Hudson v. Bank of Waldo

• Decision Date: 17 May 1932
• Citation: 105 Fla. 526,141 So. 750
• Parties: HUDSON v. BANK OF WALDO.
• Court: Florida Supreme Court

141 So. 750

105 Fla. 526

HUDSON v. BANK OF WALDO.

Florida Supreme Court, Division A.

May 17, 1932

Suit by the Bank of Waldo against D. S. Hudson. To review the judgment rendered, defendant brings error.

Reversed.

COUNSEL

C. R Layton and H. L. Gray, both of Gainesville, for plaintiff in error.

Adkins & Richardson, of Gainesville, for defendant in error.

OPINION

BUFORD C.J.

In July, 1929, the Bank of Waldo was taken possession of by the comptroller under the authority of the State Banking Law. On September 5th, the comptroller, acting under authority of section 4146, R. G. S., as amended by chapter 13576, Acts of 1929, declared the capital stock of the bank to be impaired and thereupon required the Bank of Waldo to assess upon its capital stock an assessment of 100 per cent. of the face value thereof, being in addition to the amount invested in the shares of stock. Thereafter, on September 10th, the Bank of Waldo made and levied such assessment of 100 per cent against its various stockholders, and such assessment was made immediately due and payable. On September 27, 1929, the Bank of Waldo reopened for business by order of the comptroller, and on July 15, 1930, the bank filed suit against the plaintiff in error to recover the sum of $400 being the assessment on four shares of stock of the par value of $100 each, together with interest at 8 per cent. from date of the assessment.

Demurrer was filed to the declaration which raised the question as to whether or not a personal action could be maintained by the plaintiff against the defendant. The demurrer was overruled.

Thereafter pleas were filed, which were demurred to. Demurrer was overruled as to the first and second pleas; the third plea was stricken because it was an improper plea to the declaration, and the demurrer was sustained as to the remainder of the pleas.

The first plea was that the defendant denies that he was a stockholder in the plaintiff corporation at the time alleged or at any time.

The second plea denied ownership of the stock.

As this case must be disposed of upon the question as to whether or not plaintiff could maintain a personal action against the defendant, it is unnecessary to discuss the other questions raised.

In the case of Russ v. Golson, in which opinion was filed August 7, 1931, reported 136 So. 506, 508, we pointed out that there is a difference between an assessment to rehabilitate impaired capital stock and an assessment for the benefit of creditors made upon the stockholders of a defunct bank by the comptroller when the same has been taken over for liquidation, in the following language:

'Sections 4146 and 4128, Revised General Statutes of 1920, set forth above, are substantially the same as the federal statutes on the same subject, 5205 and 5151, Rev. St. U.S., title 12, USCA (Banks and Banking) §§ 55 and 63, and we may conclude that our Legislature had the federal law before it when considering this legislation. McNeill v. Pace, 69 Fla. 349, 68 So. 177; Chavous v. Gornto, 89 Fla. 12, 102 So. 754.

'Assessment of bank stock to make good impairment of capital and double liability of stockholders subserves entirely distinct and wholly different purposes. One is an incident of operation; the other is an incident of liquidation. Citizens' Bank v. Needham, 120 Kan. 523, 244 P. 7, 45 A. L. R. 1202. The one is the price paid for the privilege of continuing in business (Delano v. Butler, 118 U.S. 634, 7 S.Ct. 39, 30 L.Ed. 260); a stock liability (Citizens' Bank v. Needham, supra); in the nature of reinvestment in stock (Duke v. Force, 120 Wash. 599, 208 P. 67, 23 A. L. R. 1354); the other is an individual liability; it does not arise except in case of liquidation, and is enforced for the benefit of creditors of the bank. Citizens' Bank v. Needham, supra; Delano v. Butler, supra.'

Section 4162, R. G. S., as amended by chapter 13576, Acts of 1929, authorizes the liquidator to sue for and enforce the individual liability of the stockholder, which liability shall have been determined by an assessment on the capital stock made by the comptroller in regard to a bank, banker, banking firm, or banking and trust company being liquidated under his supervision, while section 1 of chapter 7930, Laws of Florida, as amended by section 17 of chapter 13576, supra, provides what we deem to be the exclusive method of enforcing the personal liability of a shareholder against whom an assessment is made under the provisions of sections 4128 and 4146, R. G. S., as amended by chapter 13576. The amendment referred to reads as follows:

'That if any shareholder or shareholders of any banking and trust company or savings bank organized under the laws of the State of Florida, shall neglect or refuse after notice to pay any assessment on his or her share or shares of the capital stock of any such company or bank as provided by law, it shall be the duty of the board of directors to cause a sufficient amount of the capital stock of such shareholder or shareholders to be sold at public or private auction sale (after ten days notice shall be given by posting such notice of sale in the office of the bank, or by publishing such notice in a newspaper of the city or town in which the bank is located, or in a newspaper published nearest thereto) to make good the deficiency, and the balance, if any, shall be returned to such delinquent shareholder or shareholders.'

It appears that the original statute in Iowa in this regard was practically the same as ours, but in 1925 the Legislature amended the banking act of Iowa by what became section 9248-a1 of the 1927 Code, which reads as follows:

'Should the proceeds of a sale under the preceding section of all of the stock of any stockholder be insufficient to satisfy his entire assessment liability he should be personally liable for the deficiency, which may be collected by suit brought in the name of the bank against such stockholder.'

In commenting upon these statutes, the Supreme Court of Iowa in the case of Woodbine Savings Bank of Woodbine v. Shriver, 236 N.W. 10, 12, said:

'Returning again to section 9246 of the 1927 Code, it is found that the legislative provision there is:

"Should the capital stock of any state or savings bank become impaired by losses or otherwise, the superintendent of banking may require an assessment upon the stockholders. * * *'

'The assessment plainly is not upon the stock, as such, but rather upon the stockholder personally. If, under section 9246, above-quoted, the assessment is upon appellant individually, then section 9248-a1 in no way changes such individual liability. Originally, under the old statute, the assessment was against the stockholder and not against the stock. Likewise, under the amendment the assessment is still against the stockholder. According to the original statute, the stockholder was personally and primarily liable for the assessment, and section 9248 and its predecessors had to do only with the remedy and nothing else. Then, assuming that the only remedy originally made for the collection of the assessment was to confiscate the stockholder's stock, nevertheless, so far as the remedy was sufficient, the stockholder was personally liable for the assessment. This burden was cast upon the stockholder himself, even though the only remedy to enforce the obligation was by the sale of the stock. Consequently, appellant's obligation in the premises has not been increased. He was always obligated to pay the assessment. Of course, if he did not pay, the only remedy under the statute was to sell his stock; yet the obligation to pay was there just the same. Now, under the new legislation, the stockholder's liability has not been increased, but rather the remedy for enforcing that obligation has been changed. Were the remedy a part of appellant's contract, a change thereof would amount to an impairment. Barnitz v. Beverly, 163 U.S. 118, 16 S.Ct. 1042, 41 L.Ed. 93; Conley v. Barton, 260 U.S. 677, 43 S.Ct. 238, 67 L.Ed. 456.

'Obviously in the case at bar, however, we are not confronted with a case where the remedy became a part of the contractual obligation. There is not a syllable in the statutory contract which in any way indicates that the remedy is a part of the agreement. It was not said by the Legislature that there could be no other or different remedy. Hence it was perfectly proper for the lawmaking body to adopt section 9248-a1 of the 1927 Code, because such amendatory legislation pertained to the remedy only. The purpose of this legislative enactment was to afford a more appropriate remedy for an obligation already existing against appellant. Ever since becoming a stockholder of the appellee bank, he was obligated to pay any legal assessment made for the purpose of repairing the capital stock. This new legislation simply recognized that obligation

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