Second Nat. Bank of Nashua v. Old Guar. Sav. Bank of Nashua, 2359.

• Citation: 150 A. 737
• Decision Date: 15 May 1930
• Docket Number: No. 2359.,2359.
• Parties: SECOND NAT. BANK OF NASHUA v. OLD GUARANTY SAV. BANK OF NASHUA et al.
• Court: New Hampshire Supreme Court

150 A. 737

SECOND NAT. BANK OF NASHUA

v. OLD GUARANTY SAV. BANK OF NASHUA et al.

No. 2359.

Supreme Court of New Hampshire, Hillsborough.

May 15, 1930.

Petition for declaratory judgment by the Second National Bank of Nashua against the Old Guaranty Savings Bank of Nashua and others. Question transferred to Supreme Court without a ruling.

Case discharged.

Petition for a declaratory judgment under Laws 1929, c. 86. The plaintiff seeks a decree holding valid a contract between the plaintiff and defendant banks, providing for the sale by the latter to the plaintiff of all its assets for an agreed price and the plaintiff's assumption of all its liabilities. The contract contains a clause that the transfer of the assets shall be carried out in such manner as to fully protect the general depositors of the defendant bank and under a plan meeting the approval of the state bank commissioner, the other defendant.

The depositors of the guaranty fund of the defendant bank have voted unanimously in favor of the contract, and the parties have agreed that the specific questions upon which the validity of the contract depends are if a solvent guaranty savings bank may voluntarily liquidate its assets, go out of business, and surrender its charter. The questions were transferred without ruling by Sawyer, C. J.

Demond, Woodworth, Sulloway & Rogers and E. K. Woodworth, all of Concord, for plaintiff.

Ivory C. Eaton, of Nashua, for defendant bank.

Ralph W. Davis, Atty. Gen., and Winthrop Wadleigh, Asst. Atty. Gen., for the Bank Commissioner.

ALLEN, J.

One question transferred is, if a guaranty savings bank may surrender its charter, assuming its right to go out of business and liquidate its affairs. The question is wholly irrelevant to the merits of the petition, which seeks only to have the contract between the banks declared valid. If the defendant bank may cease to do business in the manner proposed, its continued existence or the requirements for terminating its existence are matters not raised by the litigation. The vote to surrender its charter may or may not be enough to effect a dissolution without further action through court decree or legislative acceptance of the surrender. But the right to cease business is not dependent upon the right to cease existence. This question is accordingly not answered.

Relative to a saving bank's right to go voluntarily out of business, the right of an ordinary business corporation to liquidate at its own instance, even upon only a majority vote of the stockholders, has been declared in the well-considered case of Bowditch v. Jackson Company, 76 N. H. 351, 82 A. 1014, Ann. Cas. 1913A, 366, L. R. A. 1917A, 1174. But the commissioner suggests that savings banks are affected with a public interest and that their business may not be liquidated unless it is for the public good. And he then suggests that only the Legislature may determine if it is for the public good until it has delegated to some authority the right to decide the question upon such tests and in such manner as it may prescribe.

It is difficult to see wherein there is a public interest which places a savings bank under public obligation to continue in business so long as it may be solvent and properly managed, once it has commenced business. No authority is cited for the proposition and no argument is advanced for it beyond its assertion. What is meant in saying that a savings bank is affected with a public interest is vague and indefinite. There is a public interest to have sayings banks successful, but that interest is no indication of public right to have them continue to do business while they remain successful. There is a public interest of the same nature in respect to all corporations. Whether generally or specially chartered, corporations are deemed to be in the public interest, from the authority given to incorporate and from the assistance in business, industrial, and social relations thought to be derived from corporate form, organization, and management.

In its promotion of economy and thrift, in its purpose of enabling persons of small means to have their savings well and profitably cared for, and for other reasons, a savings bank may be, and usually is, of more public importance than an ordinary business enterprise. But the difference is only of degree, and not of character, from the standpoint of the unwritten law. A savings bank is essentially a private undertaking. It is privately managed and privately owned, and it has no duty of public service.

Even when a corporation has some duty of public service, its right to liquidate has never been questioned when legislative restriction or its own undertaking does not bar it. Corporations engaged in the hotel, public conveyance, water service, gas service, and electric service business may be cited as examples.

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