Bank of Dassel v. March

• Decision Date: 27 March 1931
• Docket Number: No. 28113.,28113.
• Parties: BANK OF DASSEL v. MARCH.
• Court: Minnesota Supreme Court

235 N.W. 914

183 Minn. 127

BANK OF DASSEL v. MARCH.

No. 28113.

Supreme Court of Minnesota.

March 27, 1931.

On Reargument April 10, 1931.

Appeal from District Court, Meeker County; Harold Baker, Judge.

Action by A. J. Veigel, Commissioner of Banks in charge of the Bank of Dassel, Dassel, Minn., against C. H. March. From an order overruling a demurrer to defendant's answer, plaintiff appeals.

Affirmed.

D. F. Nordstrom, of St. Paul, for appellant.

Daly & Barnard, of Renville, and N. D. March, of Litchfield, for respondent.

DIBELL, J.

Action by A. J. Veigel, the commissioner of banks, to recover an assessment of 100 per cent. levied on stock in the Bank of Dassel alleged to be owned by the defendant. The assessment was made on June 23, 1927, pursuant to Laws 1927, c. 254, 2 Mason, 1927, § 7699-20, in enforcement of the superadded stockholders' liability. The defendant answered alleging a transfer of his stock on November 23, 1925. The insolvency of the bank was on November 23, 1926. The plaintiff demurred. The demurrer was overruled and the questions involved are here on plaintiff's appeal from the order overruling the demurrer.

The ultimate question is whether the insolvency of the bank was within a year after the transfer of the defendant's stock on November 23, 1925. The bank was insolvent and was taken in possession by the commissioner for liquidation on November 23, 1926.

1. The controversy arises upon this state of facts. The defendant on November 23, 1925, owned $5,000 in the stock of the Bank of Dassel. On that day he transferred the stock, and the transfer was entered on the books of the bank. The bank became insolvent on November 23, 1926, and on that day the commissioner of banks took possession for liquidation.

It is conceded that the liability of the defendant as stockholder continued for one year after the transfer. It is considered of some importance in computing the year whether the statutory rule of computation excluding the first day and including the last applies. Gen. St. 1923 (2 Mason, 1927) § 10933 (21). The defendant urges that it does not; for if it does, the statute construes the Constitution in the computation of time which of course it cannot do; and as a part of his contention the defendant claims that his liability as transferor, if any, is based on the Constitution.

The following is paragraph 3 of section 13 of article 9 of the Constitution:

"The stockholders in any corporation and joint association for banking purposes, issuing bank notes, shall be individually liable in an amount equal to double the amount of stock owned by them for all the debts of such corporation or association; and such individual liability shall continue for one year after any transfer or sale of stock by any stockholder or stockholders."

The defendant is not a bank of issue. There are no such banks. N. W. Trust Co. v. Bradbury, 112 Minn. 76, 127 N. W. 386, citing Seymour v. Bank of Minnesota, 79 Minn. 211, 81 N. W. 1059. Therefore article 9 of the Constitution imposes no liability upon the defendant as a transferor of the stock.

Sections 1 and 3, art. 10, of the Constitution, before the amendment of 1930, were as follows:

"§ 1. The term `corporations,' as used in this article, shall be construed to include all associations and joint stock companies having any of the powers and privileges not possessed by individuals or partnerships, except such as embrace banking privileges, and all corporations shall have the right to sue, and shall be liable to be sued in all courts, in like manner as natural persons."

"§ 3. Each stockholder in any corporation, excepting those organized for the purpose of carrying on any kind of manufacturing or mechanical business, shall be liable to the amount of stock held or owned by him."

In Allen v. Walsh, 25 Minn. 543, the court referred to the limitation in section 1 of article 10 limiting the term as used in the article so as to "except such as embrace banking privileges"; and it suggested that, if it could be held to include incorporated banks not of issue, still the Legislature might impose a greater liability than that fixed by the Constitution, and this seems not to be questioned. But in International Trust Co. v. American Loan & Tr. Co., 62 Minn. 501, 65 N. W. 78, 80, 632, it was held that corporations embracing banking privileges within the meaning of article 10, § 1, referred only to the banks of issue to which reference was had in article 9, § 13; and in the course of its opinion said that, "under article 10, section 3, the stockholders are liable for corporate debts to the amount of stock held or owned by them." This is the direct holding of Northwestern Trust Co. v. Bradbury, 112 Minn. 76, 127 N. W. 386. Section 3 imposes no liability upon the transferor of stock. Prior to the constitutional amendment of 1930 such liability was imposed and is now by Gen. St. 1923 (2 Mason, 1927) § 7669, and the statute relative to the computation of time applies. The statute, section 7669, is as follows:

"The stockholders in each bank of discount and deposit shall be individually liable in an amount equal to the amount of stock owned by them for all the debts of such bank and for all transactions prior to any transfer thereof. Every person becoming a stockholder shall succeed in proportion to his interest to all the rights and become subject to all the liabilities of his transferrers; but the liability of the latter shall continue for one year after the entry of such transfer, and shall be over and above the stock owned by the stockholders in such corporation and any amount paid thereon."

From what is said it is apparent that section 10933 (21) does not construe the Constitution, and that the transferor's liability in the case before us is to be determined by section 7669. The various provisions of the statute have involved confusion. 1 Dunnell, Minn. Dig. (2d Ed.) §§ 797-803. It is well to note that the quoted language of article 9, § 13, of the Constitution and of section 7669 of the statute as to the continuance of the transferor's liability is substantially that of the Constitutional Amendment of 1930 to section 3 of article 10 of the Constitution, voted upon at the November 4, 1930, election, canvassed and the result declared on November 18, 1930, and proclaimed on November 20, 1930, by the Governor as adopted and ratified, which beyond sensible doubt is now the controlling law of liability of bank stockholders and the transferors of bank stock. Section 3, art. 10, is now as follows:

"The Legislature shall have power from time to time to provide for, limit and otherwise regulate the liability of stockholders or members of corporations and co-operative corporations or associations, however organized. Provided every stockholder in a banking or trust corporation or association shall be individually liable in an amount equal to the amount of stock owned by him for all debts of such corporation contracted prior to any transfer of such stock and such individual liability shall continue for one year after any transfer of such stock and the entry thereof on the books of the corporation or association."

2. The statute, Gen. St. 1923 (2 Mason, 1927) § 10933 (21), prescribes this rule for the computation of time:

"In computing the time within which an act is required or permitted to be done, the first day shall be excluded and the last included, unless the last shall fall on Sunday or on a holiday, in which case the prescribed time shall be extended so as to include the first business day thereafter."

Our decisions upon the computation of time, and upon the construction of the statute, are gathered in 6 Dunnell Minn. Dig. (2d Ed. & Supp.) §§ 9625-9630a. It is unnecessary to cite all the cases or to review many. The controlling words in section 7669 in which we are now interested are that "the liability of the latter [transferor] shall continue for one year after the entry of such transfer." The lien of a judgment continues "for the period of 10 years, and no longer." The day of the entry is excluded in computing the ten years. Spencer v. Haug, 45 Minn. 231, 47 N. W. 794; Davidson v. Gaston, 16 Minn. 230 (Gil. 202). The time for filing a mechanic's lien expires "60 days after the time of performing such labor." The first day is excluded and the last included. Frankoviz v. Smith, 34 Minn. 403, 26 N. W. 225. The time for redemption from a sale on a mechanic's lien foreclosure is "one year after the date of the order of confirmation." The statutory rule excluding the first day was applied. Bovey De Laittre Lumber Co. v. Tucker, 48 Minn. 223, 50 N. W. 1038. When a cause of action must be brought within a designated number of years "after the cause of action accrues" the first day is excluded. Nebola v. Minnesota Iron Co., 102 Minn. 89, 112 N. W. 880, 12 Ann. Cas. 56; Haack v. Coughlan, 134 Minn. 78, 158 N. W. 908.

Cases from other jurisdictions accord with our holdings. A lien of a judgment continues or an action can be brought upon it within a stated number of years and the first day is excluded. Parker v. Brattan, 120 Md. 428, 87 A. 756. And so where there must be an appeal within a year or other time. Boyett v. Frankfort Chair Co., 152 Ala. 317, 44 So. 546; Connerly v. Dickinson, 81 Ark. 258, 99 S. W. 82; School Board v. Alexander, 126 Va. 407, 101 S. E. 349. And where an action must be brought within a stated time. Parsons v. Egyptian Levee Co., 73 Mo. App. 458. And so where there may be a redemption within a stated period from a mortgage foreclosure sale. Styles v. Dickey, 22 N. D. 515, 134 N. W. 702. Burnet v....