State ex rel. Davis v. Farmers' State Bank of Bayard

• Decision Date: 01 May 1925
• Docket Number: No. 24544.,24544.
• Citation: 113 Neb. 497,203 N.W. 629
• Parties: STATE EX REL. DAVIS, ATTY. GEN., v. FARMERS' STATE BANK OF BAYARD (WILLIAMS, INTERVENING CLAIMANT).
• Court: Nebraska Supreme Court

113 Neb. 497

203 N.W. 629

STATE EX REL. DAVIS, ATTY. GEN.,

v.FARMERS' STATE BANK OF BAYARD (WILLIAMS, INTERVENING CLAIMANT).

No. 24544.

Supreme Court of Nebraska.

May 1, 1925.

Syllabus by the Court.

The double liability of stockholders in a state bank, provided for in sections 4 and 7, art. 12, of the Constitution, cannot be enforced until the property of the bank has been exhausted, and the amount due thereon has been judicially determined. Bodie v. Pollock, 110 Neb. 844, 195 N. W. 457.

When a bank has become insolvent, a receiver appointed, the assets of the bank sold and applied, and the amount due on stockholders' liability judicially determined, the receiver of such bank may prosecute an action to recover same, under the supervision of the court. That part of the opinion in Hamilton Nat. Bank v. American Loan & Trust Co., 66 Neb. 67, 92 N. W. 189, which is in conflict herewith, is overruled.

“Where peculiar equities intervene between the parties, a court of equity may enjoin the collection of a judgment until the debtor litigates an unliquidated claim against his creditor, and if the debtor succeeds the court may set off the judgments so far as one may equal the other.” Wells v. Cochran, 88 Neb. 367, 129 N. W. 533, 35 L. R. A. (N. S.) 142.

Additional Syllabus by Editorial Staff.

Under Comp. St. 1922, § 8035, guaranty fund, on payment of creditor depositors, is subrogated to their rights to amount of payments.

Appeal from District Court, Morrill County; Barron, Judge.

Suit by the State, on the relation of Clarence A. Davis, Attorney General, against the Farmers' State Bank of Bayard, of which H. C. Peterson was appointed receiver; Thomas E. Williams intervening as claimant. From judgment for claimant, the state and receiver appeal. Reversed and remanded with directions.

See, also, 203 N. W. 572, and 203 N. W. 632.

T. F. Neighbors, of Bridgeport, and C. M. Skiles, of Lincoln, for Farmers' State Bank of Bayard and H. C. Peterson.

Hainer, Craft, Edgerton & Fraizer, of Aurora, and McDonald & Irwin, of Bridgeport, for appellee.

Heard before ROSE, DEAN, GOOD, THOMPSON, and EVANS, JJ., and REDICK and SHEPHERD, District Judges.

THOMPSON, J.

In this case, the record shows that on or about June 27, 1916, in Bayard, Morrill county, the Farmers' State Bank of Bayard was incorporated under the state banking laws, with a capital stock of $25,000. It continued to do a general banking business up and until February, 1922, when it became insolvent, and the department of trade and commerce took possession. Lawrence A. Fricke was duly appointed receiver thereof by the district court for such county, and he proceeded to wind up its affairs as by law provided. On or about February 18, 1924, the receiver applied to the court for an order directing him, as such, to sell all remaining assets of the bank, which order was granted, sale had, report made, which was in all things approved.

Williams, appellee herein, who will hereinafter be referred to as claimant, at the time of the organization of the bank, became the owner of 80 shares of the capital stock thereof, of the face value of $100 a share, and has been ever since the owner of such stock. He was also a depositor in such bank in due course, to the amount of $2,244.73 in cash. He presented a claim for this amount to the receiver for payment, which was not granted, and he then, by apt pleading, lodged his claim with the district court, praying that the same be allowed and judgment entered against such bank and ordered paid out of its funds in the hands of the receiver, if sufficient, and, if not, then out of the guaranty fund.

The state, through the receiver, answered, in substance, alleging the foregoing facts as to the history, condition, and the situation of the bank and its assets, and the ownership of the 80 shares of stock by claimant, the insolvency of the bank and of claimant, and that, owing to such condition, it will be necessary to enforce, as against each stockholder, the double liability imposed by the Constitution; that claimant assigned the claim to the receiver, to be applied on his stock liability; that the only property had or held by claimant out of which such stock liability can be satisfied is this claim which he seeks to have allowed; that he is also liable to the bank as indorser on two notes of $5,000 each. The answer prays, in substance, that, in the event the assignment referred to is held to be no bar to claimant's right to recovery, and it is found that under the present status of the trust the amount due claimant on the deposit cannot be offset against the amount owing by him on the stockholder's liability or indorsed notes, he be enjoined from collecting the amount due him until his stockholder's liability is judicially determined, and, on the final determination thereof, the one be offset against the other, and for other equitable relief.

The reply is, in substance, a general denial, with an allegation that the sale of the remaining assets does not in any way affect the rights of claimant, he being a general depositor.

The record further shows that the total liabilities to creditors found unpaid were nearly $200,000, with all assets exhausted, the stockholders' liability being the only remaining asset holden for the payment of creditors; that the deposits covered by the guaranty fund and paid out of it were about $125,000.

Trial was had to the court, judgment entered finding generally for claimant and against the state, and ordering the judgment paid by the receiver from the assets of the bank, if sufficient, and, if not, from the guaranty fund. To reverse this judgment, the state appeals, presenting as grounds for reversal:

That the court erred in not finding that claimant's assignment of his claim was valid; in not finding him holden as indorser on the $5,000 notes; in not offsetting the amount due from him on his stock liability; and in not enjoining the collection of the judgment until suit could be brought on the stockholders' liability, wherein all questions involved could be considered by the court, and the amount found due creditors thereon offset against such claims.

As to the assignment of the claim, the record discloses that claimant, from his close association with the management of the bank, was possessed of full knowledge of its condition at the time of such assignment, and before, and knew that the trust was without assets to meet its liabilities to its creditors, and that the stockholders would be called upon to pay the constitutional double liability; hence, when asked by the receiver, he voluntarily executed the assignment, in order to expedite the closing of the trust. While this was done without legal consideration running to him, it was in fact an indication of his view of what in good conscience he...