State v. Bank of Conception

• Decision Date: 03 November 1913
• Citation: 174 Mo. App. 589,163 S.W. 945
• Parties: STATE ex rel. LYONS v. BANK OF CONCEPTION.
• Court: Missouri Court of Appeals

163 S.W. 945

174 Mo. App. 589

STATE ex rel. LYONS v. BANK OF CONCEPTION.

Kansas City Court of Appeals. Missouri.

November 3, 1913.

On Motion for Rehearing, December 1, 1913.

1. MANDAMUS (§ 1)—NATURE OF REMEDY.

Mandamus is a legal remedy, the office of which is to execute and not to adjudicate nor to ascertain and adjust mutual claims or rights between the parties, and hence is not a writ of right to which relator is entitled without regard to the circumstances under which he demands its use.

2. MANDAMUS (§ 7) — ISSUANCE OF WRIT — DISCRETION.

Whether mandamus should be granted or refused lies in the judicial discretion of the court applied to the situation before it and governed by established principles of law; the right being applied only in unusual cases when there is no other adequate remedy.

3. MANDAMUS (§ 3)—RIGHT TO WRIT—EQUITABLE REMEDY.

While the existence of an adequate remedy will not deprive the court of jurisdiction to issue mandamus, yet it is an influential factor in the determination of the question whether the writ shall issue, and if an equitable proceeding will cover the entire subject in dispute, and the court in such case can grant general as well as special relief, the writ will be denied.

4. MANDAMUS (§ 124) — RIGHT TO WRIT — STOCKHOLDER IN BANK.

Relator held three shares of stock in a bank which was hopelessly insolvent, and the State Bank Examiner would not permit it to be reopened unless it was put on a solvent basis. Not only was its capital wiped out, but there were $30,000 of worthless and doubtful notes due the bank, and $15,000 cash was also required to satisfy the bank's creditors. Certain of the stockholders, other than relator, executed a bond guaranteeing $30,000 of the insolvent notes, and an assessment of $200 a share was levied on the stock, which paid off the rest of the claims against the bank and put it on a sound financial basis. All the stockholders, but relator, paid the assessment or voluntarily surrendered their stock, and in lieu thereof other stock of the par value of $100 a share was issued to other persons who paid the required assessment of $200 a share. Relator, however, refused either to pay the assessment or surrender his stock. Held that, though he might have certain rights as a stockholder, he was not entitled to mandamus to compel the bank to recognize him as a stockholder and to restore his name to the stock records as the holder of three shares of the bank's stock of a par value of $100 per share.

Appeal from Circuit Court, Nodaway County; Wm. C. Ellison, Judge.

Mandamus by the State, on relation of Francis Lyons, against the Bank of Conception. From an order denying a peremptory writ, relator appeals. Affirmed.

J. C. Growney, of St. Joseph, for appellant. Cook, Cummins & Dawson, of Maryville, for respondent.

TRIMBLE, J.

This is a proceeding in mandamus brought by relator to compel the Bank of Conception to acknowledge and treat him as a stockholder in said bank, to restore his name on the stock book and records thereof as a stockholder owning three shares of its capital stock of the par value of $100 per share, and to do such other act or acts as may be needful and necessary to fully and completely restore said relator to all the privileges, rights, and benefits of a stockholder in said corporation. Upon the issuance and service of the alternative writ, the bank appeared and filed, finally, a second amended return, to which relator replied, and upon these, the alternative writ, the second amended return, and the reply, the case went to trial. The court, after hearing the evidence, declined to issue the peremptory writ, and relator appealed.

There is practically no dispute over the material facts. The bank was a corporation with a capital stock of $15,000 comprising 150 shares of the par value of $100 each; and relator was a young man 20 years of age who owned three of such shares which he had received as a gift from his father. In April, 1907, the bank became hopelessly insolvent, and was declared so by the State Bank Examiner, who took charge of it and ordered it closed and would not permit it to be reopened unless it was put on a solvent basis. The condition of the bank was so deplorable that not only was its capital stock completely wiped out, but, in addition to this, there were $30,000 of worthless or doubtful notes due the bank, and even if these were made good it would still require $15,000 cash to pay the claims of creditors. It was the only bank in the village, and it was a matter of much local interest and concern to have the bank reopen and continue if possible. For this and other reasons, all the stockholders, except relator, as well as a large number of the depositors, were anxious to find some plan by which the bank could be preserved as a going concern. Thereupon, with the approval of the Bank Examiner, certain of the stockholders agreed to execute a bond guaranteeing $30,000 of the insolvent notes, and it was also arranged that an assessment of $200 should be made on each share of stock, thereby raising a cash fund of $30,000 which would replace the capital stock, pay off the rest of the claims against the bank, and put it in sound financial condition. All the stockholders, except relator, agreed to this plan and either paid the assessment of $200 per share, or voluntarily surrendered their stock, which was worthless, and in lieu thereof other stock of the par value of $100 a share was issued to other persons who paid the required assessment of $200 per share. But, when relator was informed of the plan and asked to contribute $200 on each of his three shares, he refused to do so. And, when told that if he would surrender his shares, as others had done who could not pay the assessment, other persons, in order to save the bank, would take his place as a stockholder and pay in the $600 required of him, he declined to do that also. One of the stockholders, in order to have the plan of reorganization go through, then offered to buy relator's shares; but this was likewise refused. Not being able to induce relator to either pay his part in the rehabilitation of the bank or to get out of the way so that others could do so, and thereby save the bank, relator's stock was canceled, and other stock of like amount was issued to others who paid the $600 assessment thereon. The bank then reopened and has continued doing business ever since. Of the $30,000 bond given to guarantee the insolvent notes, the bondsmen have paid $28,000, and none of said insolvent notes have been collected. About $13,000 of notes classed as doubtful have been paid by the debtors, but this fact does not render the old stock in the bank at the time of the failure of any value, since the amount paid is less than the deficit remaining after taking out the capital stock and guaranteeing the $30,000 worth of insolvent notes at their face value.

After the bank reopened and was doing a prosperous business, relator demanded recognition as a stockholder. The bank refused to accord this to him, although, prior to the reorganization, full opportunity was given relator to examine the books and assets of the bank in order that he might determine for himself whether or not it was insolvent. Upon being denied recognition as a stockholder in the reopened bank, relator brought this suit in mandamus to compel the bank to accept and treat him as such "and to do such other act or acts as might be needful and necessary to fully and completely restore relator to all the privileges, rights, and benefits of a stockholder" because of the certificate of three shares owned and held by him.

As stated before, the trial court, after hearing the evidence, refused to issue the peremptory writ, and we are asked to review its action in that regard.

It will be observed that the question for our consideration is not whether mandamus is a proper remedy for a stockholder to invoke under ordinary circumstances where he is being denied his rights in the corporation to which he claims to belong, and in which the issuance of the peremptory writ will affect only relator and the respondent. The question is: Was the trial court, under the peculiar circumstances of this case, compelled by the rules of sound judicial discretion to grant the peremptory writ? If not, then the court's action in refusing the writ ought not to be reversed. Was its refusal within the bounds of sound judicial discretion?

Mandamus is a legal and not an equitable remedy. 26 Cyc. 141; Merrill on Mandamus, § 3. Of necessity it is a stern, harsh writ, and, when issued, is an unreasoning, inflexible, peremptory command to do a particular thing therein specified without condition, limitation, or terms of any kind. Its office is to execute, not to adjudicate; nor can it ascertain or adjust mutual claims or rights between the parties. Being of such a nature, it is not a writ of right to which relator is entitled without regard to the circumstances under which he is demanding its use. Whether it shall be granted or refused rests in the judicial discretion of the court applied to the situation before it and governed by certain established principles and rules of law. The writ is employed only in unusual cases where other remedies fail; the relator must in all cases substantially demonstrate not only the propriety but the justice of his case; the court is not bound to take the case as relator presents it, but may consider defendant's rights, the interest of third persons, the importance or unimportance of the case, and the applicant's conduct in determining whether or not the writ shall go. 26 Cyc. 144. In some cases it is held that, even where a clear prima facie right to the writ is shown, it may be refused. 26 Cyc. 145; State ex rel. v. Bridge Co., 206 Mo. 74, loc. cit. 134, 103 S. W. 1052; Merrill on Mandamus, § 62; People v. Rock Island, 215 Ill. 488, 74 N. E. 437, 106 Am. St. Rep. 179. It should not issue to compel a...