Smith v. Goldsmith

• Decision Date: 12 March 1926
• Docket Number: No. 6081aC.,6081aC.
• Citation: 50 S.D. 1,207 N.W. 977
• Parties: SMITH, State Superintendent of Banks, v. GOLDSMITH.
• Court: South Dakota Supreme Court

50 S.D. 1

207 N.W. 977

SMITH, State Superintendent of Banks,

v.GOLDSMITH.

No. 6081aC.

Supreme Court of South Dakota.

March 12, 1926.

Appeal from Circuit Court, McCook County; L. L. Fleeger, Judge.

Action by Fred R. Smith, as State Superintendent of Banks, against Lucille Goldsmith. From a judgment for plaintiff and an order denying motion for new trial, defendant appeals. Affirmed.Bailey & Voorhees and M. T. Woods, Jr., all of Sioux Falls, for appellant.

C. H. McCay, of Salem, and Parliman & Parliman, of Sioux Falls, for respondent.

CAMPBELL, J.

The Commercial State Bank of Salem was closed and placed in the hands of the state superintendent of banks on April 24, 1924, and thereafter and on October 3, 1924, the superintendent of banks, having determined that the bank was hopelessly insolvent and that its liabilities exceeded its assets by much more than the capital stock, brought this action against defendant, who was the owner of 25 shares of stock in said bank of the par value of $2,500, to enforce her liability as such stockholder under section 3, art. 18, Constitution of South Dakota, and section 8993, Code 1919, in the amount of $2,500. Findings, conclusions, and judgment were for the plaintiff, and from the judgment and order denying her motion for new trial defendant appeals.

The sole question presented by the record for determination upon this appeal is whether appellant makes out a defense to respondent's cause of action by the existence of the following facts shown at the trial, namely: That appellant on and prior to May 26, 1921, was a stockholder of said bank owning the same 25 shares of stock which have ever since been held and owned by her. On May 26, 1921, the deputy superintendent of banks of the state of South Dakota wrote to the Commercial State Bank of Salem, making certain objections to the report of the examination of the bank as of April 5, 1921, and setting out a list of certain notes, and stating that the report could not be approved until those notes were eliminated from the assets of the bank and certain other requirements complied with; the last paragraph of the letter being as follows:

“You are hereby directed to call a meeting of the directors of your bank and levy an assessment of 100 per cent. of your capital stock to be used to eliminate the above mentioned notes. You will please attend to this immediately and notify this office.”

Thereafter, and pursuant to the direction of that letter, the directors of the Salem bank levied a 100 per cent. assessment upon its capital stock; and thereupon respondent as a stockholder paid into the bank...