Simons v. Groesbeck, s. 137
| Decision Date | 18 September 1934 |
| Docket Number | 138.,Nos. 137,s. 137 |
| Citation | 268 Mich. 495,256 N.W. 496 |
| Parties | SIMONS et al. v. GROESBECK. BACKUS et al. v. CONNOLLY. |
| Court | Michigan Supreme Court |
OPINION TEXT STARTS HERE
Appeal from Circuit Court, Wayne County, in Chancery; Guy A. Miller, Judge.
Suits by Nathan Simons, individually and as one of the executors of the will and estate of David W. Simons, deceased, and another against Alexander J. Groesbeck, receiver of the Guardian Detroit Union Group, Inc., and by Henry N. Backus and others against William F. Connolly, receiver of the Detroit Bankers' Company, a corporation. Decrees for defendants, and plaintiffs appeal.
Affirmed.
Argued before the Entire Bench, except NELSON SHARPE, C. J., and FEAD and BUSHNELL, JJ.William Alfred Lucking and Lucking, Van Auken & Sprague, all of Detroit, for appellants.
A. W. Sempliner, of Detroit, for Alexander J. Groesbeck.
Wm. Henry Gallagher and A. W. Sempliner, both of Detroit, for William F. Connolly.
These suits involving substantially the same questions will be disposed of together. In one, plaintiffs, owners of the common stock of the Detroit Bankers' Company, a corporation organized under Act No. 84, Public Acts of Michigan of 1921, filed their bill of complaint against William F. Connolly, receiver of the Detroit Bankers' Company, alleging they are owners of the stock in the Detroit Bankers' Company. The certificates of stock held by plaintiffs recite: ‘This certificate and the shares of stock represented thereby, and the rights of the owner thereof, are subject to the provisions of those parts of the articles of association of this company, which appear on the reverse hereof.’
On the back of each certificate of stock is the following, quoted from the articles of association of the Detroit Bankers' Company:
‘(A) The holder of each share of common stock of this corporation shall be individually and severally liable for such stockholder's ratable and proportionate part (determined on the basis of their respective stockholdings of the total issued and outstanding stock of this corporation) for any statutory liability imposed upon this corporation by reason of its ownership of shares of the capital stock of any bank or trust company, and the stockholders of this company-by the acceptance of their certificates of stock of this company-severally agree that such liability may be enforced in the same manner and to the same extent as statutory liability may now or hereafter be enforceable against stockholders of banks or trust companies under the laws under which said banks or trust companies are organized or operate. A list of the stockholders of this company shall be filed with the banking commissioner of Michigan or the comptroller of the currency, whenever requested by either of those officers.
‘(B) The stock of the corporation authorized by these articles and any stock of this corporation authorized by any certificate of increase of the capital stock may be issued and disposed of by the board of directors to such persons, firms, corporations or associations in exchange for capital stock and/or assets of banks, trust companies or other corporations or associations included within the provisions of Article III and upon such terms as the board of directors in their discretion may determine. In any of such instances no holder of any stock of this corporation shall be entitled, as of right, to subscribe for, purchase or receive any proportionate or other share of stock so to be issued. In case, however, the board of directors shall determine to issue any stock of the corporation created by these articles or by any certificate of increase of the capital thereof, for any other purpose than exchange as aforesaid, the holders of common stock of this corporation shall first be entitled to subscribe for, purchase and receive such stock to be issued, ratably and at such price and upon such terms as may be fixed from time to time by the board of directors.
* * *
‘(D) No substantial part of the shares of the capital stock at any time owned by this corporation in any of the following named institutions:
Peoples Wayne County Bank
First National Bank in Detroit
Detroit and Security Trust Company
Bank of Michigan
shall be mortgaged, pledged or sold, nor shall consent be given to the mortgage, pledge or sale of the property or business of any of said institutions except by and with the vote of at least two-thirds of all of the outstanding shares of the common stock and until December 31, 1934-of a like proportion of the trustee stock. * * *'
By exchange of stock, the Detroit Bankers' Company acquired controlling interest in the capital stock of the First National Bank of Detroit, People's Wayne County Bank, Detroit & Security Trust Company, Bank of Michigan, Peninsular State Bank, and fourteen other banks. The First National Bank in Detroit, organized under the National Banking Act (12 USCA § 21 et seq.), was closed by proclamation of the President of the United States (No. 2039), March 6, 1933 (12 USCA § 95 note), and C. O. Thomas was appointed receiver therefor by the Comptroller of Currency May 12, 1933, and has since been acting as such. The National Banking Act provides:
12 USCA § 63. ‘The shareholders of every national banking association shall be held individually responsible, equally and ratably, and not one for another, for all contracts, debts, and engagements of such association, to the extent of the amount of their stock therein, at the par value thereof, in addition to the amount invested in such shares. * * *’
All of the stock of plaintiffs in the First National Bank-Detroit was transferred to the Detroit Bankers' Company more than 60 days prior to its being closed by presidential proclamation. The Detroit Bankers' Company May 10, 1933, was dissolved and William F. Connolly appointed receiver therefor. The trial court held that, upon his appointment as receiver of the Detroit Bankers' Company, defendant Connolly as such, became entitled to all the property and assets of the Detroit Bankers' Company; that the liability imposed upon the stockholders thereof by the provisions of its articles of association constituted an asset of the Detroit Bankers' Company; that the Detroit Bankers' Company became legally liable under the National Banking Act to the receiver of the First National Bank-Detroit, to an assessment of 100 per cent. of the par value of the capital stock of the First National Bank-Detroit held by it. It held substantially the same thing as to the liability of the Detroit Bankers' Company as the holder of the stock of the People's Wayne County Bank under the banking law of the state of Michigan, and that such liability was to be enforced by defendant Connolly, receiver of the Detroit Bankers' Company.
The other case involved similar questions growing out of alleged stockholders' liability in the Guardian Detroit Union Group, Inc.; the certificates of stock in which...
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...after all it is one fixed by statutory provision (McDonald v. Thompson, 184 U. S. 71, 22 S. Ct. 297, 46 L. Ed. 437;Simons v. Groesbeck, 268 Mich. 495, 256 N. W. 496), and cannot be nullified by contract (Petty v. Bay City Bank, 243 Mich. 362, 220 N. W. 704). Nor can this liability imposed b......
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