• Parties: ANDREW, SUPERINTENDENT OF BANKING, v. STATE BANK OF SWEA CITY ET AL.
• Court: Iowa Supreme Court

214 Iowa 1339

242 N.W. 62

ANDREW, SUPERINTENDENT OF BANKING,

v.STATE BANK OF SWEA CITY ET AL.

No. 40966.

Supreme Court of Iowa.

April 5, 1932.

Appeal from District Court, Kossuth County; F. C. Lovrien, Judge.

Action in equity to recover on the superadded liability of a stockholder in the State Bank of Swea City. The action was by an assignee of the receiver. The court found for the plaintiff. The defendant stockholder appeals. The facts appear in the opinion.

Reversed.Sullivan, McMahon & Linnan, of Algona, for appellant.

Quarton & Miller and L. A. Winkel, all of Algona, for appellee Riggert.

GRIMM, J.

Originally, this was an action begun by a petition in equity filed by L. A. Andrew, superintendent of banking of the state of Iowa, against the State Bank of Swea City, alleging, among other things, the insolvency of the bank and asking that the said superintendent should be appointed receiver. This petition was filed October 25, 1927. On the same day, an order was entered appointing said L. A. Andrew, superintendent, or his successor in office, permanent receiver of said bank.

On December 9, 1927, the receiver filed an “application for order of court for assessment against stockholders.” On the same day there was filed an “order authorizing receiver to proceed with action for the collection of stock assessment.”

On December 27, 1929, two years later, the receiver filed an “application for an order to sell remaining assets at public auction.” Attached to said application was a schedule of the assets to be sold and included therein, under the heading “Unpaid Stock Assessments,” was listed the name, “Paul W. Larson,” and the amount $500.

On January 8, 1930, there was filed an “order authorizing sale of assets and directing procedure of sale.” Following this, on January 23, 1930, all of the assets listed were sold for the lump sum of $2,405 to C. H. Riggert.

On March 15, 1930, C. H. Riggert filed a “motion to substitute party plaintiff and for default.” On the same day, the court entered an order, sustaining the motion in so far as the same asked the substitution of Riggert as party plaintiff.

On April 1, 1930, the defendant filed a “motion to dismiss,” which motion contained, among other things, the grounds:

“4th. Because the claim against this defendant is not such as can be sold or conveyed.

5th. Because as a matter of law the plaintiff had no right to sell or convey or assign the claim for assessment against this defendant.”

On April 9, 1930, the court made the following entry: “On consideration of the Motion of P. W. Larson the Court finds that the general creditors of the Trust should be made parties and directed that the general creditors, whose claims have been filed as such and allowed by the Receiver shall be brought in by the plaintiff. The defendant is given the right to remove (renew) his motion after the general creditors have been brought in. All parties except.”

On June 27, 1930, the receiver filed his final report. Notice was published of the hearing on this report, and on July 14, 1930, the final report was approved and the receiver was discharged.

On September 29, 1930, C. H. Riggert filed an “Amendment to Application for Order of Court for Assessment against Stockholders; and Supplemental Allegations thereto.” This amendment contains in the first division an adoption of all of the allegations in the application of December 9, 1927. Then there is alleged the sale of the assets in the hands of the receiver, including the assignment of the receiver's claim against Paul W. Larson as a stockholder.

Defendant Paul W. Larson's motion to dismiss was overruled on October 7, 1930, to which ruling he took exception.

On October 21, 1930, the defendant Paul W. Larson filed an “Amended and Substituted Answer,” in which he, in substance, denies generally and asks that the plaintiff's petition be dismissed.

The cause proceeded to trial on December 4, 1930.

It satisfactorily appears from the record that after applying all assets and paying out all the money which came into the hands of the receiver, there was still remaining, at the time the receiver was discharged, an amount due the depositors and creditors of the bank in excess of $96,000. The capital stock of the bank was only $25,000. There was an unpaid balance on general claims in excess of $19,000. The sale of assets, including the claim against Larson, brought the receiver $2,405. Of this amount, $1,470 was arbitrarily assigned by the parties in charge, to the credit of the stock assessment account.

One R. H. Miller was the examiner in charge for the receiver. He testified, among other things, as follows: “We first offered the different classes for sale separately and took bids for them but finally sold everything that was offered in one job lot for $2405.00 and my apportionment of the $2405.00 was simply the way I decided I wanted it divided. I don't know whether I had any authority or instructions from the Department to do it that way or not but that is the way I did it and I am the one that made the apportionment. I simply took that $2405.00 and divided it in the way I thought it ought to go. * * * That was not the bid I had on the stock assessment. The total of the individual bids was considerably below the total of the bid of $2405.00.”

It nowhere appears in the record what amount, if any, was actually bid for the Larson claim. As the Larson claim was sold with all the other remaining assets in the hands of the receiver, there is no way of determining what amount, if any, of the $2,405 was the proceeds of the sale of the Larson claim. Some question is raised in the record as to whether Larson was in fact a stockholder, but for the purposes of this case, we will assume, without deciding, that at all times material hereto, he was a stockholder and owned five shares of the par value of $100 each in the said State Bank of Swea City.

Numerous other questions are raised by the appellant, but as we view this case, we have occasion to determine only one.

The liability, if any, of the stockholder Larson, in this case defendant, rests primarilyupon section 9251 of the Code, which reads as follows: “9251. Liability of stockholders. All stockholders of savings and state banks shall be individually liable to the creditors of such corporation of which they are stockholders over and above the amount of stock by them held therein and any amount paid thereon, to an amount equal to their respective shares, for all its liabilities accruing while they remained such stockholders.”

The enforcement of this claim is dependent upon sections 9252, 9253, and 9254, as follows:

“9252. Enforcement. Should any such association or corporation become insolvent, its stockholders may be severally compelled to pay such deficiency in proportion to the amount of stock owned by each, not to exceed the extent of the additional liability hereby created.

9253. Action by creditor. The assignee or receiver of any such corporation, or in case there is none, or of his failure or refusal to act, any creditor thereof, may maintain an action in equity to determine the liability of the stockholders, and the amount to which each creditor shall be entitled; and all parties interested shall be brought into court.

9254. Distribution of proceeds. Should the whole amount for which the stockholders are made individually responsible, as provided by the three preceding sections, be found in any case to be inadequate for the payment of all the debts of any such association or corporation, after the application of its assets to the payment of such debts, then the amount due from such stockholders, on account of their individual liability created by said sections, as such, shall be distributed equally among all the creditors of such corporation in proportion to the several sums due them.”

Apparently the exact question before us in this case has not been decided by this court. This statutory stockholder's liability has frequently been before this court on other somewhat analogous questions. Apparently the plaintiff considers this claim against the stockholder as though it were an ordinary debt of the stockholder. He cites in support of his position section 10991 of the Code, which provides: “No action shall abate by the transfer of any interest therein during its pendency, and new parties may be brought in, as may be necessary.”

The plaintiff deals with the question as though this liability were an ordinary chose in action which, upon assignment, might be prosecuted in the name of and for the benefit of the assignee. Is it such a claim, or is...