Ruden v. Heckenlaible, 7172

• Decision Date: 13 June 1932
• Docket Number: 7172
• Citation: 60 S.D. 62,243 N.W. 95
• Parties: E.A. RUDEN, Superintendent of Banks, Appellant, v. ANDREW HECKENLAIBLE, Respondent.
• Court: South Dakota Supreme Court

60 S.D. 62

243 N.W. 95

E.A. RUDEN, Superintendent of Banks, Appellant, v. ANDREW HECKENLAIBLE,

Respondent.

South Dakota Supreme Court

Appeal from Circuit Court, Brown County, SD

Hon. Howard Babcock, Judge

#7172—Reversed

Van Slyke & Agor, Aberdeen, SD

H.A. Doyle, Frank Biegelmeier, Yankton, SD

Attorneys for Appellant.

Williamson, Williamson & Smith, Aberdeen, SD

Attorneys for Respondent.

Opinion Filed Jun 13, 1932

POLLEY, Judge.

The defendant in this action was the owner of 8 2/3 shares of the capital stock of the Exchange State Bank of Menno, of the par value of $100 per share. About the 22d day of October, 1926, the bank levied an assessment of $100 per share on its capital stock, and on said date sent to defendant the following letter:

“The Board of Directors of the Exchange State Bank of Menno, S.D., of which you are a stockholder has levied an assessment of 100% against all the stock and your assessment amounts to $866.66, this is payable on the first of November, if not paid your stock will be sold for the assessment as other delinquent stock. Favor us with a draft of the above amount unless you want to assign your stock, send the assigned certificate.

“Yours very truly,

“E.W. Aisenbrey, Vice President.”

On the 29th day of said month defendant in reply to said letter wrote the bank as follows: “The letter of the 22 received stating that I should have a draft there or the assigned certificate by Nov. 1 to pay for the assessment made by the board of directors. ...”

With this letter defendant returned to the bank his certificate for 8 2/3 shares of stock, properly assigned in blank and executed, by himself in the presence of a witness. In reply to this letter the bank wrote defendant Exhibit 12, which reads as follows: “Your letter of Oct. 29th, with certificate of stock in Exchange State Bank endorsed in blank, which you voluntary surrendered instead of paying the assessment at hand. The notice was probably a little short in your case, and I do not think that it was intentional. My impression was that Mr. Aisenbrey had merely written to you what the Board had decided, but since you have sent in the stock, we are willing to give you a fair chance in the proposition. Namely, whoever will pay the assessment for you, and take over the stock, we will make an agreement that in event you will reimburse the party for the assessment, plus interest at 6% for the time he holds it, we will give you an option to take it back within next six months. Now this is more fair than you ever expected to get, and the assessment was not for the purpose of freezing out anyone, but for the best interest of the bank, and for your interest as well as all other stockholders or depositors. The fact that you may not look at it in that way will not change facts any, but time will tell without going into that phase of it now.”

The bank retained possession of the said certificate, and made no further attempt to collect the assessment, nor, so far as the record discloses, did the bank from then on give defendant notice of stockholders’ meetings or otherwise treat or recognize him as a stockholder of the bank, though it never canceled said certificate of stock nor transferred the same on the books of the bank.

On the 27th day of December, 1927, the bank, being insolvent, was taken over by the superintendent of banks for liquidation. The bank superintendent proceeded under the provisions of section 8993 to collect on the stockholder’s liability as provided by that section. Demand was made upon defendant for the face value of the 8 2/3 shares of stock standing in the name of defendant on the books of the bank. Defendant refused to pay, and this action was commenced. The case was tried to a jury. Verdict and judgment were for defendant, and plaintiff appeals.

Defendant contends that, after he assigned and delivered his stock certificate to the bank he was no longer a stockholder of the bank, and that he was not liable as a stockholder...