Shekell v. Ypsilanti Sav. Bank

• Decision Date: 04 June 1934
• Docket Number: No. 123.,123.
• Parties: SHEKELL v. YPSILANTI SAVINGS BANK.
• Court: Michigan Supreme Court

267 Mich. 114

255 N.W. 172

SHEKELL

v.YPSILANTI SAVINGS BANK.

No. 123.

Supreme Court of Michigan.

June 4, 1934.

Appeal from Circuit Court, Washtenaw County; George W. Sample, Judge.

Action by Ernest Shekell against the Yysilanti Savings Bank, a corporation. Judgment for defendant, and plaintiff appeals.

Judgment set aside and cause remanded, with directions to enter judgment for plaintiff.

Argued before the Netire Bench.

Carl H. Stuhrberg, of Ann Arbor, for appellant.

John P. Kirk, of Ypsilanti, for appellee.

EDWARD M. SHARPE, Justice.

During August and October, 1930, plaintiff deposited $1,600 with defendant bank and received in return three certificates of deposit payable to plaintiff upon demand with interest at 3 per cent. per annum if left three months or 4 per cent. per annum if left six months.

On July 24, 1931, the defendant bank was placed in the hands of a receiver and so continued until December 23, 1931. During this interval of time, efforts were being made to reopen the bank. A reopening was finally made possible by the signing of a depositors' agreement by 96 per cent. of the depositors. Thereupon the defendant bank filed a petition to have the receivership terminated. This action was taken under the authority of section 11960, Comp. Laws 1929, which reads as follows:

‘Whenever arrangements shall be made by any such bank or the stockholders thereof by re-organization or otherwise, to the satisfaction of the commissioner of the banking department, to apy all creditors thereof, aside from the stockholders, and to make good the impairment of the capital stock in all particulars, and to pay the expenses of the receivership, if any have accrued, such facts shall be presented to the court, and the court may order the property to be turned over to the bank or to such stockholders, and shall discharge the receiver.’

The reorganization of the bank was approved by the state banking commissioner and the receiver was discharged by court order of December 23, 1931. Plaintiff did not join in the depositors' agreement or any agreement to defer enforcement of his claim, and after the reorganization of the bank, made demand for the entire amount of his deposit. It is conceded that at the date of reorganization there was sufficient of moneys on hand to pay plaintiff's claim. Defendant bank refused to pay plaintiff any more than the percentage agreed to by the majority depositors. These dividends were accepted by plaintiff without waiving any rights he might have to the balance.

Plaintiff brought this suit for the balance of his deposit amounting with interest to $1,582.65. The trial court held that plaintiff was not entitled to a judgment, and plaintiff appeals.

The plaintiff claims that he has a contract obligation with the bank, and not having signed any depositors' agreement, the contract is in full force and effect and is not modified by any action that other depositors may have taken. Defendant claims that to pay plaintiff in full would result in an illegal preference among depositors in the same class.

In Bush v. Lien, 56 S. D. 270, 228 N. W. 372; Id., 57 S. D. 501, 234 N. W. 29, it was held that nonassenting creditors cannot be compelled to release their claim against stockholders when the reorganization agreement does not purport to include any settlement of stockholders' liability.

In the absence of statute or insolvency proceedings, compositions with creditors are binding only on those who assent. In Atlas Engine Works v. First National Bank, 50 Ind. App. 549, 97 N. E. 952, upholding a...