Hessen Siak Shams v. Nebraska State Bank of Bloomfield, Neb.

• Decision Date: 10 April 1931
• Docket Number: No. 272.,272.
• Citation: 48 F.2d 894
• Parties: HESSEN SIAK SHAMS v. NEBRASKA STATE BANK OF BLOOMFIELD, NEB.
• Court: U.S. District Court — Panama Canal Zone

48 F.2d 894 (1931)

HESSEN SIAK SHAMS v. NEBRASKA STATE BANK OF BLOOMFIELD, NEB.

No. 272.

District Court, D. Nebraska, Norfolk Division.

April 10, 1931.

M. F. Harrington, of O'Neill, Neb., for plaintiff.

Kelsey & Kelsey, of Norfolk, Neb., for defendant.

WOODROUGH, District Judge.

The plaintiff, an alien, native of Syria, sues the Nebraska State Bank of Bloomfield, Neb., in an action at law to recover upon two certificates of deposit, one issued to him in September, 1928, and one in October, 1928. The case is submitted for judgment upon the pleadings, a motion to bring an additional party into the case, a stipulation of facts, argument of counsel, and briefs.

It appears that the state bank in which the deposits were made became insolvent in February, 1929, and the department of trade and commerce of the state of Nebraska took possession of it as provided by law for the purpose of administering and disposing of its affairs.

Thereafter, and on the 30th of April, 1929, an amendment to the state banking laws of Nebraska went into effect authorizing so-called reorganization of banks which had been taken over by the department of trade and commerce, and, all the depositors and unsecured creditors of the bank excepting the plaintiff and one other having consented thereto, a reorganization plan was carried out and consummated in May, 1929. The plan conforms to the new statute, which is as follows (Banks and Banking, 8-181, Comp. St. 1929):

"If the Secretary of the Department of Trade and Commerce with a view of restoring the solvency of any bank of which the department has taken charge pursuant to law shall approve a reorganization plan entered into between depositors and unsecured creditors representing eighty-five per cent. or more of the total amount of deposits and unsecured claims of such bank on the one hand and the bank or reorganizers thereof on the other, then and in such case all other depositors and unsecured creditors shall be held to be subject to such agreement to the same extent and with the same effect as if they had joined in the execution thereof, and their claims shall be treated in all respects as if they had joined in the execution of such articles of reorganization, in the event of restoration of such bank to solvency and the re-opening of the same for business. Any county, city, village, township or school district, through its governing board, and the State, through the governor, may enter such agreement. (R. S. 1913, 328; 1919 p. 705; C. S. 1922, 8029; 1923 p. 443; 1925 p. 122; 1929 p. 164.)"

The effect of the steps which have been taken is that new and amended articles of incorporation are adopted for "Nebraska State Bank" of Bloomfield (the name of the old bank being "The Nebraska State Bank"). Under these new and amended articles new capital stock is subscribed for by persons not stockholders in the old corporation in the par amount of $25,000 and issued at $140 a share so as to provide $10,000 surplus above the capital. The aggregate of deposits and unsecured debts of the insolvent bank was $599,516.56, and its good assets amounting to 75 per cent. of this sum were transferred by the department of trade and commerce, and the old bank to the new or reorganized corporation, in consideration that it assumed to pay to each depositor and unsecured creditor 75 cents on the dollar in payments of 10 per cent. a month. The rest of the old bank's assets, including all rights and claims of the creditors against the bank, its officers, directors and stockholders, were turned over to a corporation called "Bloomfield Liquidation Association." This association has to liquidate these assets and administer in the interest of creditors.

The reorganized corporation, "Nebraska State Bank," has tendered, and does tender, to the plaintiff the whole amount of 75 cents on the dollar of his deposits. The Bloomfield Liquidation Association has not been made a party here. The plaintiff says that the amendment under which this scheme of reorganization payment of 75 cents on the dollar and liquidation for creditors proceeds is unconstitutional, and not binding on him. He says that he had a right to sue the bank, get a judgment against it, and through receiver and other process out of this court subject the assets of all kinds to the payment of his debt; that the law authorizing the reorganization plan and the steps taken under it impair the obligation of his contract, and deny him due process, and are...