Springhorn v. Dirks
| Decision Date | 23 December 1924 |
| Docket Number | 5551. |
| Citation | 231 P. 912,72 Mont. 121 |
| Parties | SPRINGHORN v. DIRKS et al. |
| Court | Montana Supreme Court |
Appeal from District Court, Cascade County; H. H. Ewing, Judge.
Action by A. W. Springhorn, as receiver of the American Bank & Trust Company of Great Falls, against A. B. Dirks, George H Hagenson, administrator of the estate of John F. Hagenson deceased, and others. Judgment for plaintiff, and defendants appeal. Affirmed.
Freeman Thelen & Frary, J. A. McDonough, A. H. Gray, J. W. Speer, and McKenzie & McKenzie, all of Great Falls, for appellants.
Norris Hurd & Rhoades and H. C. Hall, all of Great Falls, for respondent.
JACKSON District Judge, sitting in place of Mr. Chief Justice CALLAWAY, disqualified, delivered the opinion of the court.
The American Bank & Trust Company, a state banking institution, with its place of business at Great Falls, Mont., and a capitalization of $225,000, divided into 2,250 shares of stock, each $100, failed to open for business on December 3, 1921, and has since remained closed. All the defendants, except those appearing as administrators, were on that date stockholders in various amounts. On January 6, 1922, the Attorney General filed a petition in the district court of Cascade county, praying that a receiver be appointed for the bank. On January 7 the court appointed, upon nomination of the superintendent of banks, Mr. A. W. Springhorn as such receiver. On June 7, 1923, the receiver filed his petition in the district court of Cascade county, requesting, among other things, and giving reasons therefor, that the court make an order directing an assessment and collection from all stockholders of their full statutory liability. On the same day the court levied an assessment on all of the stockholders of the bank to their full statutory liability, and ordered the receiver to collect by suit or otherwise. Thereafter, and prior to June 30, 1923, several of the stockholders voluntarily paid the amount assessed. Against those who refused payment this action was instituted and tried by the court sitting without a jury. At the hearing the complaint of the Attorney General praying for the appointment of a receiver, the order appointing plaintiff, the oath filed by him, the petition requesting the assessment, the order for the assessment, and notice of assessment sent by registered mail to each stockholder, were received in evidence over defendant's objections. The record then shows that no appeal was ever taken from either order, and that defendants had not paid the amounts assessed against them. The stock certificate book of the bank was received, showing stock certificates issued to all of the defendants for the respective amounts alleged in the complaint. This constituted plaintiff's evidence.
On behalf of the defendant Hagenson the order of publication of notice to creditors, the affidavit of publication, and the decree showing that due and legal notice to creditors was given, were placed in evidence, and it was agreed that no claim had ever been filed by the receiver in the Hagenson estate. The rest of defendant's evidence showed that there had been but one complaint filed by the Attorney General against the bank and that no process had issued thereon. Defendants' motion for nonsuit was denied, proposed findings submitted, and thereafter the court ordered judgment for the plaintiff, from which this appeal is taken.
A motion to dismiss the appeal of defendant Charles Gies on the ground that subsequent to the perfecting of his appeal he had paid the judgment in partial satisfaction, and promised to pay the balance, having been duly served and filed, and no objection appearing, is granted, and his appeal is dismissed.
Sixteen specifications of error are assigned, all of which may be disposed of in testing the sufficiency of the complaint and determining the nature of the cause, with the exception of two in which the defendant Hagenson is alone concerned.
The action was brought under chapter 9 of the Session Laws of 1923, which provides:
It is urged that the complaint does not state a cause of action, in that it does not allege that the bank was a party to the proceedings in which the plaintiff was appointed receiver, nor that the bank is being liquidated by the court, nor the amount of the debts of the bank, nor the indebtedness of the bank, nor that its insolvency has been judicially determined, nor are other facts alleged from which it appears that the court had jurisdiction to appoint the plaintiff or make the assessment, and also that it does not allege facts bringing it within the principles of Barth v. Pock, 51 Mont. 432, 155 P. 282.
The complaint sets forth that the receiver was appointed by an order duly given and made by the district court of the Eighth judicial district of the state of Montana, and that "on or about the 7th day of June, 1923, upon a proper proceeding before the district court of the Eighth judicial district of the state of Montana, in and for the county of Cascade, in the matter of the above receivership, the said court duly found, made and entered its order therein that it was necessary in order to pay the debts and the liabilities of said American Bank & Trust Company, that the full amount of the statutory iiability be collected from the stockholders of said bank and each thereof, a copy of which said order is hereto attached, marked Exhibit A, and by this reference made a part hereof." The order made a part of the complaint by reference shows on its face to have been made in the receivership proceedings, and discloses that the bank is a party defendant in the petition. That an exhibit may be considered as part of the pleadings needs no citation of authorities. Beyond any shadow of doubt the complaint shows the bank was a party to the receivership proceedings, and there is nothing in the record to suggest it did not appear voluntarily.
The objection that the complaint does not show that the bank is being liquidated by the court is utterly without merit. Outside the general receivership proceedings, in which court action and supervision are contemplated, there are two methods for the liquidation of a bank: (1) Through voluntary liquidation under supervision of the state banking department; and (2) through the appointment of a receiver in a court action brought by the Attorney General. The complaint clearly shows that this action is under the latter. No other construction can be had of the complaint together with the attached exhibits.
As to the insolvency of the bank, its indebtedness, liabilities, and the amount of the assessment, all were determined in the receivership proceedings, and, since no appeal has ever been taken therefrom, the correctness of the determination of the court may not be questioned herein. Section 10558, Rev. Codes 1921. The order is conclusive and binding on the stockholders. Howarth v. Lombard, 175 Mass. 570, 56 N.E. 888, 49 L. R. A. 301; Lynch v. Jacobsen, 55 Utah, 129, 184 P. 929; Hanson v. Soderberg, 105 Wash. 255, 177 P. 827.
There is certainly no allegation bringing this case within the principles of Barth v. Pock, supra, nor should there be. That was a suit brought by creditors for themselves and all other creditors against the stockholders of the State Savings Bank, and was no part of the receivership proceedings. The statute, chapter 9, Session Laws of 1923, undoubtedly was passed to avoid the necessity of a creditor's action. While this law was enacted subsequent to the failure of the American Bank & Trust Company, its nature is remedial, and does not concern any rights the defendants possessed. The stockholders have no vested right in any particular method or procedure or against the adoption of any new method for enforcing their liability. 12 C.J. 977; Moore v. Ripley, 106 Ga. 556, 32 S.E. 647; Persons v. Gardner, 42 A.D. 490, 56 N.Y.S. 822, 59 N.Y.S. 463; Henley v. Myers, 215 U.S. 373, 30 S.Ct. 148, 54 L.Ed. 240. The complaint is proof against the objections urged.
The trial court held that this action is in equity, and with it we must agree. The record shows there was not a single question of fact for decision by a court or jury. The matters raised by defendants were entirely questions of law. In a situation of this character we fail to see where any "right to trial by jury" was lost. Our statute, chapter 9, supra, constitutes the receiver "the representative and quasi assignee of the creditors of the bank." Corwin v. Settergren, 70 Mont. ---, 226 P. 522.
This action is for the recovery of money for the benefit of all creditors, and the stockholders' liability is in the nature of a trust fund. Bailey v. Tillinghast, 99 F. 801, 40 C. C. A. 93. In Alsop v. Conway, 188 F. 568, 575, 110 C. C. A. 366, 373, it is said:
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