Bank of Minnesota v. Anderson
| Decision Date | 08 December 1897 |
| Docket Number | 10,897--(187) |
| Parties | BANK OF MINNESOTA and Others v. JOHANNA ANDERSON |
| Court | Minnesota Supreme Court |
Appeal by defendant Anderson from an order of the district court for Ramsey county, Otis, J., authorizing and directing the receivers of the plaintiff bank to enforce the liability of its stockholders for the benefit of its creditors. Affirmed.
Appeal dismissed.
Enoch Johnson and W. S. Dwinnell, for appellant.
Young & Lightner, for respondents.
The receivers believe that Laws 1895, c. 145, is an avowed copy of the national bank act, that the construction of the federal act and the practice under it apply to the act of 1895, and that they cannot enforce the stock liability until so ordered by the court.
A presumption arises that where a statute, the construction of which has been judicially determined, has been adopted into the statute law of another state, the legislature adopted the statute with that construction. Nicollet v. City Bank, 38 Minn. 85, 88; In re St. Paul, 37 Minn 164; Cooley, Const. Lim. 52, and cases; Warner v Texas, 164 U.S. 418, 423; McDonald v. Hovey, 110 U.S. 619, 628. In the first case cited this rule was applied to a section of the state banking law taken from the national bank act. A comparison of the act of 1895 with the national bank act and the old bank law, G. S. c. 33, makes it very plain that the act of 1895 was adopted in place of the old bank law. Provisions for issuing bank notes having been long obsolete by reason of the federal tax, such provisions were eliminated from the act of 1895.
Of the old bank law G. S. 1894, §§ 2481-2489, 2495-2497 2502-2510, 2518, 2522, 2523, 2526 and 2527, relate solely to bank notes and circulation. The remaining sections cover the ground of the act of 1895.
Of the national bank act R. S. (U. S.) §§ 5157-5189, 5194 5195, 5196, 5203, 5206, 5207, and 5222-5233, relate solely to bank notes and circulation. The remaining sections cover the ground of the act of 1895.
An examination of the corresponding sections makes it clear beyond question that in the act of 1895 the legislature intended to adopt, so far as they could be made applicable all of the essential features of the national bank act, the precise phraseology of which is closely adhered to. The provisions of chapter 33 where different from the federal act are eliminated.
The practice and procedure under the national bank act for winding up insolvent banks and enforcing stock liability are governed solely by R. S. (U. S.) §§ 5234, 5235. These sections are found in substantially the same phraseology in sections 20 and 21 of the act of 1895. No similar provision has ever been found in our state laws. Evidently by reason of their enactment, the provisions of the old bank law found in G. S. 1894, §§ 2512, 2525, were eliminated.
The provisions in the national bank act for winding up national banks are brief and a mere skeleton of procedure. Federal decisions have fully construed these provisions and settled the practice. In Kennedy v. Gibson, 8 Wall. 498 (1869), it was held that the receiver could not enforce stock liability until directed by the comptroller. This rule has been adhered to ever since. In the act of 1895 a receiver cannot enforce stock liability until directed by the district court. The order of the comptroller declaring to what extent the individual liability shall be enforced is conclusive. Kennedy v. Gibson, supra; Casey v. Galli, 94 U.S. 673; National Bank v. Case, 99 U.S. 628. Under the decisions cited above the winding-up procedure of the federal act has proved beneficial in a saving of the unnecessary expense and delay of two proceedings, in making the stock liability bear interest from the date of the order to enforce the same, and the right to sue stockholders singly and at law when it is ascertained that the whole liability must be paid. The present procedure under chapter 76 is beautiful in theory, but in practice is one of the most burdensome and inefficient proceedings known to the law.
It is always within the power of the legislature to change the remedy for enforcing the stockholders' liability. Allen v. Walsh, 25 Minn. 543, expressly recognizes that the remedy may be such as is authorized by the statute, but under the statute then in existence that case held that the sole remedy given by the statute was the equitable action under chapter 76. As to banks the legislature has changed the remedy to that in force under the national bank act. To obtain the beneficial effects of that act, this law must be construed as the bank act has been by the federal courts, so as not merely to require a direction from the comptroller (or district court), but also to give the right of separate actions against stockholders and provide for interest on the stock liability.
The receivers were appointed under the act of 1895, hence they are placed in the position of sustaining the authority of that act, at least so far as relates to their appointment and their duty to enforce all stock liability. It is not now necessary to decide more than that this act is constitutional and applicable to the extent that the receivers are the proper parties to enforce the stock liability whatever that liability may be.
The Bank of Minnesota is a corporation organized prior to 1895 under the provisions of G. S. 1878, c. 33, §§ 1-46 (G. S. 1894, §§ 2481-2532). These sections constitute all of G. S. 1866, c. 33. We find no other provision in G. S. 1866 which can be construed as relating to banks of any kind. In 1894 there were in fact but two laws that could be claimed to relate to any kind of bank or saving institution: (1) the general banking law under which this bank was organized, and (2) the law relating to savings banks or associations.
Laws 1895, c. 145, is entitled "An act to revise the laws relating to banks of discount and deposit." There would be no foundation for a claim that the act of 1895 attempted to revise laws relating to savings institutions. The only laws which the act of 1895 could revise or relate to must be chapter 33 of the general statutes as amended by subsequent laws. A comparison of the two laws removes all doubt that the law under which this bank was organized was the law revised by the act of 1895. Hence it follows that the act of 1895 so far as constitutional applies to the Bank of Minnesota.
Where no action is taken under section 20 by the superintendent of banks and no receiver is appointed, sequestration proceedings and proceedings to enforce stock liability under chapter 76 may be instituted. Minneapolis v. City Bank, 66 Minn. 441.
The question here is whether, after proceedings for the involuntary liquidation of the affairs of a bank have been begun under section 20, it is open to a creditor to institute proceedings under chapter 76 of the general statutes to enforce the stock liability. We maintain that this question has been settled adversely to the appellant by the decisions under the national bank act. Richmond v. Irons, 121 U.S. 27; Stanton v. Wilkeson, 8 Ben. 357 (22 Fed. Cas. 1074); Story v. Furman, 25 N.Y. 214, 231; Walker v. Crain, 17 Barb. 119; Hewett v. Adams, 50 Me. 271, 282; 3 Thompson, Corp. § 3561.
The stockholders in a corporation are severally and not jointly liable. It never was heard that where parties are severally liable for the same debt they must all be sued together, because they may have rights of contribution between themselves. Neither would such a rule apply where the full liability of each must be paid, because in such case no right of contribution would exist.
Davis, Kellogg & Severance, attorneys for certain stockholders, by consent filed a brief.
The receivers petitioned the lower court for an order that the stockholders pay into court their liability on or before a certain day, in default of which interest should run against them; but the receivers asked that only the creditors be given notice, and an examination of the order shows that no notice was given to the stockholders. That court overruled the objections of certain creditors and directed the receivers to enforce the liability. In its order the court found: (a) The amount of capital stock and that holders of over $ 300,000 thereof were insolvent. This insolvency was found in a proceeding in which the stockholders were not parties. (b) That the assets of the bank were wholly insufficient to pay its creditors, and that it was necessary that all individual liability of the stockholders be paid in order to satisfy the debts. (c) That the stockholders pay their liability one dollar for each dollar of stock by August 1, 1897, and one dollar for each dollar of stock by September 1, 1897.
Counsel claim that interest runs from the date of default, under this order made without a hearing or notice to the parties interested. Interest does not run from the date fixed by the court in its order. Cleveland v. Burnham, 64 Wis. 347, 361; Sackett v. Blake, 3 Rich. Eq. 225, 233; Munger v. Jacobson, 99 Ill. 349; 1 Cook, Stockh. § 225, subd. a; Cole v. Butler, 43 Me. 401; Minneapolis v. Swinburne, 66 Minn. 378.
The receivers propose to get an adjudication from this court radically changing the enforcement of stockholders' liability, and in fact radically changing the very nature of the liability without any hearing by the parties most interested. In this proceeding the only parties are the creditors, whose interests are antagonistic to the stockholders, and the receivers who are enforcing the liability. It seems improper that the court should pass upon any of these questions affecting the stockholders' liability and the enforcement thereof, in the absence of the parties principally to be affected.
The receivers claim that because our bank act is framed in...
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