Schwenker v. Bekkedal

Decision Date12 May 1931
PartiesSCHWENKER, COMMISSIONER OF BANKING, v. BEKKEDAL ET AL.
CourtWisconsin Supreme Court

OPINION TEXT STARTS HERE

Appeal from a judgment of the Circuit Court for Bayfield County; G. N. Risjord, Circuit Judge.

Affirmed.

Action by commissioner of banking to recover stockholders'XHN

Action by commissioner of banking to recover stockholders' superadded statutory liability, commenced January 13, 1926; judgment for plaintiff entered May 29, 1929. Defendants Bekkedal, Leihy, and Black appeal.

The plaintiff, as commissioner of banking in charge of the liquidation of the Farmers' & Merchants' Bank of Bayfield, brought separate actions against various stockholders to recover as their statutory stockholders' liability an amount equal to the full par value of their stock. Several such actions went to judgment for the full amount demanded. Such actions were brought against defendants Bekkedal and Charles R. Leihy, since deceased, of whose will the defendant Belle Leihy is executrix. Bekkedal demurred to the complaint for defect of parties on the specific ground that all stockholders should have been brought into one suit. On Leihy's action being called for trial he demurred ore tenus on the same ground, and the two demurrers were heard together. The court sustained the demurrers. Two years afterward the plaintiff served an amended complaint in the Bekkedal action, bringing Leihy, Black, and all other stockholders who had not paid or had separate judgments entered against them, and judgment was rendered for recovery from each of the several defendants, except Moen and Leihy, who claimed offsets, for an amount equal to the par value of his stock. At the time the judgment was entered, the liquidation proceedings had progressed so far that it appeared conclusively that the total claims filed amounted to $23,972.27 and that the total amount realized from assets was $17,130.34, making the difference between debts and assets $6,841.93. The expenses of liquidation up to that time were $2,871.23. Bekkedal owned (if any) 8 per cent. and Black and Leihy each 4 per cent. of the bank's stock. Bekkedal claims that he never subscribed for or accepted or owned any stock of the bank, but the court found against him, and judgment went against him for the full par value of his stock; Leihy was allowed an offset for $192.56, and judgment went against her for the full par value of her stock less that sum; Black had voluntarily paid 50 per cent. of the par value of his stock, and judgment went against him for the remaining 50 per cent. While the trial court gave judgmentas stated, it concluded that the extent of the superadded statutory liability to which the stockholders are finally subject is not the full par value of the stock held, but such proportion of the deficit made up of the difference between the assets and the debts plus expenses of administration as the stock of the stockholder bears to the total stock of the bank outstanding, and found that such deficit in the instant case would not exceed $10,000. On this basis the limit of the amounts to which the appealing parties will finally be subjected will be Bekkedal $800, and Leihy and Black $400 each, which would make the judgments of Bekkedal and Leihy $800 and $207.44, respectively, and leave Black entitled to a refund of $100 unless barred from refund because the $500 he paid was paid voluntarily or under a mistake of law, if that limit fixes the amount of the judgments.

C. W. Graves, of Viroqua (Goggins, Brazeau & Graves, of Wisconsin Rapids, of counsel), for appellant Bekkedal.

John J. Fisher, of Bayfield, for appellants Leihy and Black.

Walsh & Morris, of Washburn, and William F. Morris, of De Pere, for respondent.

FOWLER, J.

The appellant Bekkedal claims that the court erred: (1) In finding that he owned stock of the bank; (2) in holding that the suits against the individual stockholders did not waive recovery of the superadded statutory liability of defendants herein; (3) in concluding that expense of liquidation should be included in making up the deficit for which the stockholders are finally liable; (4) in entering judgment, if he is held to own stock, for a greater sum than that computed by taking such proportion of the deficit as his stock bears to the total stock of the bank. The other appellants make identical claims, except as to (1). We shall first consider the identical claims of appellants, and it seems more orderly to consider them in the reverse order in which they are above stated.

[1][2][3][4] (4) It does not appear whether the respondent accepts as correct the conclusion of the trial court that the superadded liability of an individual stockholder of a bank is not, as we believe it is generally understood to be, an amount equal to the par value of his stock, but such proportion of the difference between the total amounts of debts plus expenses of liquidation and the total amount realized from the assets as his stock bears to the total stock of the bank outstanding. The brief of respondent does not take issue with that conclusion. But as the claim of appellants that the judgments are excessive is based upon the conclusion of the trial court in that respect, we must determine whether the conclusion is correct.

The conclusion of the trial court is based upon the language of the statute, section 221.42, which reads: “The stockholders of every bank shall be individually liable, equally and ratably, not one for another, for the benefit of creditors of said bank to the amount of their stock at the par value thereof, in addition to the amount invested in said stock.”

The language “equally and ratably, not one for another,” first appears in section 39, subc. 2, c. 234, Laws of 1903. Theretofore the statute, section 2024, subsec. 47, Stats. of 1898, read that the stockholders should be “individually responsible to the amount of their respective share or shares of stock for all its indebtedness and liabilities of every kind.” This was the language of the statute when Rehbein v. Rahr, 109 Wis. 136, 85 N. W. 315, the last decision of the court upon the point of stockholders' liability, was decided, which held that such liability extended, up to the par value of the stockholders' shares, to the full amount of all debts of the bank.

The words “equally and ratably, not one for another,” in the present statute, were manifestly taken from the National Bank Act, Revised Stat. U. S. § 5151 (12 USCA § 63). The words quoted were construed by the United States Supreme Court in U. S. ex rel. Citizens' Nat. Bank v. Knox, 102 U. S. 422, 26 L. Ed. 216, to mean as appellants contend and the trial court concluded. The opinion in the Knox Case, states, page 425 of 102 U. S., that to fix the amount of a stockholder's liability it is necessary to ascertain (1) the total par value of all stock held by all stockholders; (2) the amount of the deficit; (3) and then hold the stockholder for such proportion of the deficit as his stock bears to the total stock held by all stockholders. It is there further stated that “the insolvency of one stockholder, or his being beyond the jurisdiction of the court, does not in any wise affect the liability of another.” By a familiar rule of construction, in taking over the statute the Legislature took it with the meaning given to it by the United States Supreme Court before its enactment. But if it be not literally true that the 1903 provision was taken from the National Bank Act its language must be construed as the United States Supreme Court construed it. It permits of no other construction taking it by itself. And if the language was not taken from the United States statute, it was doubtless taken from the statute of some other state, and the courts of all states having a statute with such language that have construed it have construed it as did the United States Supreme Court. In re Hollister, 27 N. Y. 393, 84 Am. Dec. 292;Coyle v. Tanton Safe Deposit & Trust Co., 216 Mass. 156, 103 N. E. 288, 290;Gamewell Fire Alarm T. Co. v. Fire & Police T. Co., 116 Ky. 759, 76 S. W. 862, 866;Maine Trust & B. Co. v. Southern Loan & T. Co., 92 Me. 444, 43 A. 24, 26. Similar language is construed the same in Crease v. Babcock, 10 Metc. (Mass.) 525, 555, and Wiswell v. Starr, 48 Me. 401.

The statute being construed as above, it is manifest that the amount for which any stockholder is finally liable cannot be ascertained until the bank's affairs are finally wound up or at least have progressed far enough so that all the assets are reduced to cash, as until then the deficit for which the stockholders are liable cannot be ascertained. It is the contention of appellants that the commissioner cannot collect of the stockholders more than this amount and that he should in the first instance enforce payment of a sum based upon a reasonable estimate of the deficit eventually to result, and finally, if this amount prove insufficient, enforce such additional payment as may be required. This at first blush would seem to be correct. But consideration of the whole statute as it now stands and the results likely to follow from such course seem to us to lead to the conclusion reached by the trial court that the commissioner may collect, in the first instance, the full par value from the stockholder.

The latter part of section 221.42, added by amendment, enacted in 1915 (Laws 1915, c. 168), provides that “such liability [stockholders' super-added liability] shall accrue and become due and payable as to the stockholders of any bank forthwith, upon the commissioner of banking taking possession of the property and...

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9 cases
  • Cleary v. Brokaw
    • United States
    • Wisconsin Supreme Court
    • April 6, 1937
    ...in U. S. ex rel. Citizens' National Bank v. Knox, 102 U.S. 422, 26 L.Ed. 216, prior to its adoption in this state. In Schwenker v. Bekkedal, 204 Wis. 546, 236 N.W. 581, 582, such borrowing was recognized. In that case it was, among other things, said: “The opinion in the Knox Case, states a......
  • Kingston v. Old Nat. Bank of Centralia
    • United States
    • Illinois Supreme Court
    • February 12, 1935
    ...of contract as provided by sections 2 and 14 of article 2 of the Illinois Constitution, the defendant cites Schwenker v. Bekkedal, 204 Wis. 546, 236 N. W. 581, 582. That case was decided in 1931. The question was not raised in that case as to the effect of the amendment on the liability of ......
  • Murfey, Blossom & Co. v. State ex rel. Fulton
    • United States
    • Ohio Court of Appeals
    • December 23, 1935
    ...§ 221.42, the stockholders' liability is several, not joint, and they may be proceeded against in separate actions. Schwenker v. Bekkedal, 204 Wis. 546, 236 N.W. 581, and under this case the right of trial by jury was accorded to the defendant, although the suit was permitted against all of......
  • Kreutzer v. Gallagher
    • United States
    • Wisconsin Supreme Court
    • November 9, 1938
    ...and amended by chapter 168, Laws of 1915, has now provided that the liability may be enforced by an action at law (Schwenker v. Bekkedal, 204 Wis. 546, 236 N.W. 581), and the liability accrues when the commission takes over the affairs of the bank. ***” [2] It is claimed that all of these m......
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