Lawrence v. DeBoer

• Decision Date: 12 October 1935
• Docket Number: No. 119.,119.
• Citation: 273 Mich. 172,262 N.W. 660
• Parties: LAWRENCE v. DeBOER et al.
• Court: Michigan Supreme Court

273 Mich. 172

262 N.W. 660

LAWRENCE

v.DeBOER et al.

No. 119.

Supreme Court of Michigan.

Oct. 12, 1935.

Suit by Howard C. Lawrence, as receiver of the American Home Security Bank, against Cornelius DeBoer, trustee of Cornelius Wisse and Jennie L. Wisse, under the will of Dr. Iman Wisse, deceased, Garret Stockreef, and others, devisees under the will of Dr. Iman Wisse, deceased. Decree for defendants, and plaintiff appeals.

Reversed and remanded.

BUSHNELL, J., dissenting.

Appeal from Circuit Court, Kent County, in Chancery; William B. brown, judge.

Argued before the Enfire Bench.

John M. Dunham, of Grand Rapids, (Dunham & Sherk, of Grand Rapids, of counsel) for appellant.

Earl F. Phelps, of Grand Rapids, for appellees.

NELSON SHARPE, Justice.

The allegations in the bill of complaint and certain facts which, upon the hearing in this court, were conceded, and which we were requested to treat as embodied therein, may be summarized as follows:

The American Home Security Bank, a Michigan banking corporation, doing business in the city of Grand Rapids, was closed by order of the Governor on February 12, 1933, and did not reopen. In March following the plaintiff, Howard C. Lawrence, was appointed conservator thereof, and continued to act as such until the 15th day of October, 1933, when he was appointed receiver thereof.

At the time the bank closed, Dr. Iman Wisse, of Grand Rapids, was the owner of 340 shares of its stock, of the par value of $3,400. He died on March 23, 1933, leaving a last will and testament, which was duly admitted to probate on June 27th following. An order was entered limiting the time for filing claims against the estate to December 11, 1933, and was duly published on July 14th, 21st, and 28th, of that year. No claims were presented or allowed, and on April 24, 1934, an order was entered closing the estate and for distribution thereof under the provisions in the will therefor.

The bank stock had been included in the inventory of the estate. At the time the order of distribution was made, each of the persons entitled thereunder, and who are here made defendants, signed a writing, which was filed in the court, in which they declined and refused to accept any of the shares of the stock, and declared that they did not assume any responsibility on account thereof.

On November 15, 1933, an assessment of $100 per cent. was made by the state banking commissioner against the stockholders of the bank. The plaintiff had no notice of the death of Dr. Iman Wisse or of the probate of his estate, and a notice of the assessment was sent by him to the doctor's address as shown by the records of the bank, and was not returned.

The bill of complaint herein was filed to enforce payment of the assessment by those to whom the estate of the deceased passed under the will and the order of distribution made pursuant thereto. In his prayer for relief the plaintiff asked:

‘That the court decree that each one of them (the defendants) is liable for their respective proportionate shares of the obligation created by the ownership of said stock in the said Dr. Iman Wisse estate at the time that the said assessment was levied and became effective.

‘That any sum found to be due from each and all of said defendants to the said plaintiff be ordered paid, and that plaintiff have lien upon assets received, and that for the collection of the same.’

The defendants moved to dismiss the bill for the following reasons:

‘(1) The Court has no jurisdiction of the subject matter for which action is brought.

‘(2) That said cause of action, if any ever existed, was not brought within the time limited by law.

‘(3) That the bill of complaint states no cause of action entitling the plaintiff to equitable relief.

‘(4) The Court has no jurisdiction over the defendants.’

The trial court found that ‘under the facts and circumstances of this case, a Court of Equity has no power to consider or allow the claim as made by the plaintiff.’

A decree was entered dismissing the bill, from which the plaintiff has taken this appeal.

On plaintiff's appointment as receiver it became his duty to proceed to close up the bank and to enforce the statutory liability of the stockholders as provided by law.

The applicable statute (3 Comp. Laws 1929, § 11945) reads as follows: ‘The stockholders of every bank shall be individually liable, equally and ratably, and not one (1) for another, to satisfy the obligations of said bank to the amount of their stock at the par value thereof, in addition to the said stock; but persons holding stock as executors, administrators, guardians or trustees, and persons holding stock as collateral security, shall not be personally liable as stockholders, but the assets and funds in their hands constituting the trust shall be liable to the same extent as the testator, intestate, ward or person interested in such trust funds would be, if living or competent to act; and the person pledging such stock shall be deemed the stockholder and liable under this section. Such liability may be enforced in a suit at law or in equity by any such bank in process of liquidation, or by any receiver, or other officer succeeding to the legal rights of said bank.’

The obligation of the stockholder under this statute is both contractual and statutory. Fors v. Thoman, 267 Mich. 148, 255 N. W. 297.

The action of the trial court was based on the provision in 3 Comp. Laws 1929, § 15687, which reads as follows: ‘Every person having a claim against a deceased person, proper to be allowed by the commissioners, who shall not, after the publication of notice as required in the second (2nd) section of this chapter, exhibit his claim to the commissioners within the time limited by the court for that purpose, shall be forever barred from recovering such demand, or from setting off the same in any action whatever.’

This statute has been construed with strictness, its purpose being to secure the speedy settlement of estates in the probate court. Winegar v. Newland, 44 Mich. 367, 6 N. W. 841;Seilnacht v. Wayne Probate Judge, 201 Mich. 536, 167 N. W. 837;Second Nat. Bank of Saginaw v. Gamble, 227 Mich. 31, 198 N. W. 340.

Section 15708, 3 Comp. Laws 1929, reads in part as follows: ‘If any person shall be liable as security for the deceased or have any other claim against his estate which cannot be proved as a debt before the commissioners, or allowed by them, the same may be presented with the proper proof to the probate court, or to the commissioners, who shall state the same in their report, if such claim shall be presented to them.’

A controlling question here presented is whether the omission to file a claim against the estate with the commissioners bars plaintiff's right of recovery or, in other words, does this section apply to the liability of the deceased as a stockholder for an assessment which may be made against him after his death? The obligation therefor is assumed by a stockholder when he purchases stock. It is also imposed on him by statute. It is, however, one upon which no liability may ever attach. It differs from an obligation assumed as a surety or as an indorser in that a time is there fixed for performance and an estate may be kept open until liability thereon may be determined. If duringthe time limited for presenting claims the bank had remained solvent, would the duty have been imposed upon the officials of the bank to file a contingent claim against the estate of the deceased for assessment which might be made at some time in the future? We think not; and are of the opinion that when the stockholder dies before the assessment is made the obligation then becomes that of his estate and should be treated the same as any other indebtedness which matures after his death.

When the executor qualified, the assets of the deceased passed into his hands and among them were the certificates of stock in the American Home Security Bank. When he had notice of the assessment, as it clearly appears that he had, it was his duty to satisfy himself that it was a legal charge against the estate and, if he determined that it was, then to make payment of it and list it among the disbursements made by him.

The injustice of holding otherwise is well illustrated by the facts here presented. As before stated, this bank closed on February 12, 1933, by order of the Governor. We may take judicial notice of the fact that this order applied to all of the banks in the state and was not in itself an evidence of the bank's insolvency. In March following, a conservator thereof was appointed by the banking commissioner under the provision therefor in sections 4 and 5 of Act No. 32, Pub. Acts 1933. It seems clear that such an appointment is provided for in the hope, if not the expectation, that its solvency may bemaintained. This is evidenced by the provision in the next section that, in case the commissioner...