Baird v. Whitmire
| Decision Date | 22 January 1932 |
| Docket Number | 6005 |
| Court | North Dakota Supreme Court |
Appeal from the District Court of Burleigh County, Pugh, J.
Reversed.
Zuger & Tillotson (F. C. Heffron of counsel), for appellant.
"A clause in a statute purporting to repeal other statutes is not in all cases conclusive evidence of legislative intention." Golden Valley v. Lundin, 52 N.D 420, 203 N.W. 317.
No express authority is necessary for a receiver of closed banks to enforce the statutory liability of stockholders. Wilson v. Book (Wash.) 45 P. 959.
The contingent liability of stockholders of a bank under section 11, article 12 of the constitution, for its debts, can be enforced only by its receiver. Watterson v. Masterson (Wash.) 46 P. 1041; Waller v. Hamer (Kan.) 69 P. 185.
A receiver of a corporation, who, under the statute, is vested with the corporate assets, may enforce the liability of delinquent stockholders to the corporation for the amounts unpaid upon their shares of capital stock. 34 Cyc. 395.
A statute should be construed as a whole, and all its provisions should be given effect. 36 Cyc. 1128.
Dullam & Young, for respondent.
The repeal is unqualified so far as civil liability is concerned and operates to destroy inchoate rights. It releases all imperfect obligations. The right which the receiver is seeking to enforce here was inchoate at the time the new act took effect. It had not then ripened into an obligation and it cannot claim vitality by virtue of a statute which has been destroyed. 25 R.C.L. 932; Mahoney v. State, 5 Wyo. 520, 63 Am. St. Rep. 64, 42 P. 13; Coffin v Rich, 45 Me. 507, 71 Am. Dec. 559; Davis v. Johnson, 41 N.D. 85, 170 N.W. 520.
The statutory liability of stockholders is not in any sense an asset, right or interest of the bank which it as an insolvent debtor can by its deed of assignment pass to its assignee or in any manner vest the enforcement thereof in him; in the absence of some statutory provision conferring the right neither the bank nor its assignee nor receiver can enforce the stockholder's liability. 3 R.C.L. § 271, p. 641; 23 R.C.L. 389; 14a C.J. 995; Runner v. Dwiggens, 147 Ind. 238, 46 N.E. 580, 36 L.R.A. 645.
The action to enforce can be maintained only by the creditors themselves, in their own right and for their own benefit. Cook, Stock & Stockholders, § 218; Minneapolis Baseball Co. v. City Bank, 66 Minn. 441, 69 N.W. 331, 38 L.R.A. 415; Walsh v. Shanklin, 125 Ky. 715, 102 S.W. 295, 31 L.R.A.(N.S.) 365; Hancock Nat. Bank v. Ellis, 172 Mass. 39, 51 N.E. 207, 43 L.R.A. 396; Alsop v. Conway, 188 F. 568, 110 C.C.A. 366; Hamilton Nat. Bank v. Am. L. & Tr. Co. 92 N.W. 189.
." Corrington v. Crosby, 54 N.D. 619, 210 N.W. 342, 48 A.L.R. 660.
A mere chancery receiver is but an officer of the court appointing him and that in the absence of some conveyance or statute vesting in him title to the debtor's property, he cannot sue in the courts of a foreign jurisdiction for its recovery upon the mere order of the appointing court or without other authority than that arising from his appointment as receiver. Sterrett v. Second Nat. Bank, 3 A.L.R. 256, 159 C.C.A. 55, 246 F. 753; Hale v. Allinson, 47 L. ed. 380; Great Western Min. & Mfg. Co. v. Harris, 49 L. ed. 1163.
A statute appointment neither enlarges nor diminishes the limitation on his (the receiver's) action. His responsibilities are unaltered. Booth v. Clark, 15 L. ed. 164.
The plaintiff in winding up the affairs of an insolvent bank, brought this action to enforce the added liability of stockholders. The defendant Borcherding demurred to the complaint alleging:
1. That the plaintiff has not legal capacity to sue.
2. That there is a defect of parties plaintiff in this: that the creditors in whose behalf and for whose benefit this action is brought have not been made parties plaintiff; and that no reasons appear in the complaint for the failure to make them parties plaintiff.
3. That the complaint does not state facts sufficient to constitute a cause of action.
The trial court sustained the demurrer and the plaintiff appeals.
The complaint shows that the bank involved was closed on September 15, 1931 and that the plaintiff was appointed receiver on September 29, 1931. The complaint does not state when the bank was organized, that is, whether it was organized prior or subsequent to July 1, 1931, but the points involved are predicated on the theory that the bank was organized prior to the enactment of chapter 96 of the laws of 1931 which went into force July 1, 1931.
Section 5189 of the compiled laws of 1913 states when "A bank shall be deemed insolvent." Chapter 53 of the session laws of 1915 amended this section by taking it in its entirety and adding thereto provisions for the appointment of a receiver by the State Examiner and State Banking Board under stated conditions, giving such receiver power to "pay corporate debts and enforce the individual liability of stockholders."
In 1923 the legislature provided an entirely new method for dealing with insolvent banks and in chapter 137 of the laws of that year, asked the Supreme Court of this State to assume "original jurisdiction of the insolvency proceedings to liquidate and wind up the affairs of all insolvent state banks within the state, at the time of the taking effect of this Act, and all such as may become insolvent during its continuance." This court was authorized to appoint a commissioner to have general supervising control over the insolvency proceedings subject to review by this court, and when a bank became insolvent the petition for the appointment of a receiver was made immediately to this court. Section 8 of said statute provides that the receiver "shall have all the powers and authorities ordinarily possessed and exercised by receivers of insolvent corporations or prescribed by statute and the court shall have all the power and authority with regard to the administration and closing of the affairs of such banks as are ordinarily possessed and exercised by courts of equity over the affairs of insolvent corporations." This statute did not carry the customary section repealing any specific statute or "all acts or parts of acts in conflict with this Act," and expired by limitation on July 1, 1926.
In 1927 the legislature re-enacted chapter 137 of the laws of 1923 and incorporated the same, practically in its entirety, in chapter 99 of the laws of that year, including the quotations heretofore set forth. This chapter 99 has no specific repealing clause. Thus when chapter 137 of the Laws of 1923 and chapter 99 of the Laws of 1927 were enacted, and while these remained in force, chapter 53 of the laws of 1915, remained on the statute books unrepealed, except in so far as a later statute transcends an earlier one repugnant thereto.
The legislature of 1931 proceeded to codify the laws dealing with banks and banking by enacting chapter 96, which was approved March 12, 1931 and went into effect July 1, 1931. Most of the provisions of chapter 137 of the laws of 1923 and of chapter 99 of the laws of 1927 are included in this Act.
In § 22 of the legislature incorporated, and re-enacted practically verbatim, the provisions of § 5168 of the compiled laws, which says:
Any variation in language makes no change in the sense or meaning.
This codification, in § 51a, contains the provision asking the Supreme Court to assume "original jurisdiction of the insolvency proceedings to liquidate and wind up the affairs of all insolvent state banking associations within the State;" and in § 51h authorized the appointment of a receiver "which receiver shall have all the powers and authority ordinarily possessed and exercised by receivers of insolvent corporations or prescribed by statute and the court shall have all the power and authority with regard to the administration and closing of the affairs of such banks as are ordinarily possessed and exercised by courts of equity over the affairs of insolvent corporations."
In § 50 of this chapter is found § 5189 of the compiled laws of 1913, as amended by chapter 53 of the laws of 1915, with the provision for the appointment of a receiver by the State Examiner eliminated therefrom, as provision is made for the appointment of a receiver by the court. This elimination takes from that chapter the provision that the receiver, when necessary has the power to, "pay corporate debts and enforce the individual liability of stockholders." Such provision is not found...
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