State v. Merchants' Bank of Lake City
| Decision Date | 21 April 1897 |
| Docket Number | 10,335-10,336-10,337-10,338--(12-13-14-15). [2] |
| Citation | 70 N.W. 803,67 Minn. 506 |
| Parties | STATE OF MINNESOTA v. MERCHANTS' BANK OF LAKE CITY and Others |
| Court | Minnesota Supreme Court |
Action by the state against the Merchants' Bank of Lake City to forfeit its charter. Herman B. Kennebeck intervened, and filed a cross complaint, bringing in the stockholders of the bank, for the purpose of enforcing their double liability. Josephine Rogers Sidle, Alice R. Rogers, individually and as executrix, and the Security Trust Company, as trustee defendant stockholders, demurred to the cross complaint on the ground that it did not state facts sufficient to constitute a cause of action against them, and from an order of the district court for Wabasha county, Gould, J overruling the demurrers, they appeal. Affirmed.
Order affirmed.
Douglas A. Fiske and John A. Young, for appellants.
The question whether a simple contract creditor can intervene in an action to annul a charter brought by the attorney general in behalf of the state under sections 12 and 13 of chapter 76, and make the stockholders parties defendant for the purpose of enforcing their liability, when no decree has been entered annulling the charter, is before the court for the first time.
G. S 1866, c. 76, §§ 12, 13, 14, 15, 16, are limited in their operation to moneyed corporations of the kind described in section 12. Minneapolis Paper Co. v. Swinburne, 66 Minn. 378, 69 N.W. 144; American S. & L. A. v Farmers' & M. S. B., 65 Minn. 139, 67 N.W. 800. These sections do not authorize the proceeding begun by the intervenor. Section 16 defines the remedy of a creditor to enforce the statutory liability of the stockholders, and makes the entry of a decree in the main action to annul the charter a condition precedent to such a proceeding. The statute having prescribed the terms upon which a creditor can intervene, those terms must be complied with, and the court cannot enlarge their scope. Sutherland, St. Const. § 238.
George H. Selover, for intervenor respondent.
The defendant bank is a corporation organized under the laws of this state. In February, 1895, the attorney general brought this action to have the bank's charter declared forfeited, and for the appointment of a receiver for it, alleging in his complaint, as a ground therefor, that the president of the bank was indebted to it in a specified sum, greatly in excess of 15 per cent. of the aggregate amount of its capital stock; that the public examiner demanded that it cause said indebtedness to be reduced down to said 15 per cent. limit; that said demand was never complied with, and after the lapse of 90 days thereafter the examiner made a demand in writing upon the attorney general to commence this action. G. S. 1894, §§ 2525, 2528.
At the commencement of the action the court, on the ex parte motion of the attorney general, appointed a receiver, and by a subsequent order confirmed this appointment. The receiver qualified and entered upon his duties. Thereupon, pursuant to G. S. 1894, § 5911, an order was made and published for creditors to exhibit their claims and become parties to the action. Claims were filed aggregating $ 140,000. Thereupon the intervenor, a creditor of the bank, with the consent of the attorney general and with leave of court, filed a cross bill, or complaint in intervention, alleging that the corporation is insolvent, and brought in the stockholders as defendants for the purpose of enforcing their statutory or double liability. Several of the stockholder defendants demurred to the cross bill on the ground that it does not state facts sufficient to constitute a cause of action against them. The demurrers were overruled, and they appeal.
1. Appellants' first point is that the action was brought by the attorney general, not under G. S. 1894, c. 76, but under section 2525, and that, the action not being brought under chapter 76, the provisions of that chapter for enforcing the stockholders' double liability do not apply, and do not authorize the injecting of a wholly new and different controversy into the action. The point is without merit. The action is as much and as fully authorized by sections 5900-5902, found in chapter 76, as it is by said section 2525.
2. Appellants' next point is that in an action brought by the attorney general, under said sections 5900-5902, to forfeit the charter of a bank, a creditor cannot, under the provisions of said chapter 76, proceed to enforce the stockholders' liability until after judgment in the action; and, as no judgment has yet been entered in this action, the demurrer should be sustained. The next two sections of chapter 76 read as follows:
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