Corstvet v. Bank of Deerfield
| Decision Date | 03 December 1935 |
| Citation | 263 N.W. 687,220 Wis. 209 |
| Parties | CORSTVET v. BANK OF DEERFIELD. |
| Court | Wisconsin Supreme Court |
OPINION TEXT STARTS HERE
Appeal from a judgment of the Circuit Court for Dane County; A. G. Zimmerman, Circuit Judge.
Affirmed.
This action was begun by Andrew Corstvet on the 7th day of May, 1934, against the Bank of Deerfield, a Wisconsin banking corporation, to recover upon twenty-one certificates of deposit issued to the plaintiff and his assignors by the defendant. The defendant answered and set up as a defense a stabilization agreement claimed to have been entered into on or about the 17th day of November, 1932. The issue presented by the pleadings was tried by the court, which found in favor of the defendants, and a judgment was entered on March 25, 1935, dismissing the plaintiff's complaint from which the plaintiff appeals.
The record in this case, while not unnecessarily so, is voluminous, and we shall not attempt to make a complete statement of facts. We shall here outline the issues and in the opinion such additional statements of fact will be made as are necessary to an understanding of the questions presented for decision.
The defendant had been engaged in the banking business in the village of Deerfield, which is surrounded by a prosperous farming community, for many years, and was the only local banking facility available to the village and the surrounding country. As a result of declining values and its inability to realize upon its assets, the bank found itself in difficulties, and on or about November 23, 1931, a voluntary arrangement was entered into between the bank and its depositors. The depositors signed an agreement in the following form:
“Depositors Agreement
In consideration of the like agreement of others, the undersigned depositor of Bank of Deerfield, of Deerfield, Wisconsin, hereby agrees to accept payment of his deposit or deposits from Bank of Deerfield according to the following schedule:
+----------------------+
¦March 1, 1932 ¦10%¦
+------------------+---¦
¦June 1, 1932 ¦10%¦
+------------------+---¦
¦September 1, 1932 ¦10%¦
+------------------+---¦
¦December 1, 1932 ¦10%¦
+------------------+---¦
¦March 1, 1933 ¦10%¦
+------------------+---¦
¦June 1, 1933 ¦10%¦
+------------------+---¦
¦September 1, 1933 ¦10%¦
+------------------+---¦
¦December 1, 1933 ¦15%¦
+------------------+---¦
¦March 1, 1934 ¦15%¦
+----------------------+
All unpaid installments to bear interest at the rate of 3% per annum from November 23, 1931, until paid, Bank of Deerfield to have the privilege of paying any said installment with the accrued interest prior to the due date thereof. Bank of Deerfield shall issue to the undersigned appropriate certificate or certificates evidencing the amount due hereunder. Such certificates to be issued by Bank of Deerfield, or any of them that may be issued under this or any similar agreement, may be drawn with such earlier maturity or maturities as may be approved by the Commissioner of Banking of Wisconsin.
Dated this 23rd day of November, 1931.
Andrew Corstvet, Depositor
Accepted by Bank of Deerfield
By __________”
Pursuant to this agreement, the bank issued certificates to depositors in the following form:
“Series C 984
Bank of Deerfield
Deerfield, Wis., Nov. 23, 1931.
Andrew Corstvet Has Deposited in This Bank Bank of Deerfield $256 and 40 Cts. Dollars $256.40 Payable to the Order of Self--in Currency Upon the Return of this Certificate Properly Endorsed on Sept. 1, 1932 with interest at the rate of Three Per Cent. (3%) Per Annum.
Clara Teisberg, Cashier.
A
The Right of 60 Days Notice hereby Reserved.
Not Negotiable before Maturity.
Certificate of Deposit not Subject to Check.”
The certificates were in series A to H inclusive and were numbered and corresponded to the amounts due each depositor according to the several depositors' agreements. Series A and B were paid. Upon the completion of this arrangement, the bank accepted deposits. These deposits were segregated in an account called “New Deposits” and on October 15, 1932, there were in the bank new deposits subject to check in the sum of $17,097.97, represented by certificates $6,056.08 and in savings account $644.20, making a total of $23,798.25. There was on that day due on the so-called deferred deposits $347,460.11. As the due date of series C certificates, September 1, 1932, approached, the bank found itself unable presently to discharge its obligations and in accordance with the provisions endorsed upon the certificate elected to require sixty days notice of intention to withdraw. The bank had conferences with the state banking department and on October 17, 1932, an holiday proclamation was issued by the president of the village of Deerfield and the bank closed its doors, which remained closed until November 17, 1932, during which time a second stabilization agreement was entered into. The first stabilization was a voluntary arrangement and not one provided for under the statutes of the state of Wisconsin. In making the second stabilization, the commissioner of banking proceeded under the provisions of section 220.07(16). More than 80 per cent. of the depositors of the bank signed the following agreement:
“Depositor's Agreement.
The undersigned depositor of the Bank of Deerfield, Deerfield, Wisconsin, hereby agrees to accept payment of 40% of the total amount represented by deferred certificates of deposit heretofore issued the undersigned, and/or, in the event the undersigned has made new deposits since November 21, 1931, then the undersigned agrees to accept 100% of such new deposit account from said Bank according to the following schedule:
+-------------------------------+
¦6 months after date hereof ¦5% ¦
+---------------------------+---¦
¦12 months after date hereof¦5% ¦
+---------------------------+---¦
¦16 months after date hereof¦10%¦
+---------------------------+---¦
¦20 months after date hereof¦5% ¦
+---------------------------+---¦
¦24 months after date hereof¦10%¦
+---------------------------+---¦
¦28 months after date hereof¦5% ¦
+---------------------------+---¦
¦32 months after date hereof¦5% ¦
+---------------------------+---¦
¦36 months after date hereof¦10%¦
+---------------------------+---¦
¦40 months after date hereof¦15%¦
+---------------------------+---¦
¦44 months after date hereof¦15%¦
+---------------------------+---¦
¦48 months after date hereof¦15%¦
+-------------------------------+
All unpaid installments to bear interest at the rate of 3% per annum from date until paid, Bank of Deerfield, or its successors, to have the privilege of paying any such installments, with accrued interest thereon, prior to the due date thereof. Bank of Deerfield, or its successor, shall issue to the undersigned appropriate certificate or certificates evidencing the amount due hereunder. Such certificates to be issued hereunder, or any of them that may be issued under this or any similar agreement, may be drawn with right of 60 days' notice reserved or with such earlier maturity or maturities as may be determined by the Board of Directors of said Bank, and approved by the Commissioner of Banking.
In the event the undersigned holds deferred certificates of deposits heretofore issued by the bank, then upon acceptance hereof by Bank of Deerfield, claim for the balance of 60% of the amount represented by certificates of deposit now held by the undersigned is hereby assigned to the Trustees named in a certain agreement of even date herewith, between said Bank and said Trustees, in trust for the purpose and upon the terms therein provided.
This offer is made in consideration of the like offer of other depositors and shall be binding upon the undersigned upon acceptance by the Bank and upon its acceptance of like offers of others.
Dated this ________ day of November, 1932.”
Contemporaneously, the bank entered into an arrangement by which Pearl E. Fox, B. J. Berge, and H. J. Stevlingson were named as trustees, the material part of which, omitting the formal parts and signatures, is printed in the margin. 1
In the new set-up the liability of the bank on account of certificates of deposit was $141,321.25. The payment of the remainder, $211,981.88, was secured by certain doubtful assets transferred by the bank to the trustees.
The plaintiff and his assignors refused to enter into the October, 1932, stabilization agreement. Under the arrangement made, those persons who had deposited money after November 23, 1931, the date of the so-called first stabilization agreement were to be paid the amount so deposited in full, although a number consented to have payment deferred.
On the 14th day of July, 1934, the commissioner of banking approved the plan of stabilization adopted as of November 17, 1932. The plaintiff, regarding the second stabilization agreement as void and of no legal effect, brought this action to recover upon the certificates held by him personally and as assignee.
Olin & Butler, R. M. Rieser, and Eldon J. Cassoday, all of Madison, for appellant.
Gilbert, Ela, Heilman & Raeder, G. Burgess Ela, and Oscar Christianson, all of Madison, for respondent.
James E. Finnegan, Atty. Gen., and Harold M. Wilkie, Sp. Counsel, of Madison, amici curiæ.
The plaintiff contends, first: That section 220.07(16) St.1933, does not apply to depositors who were such prior to the date of its passage, January 23, 1932; that if section 220.07(16) is construed to apply to deposits made prior to the date of the act, it is unconstitutional and void because it impairs the obligation of the contract existing between the plaintiff and the bank. Second: The plaintiff likewise contends that so construed the statute is unconstitutional because in contravention of section 1 of the Fourteenth Amendment of the Constitution of the United States and section 13 of article 1 of the Constitution...
To continue reading
Request your trial
-
Banking Comm'n v. First Wisconsin Nat. Bank of Milwaukee
...by this tribunal before resort may be had to the courts. It is contended that this is the effect of the holding in Corstvet v. Bank of Deerfield, 220 Wis. 209, 263 N.W. 687. In that case the action was by Corstvet against the Bank of Deerfield to recover upon twenty-one certificates of depo......
-
State ex rel. Attorney Gen. v. Fasekas
...Each code approved under the provisions of this chapter shall contain an express provision to that effect. In Corstvet v. Bank of Deerfield (1936) 220 Wis. 209, 263 N.W. 687, 697, it was held that a dissenting stockholder who had not sought a review of the act of the commissioner of banking......
-
Oklahoma Public Welfare Com'n v. State ex rel. Thompson
... ... action by the agency and hence possibly no real dispute ... First Nat. Bank v. Albright, 208 U.S. 548, 28 S.Ct ... 349, 52 L.Ed. 614 ... One of ... the ... Tamaqua, etc., ... Ry.Co., 259 Pa. 462, 103 A. 287, 289, 5 A.L.R. 20; ... Corstvet v. Bank of Deerfield, 220 Wis. 209, 263 ... N.W. 687, 697; Earl Carrol Realty Corp. v. New York ... ...
-
Okla. Pub. Welfare Comm'n v. State ex rel. Thompson
...Ct. 553, 71 L. Ed. 978; St. Clair Borough v. Tamaqua, etc., Ry. Co., 259 Pa. 462, 103 A. 287, 289, 5 A.L.R. 20; Corstvet v. Bank of Deerfield, 220 Wis. 209, 263 N. W. 687, 697; Earl Carrol Realty Corp. v. New York Edison Co., 141 Misc. 266, 252 N.Y.S. 538, 543; Teeter v. Los Angeles, 209 Ca......