Wilson v. The First State Bank of Jetmore

• Decision Date: 11 April 1908
• Docket Number: 15,326
• Citation: 77 Kan. 589,95 P. 404
• Parties: T. C. WILSON v. THE FIRST STATE BANK OF JETMORE
• Court: Kansas Supreme Court

95 P. 404

77 Kan. 589

T. C. WILSON v. THE FIRST STATE BANK OF JETMORE

No. 15,326

Supreme Court of Kansas

April 11, 1908

Decided January, 1908.

Error from Hodgeman district court; WINFIELD H. SHELDON, judge pro tem.

Judgment affirmed.

SYLLABUS

SYLLABUS BY THE COURT.

BANKS AND BANKING--Voluntary Liquidation--Failure to Make Financial Reports--"Doing Business"--Power to Sue as a Corporation. In 1892 the First State Bank of Jetmore was chartered for all the purposes then permitted by law to banking corporations. It commenced business and continued to operate as a banking corporation until 1897. It then went into voluntary liquidation, paid off its depositors, surrendered to the bank commissioner the certificate of authority to transact business which it had obtained from him, and ceased to transact any business except to collect what it could of the debts owing to it and to distribute the proceeds among its stockholders by way of closing up its affairs. In 1905 it brought a suit upon a promissory note given to it in 1896. Held: (1) The bank continued to be a banking corporation after the steps taken in 1897, as before. (2) The period for which the bank was chartered not having expired, no forfeiture having been suffered, and no judgment of dissolution having been rendered against it, the corporation is still in existence. (3) The bank had capacity to sue as a banking corporation when the action referred to was instituted. (4) After the bank had paid its depositors and had surrendered its certificate of authority to do business it was no longer subject to the provisions of the banking act requiring reports of its financial condition to be made to the bank commissioner. (5) After the steps taken in 1897 the bank was not "doing business" within the meaning of section 1283 of the General Statutes of 1901, requiring financial statements to be filed with the secretary of state as a condition precedent to the maintenance of an action or the recovery of a judgment. (6) The bringing of the suit referred to did not constitute "doing business" within the meaning of the statute just cited.

F Dumont Smith, for plaintiff in error.

T. F. Garver, and R. D. Garver, for defendant in error.

OPINION

BURCH, J.:

The First State Bank of Jetmore obtained a judgment against T. C. Wilson upon a promissory note, dated August 28, 1896, and given to the bank by a partnership of which Wilson was a member. The validity of this judgment depends upon the following facts found by the district court:

"(1) That the First State Bank of Jetmore, plaintiff in this action, obtained a charter from the secretary of the state of Kansas, April 19, 1892; that its place of business was Jetmore, Hodgeman county, Kansas, the purpose of the corporation being that of receiving money on deposits and to allow interest thereon, giving to the person depositing credit therefor, and buying and selling exchange, gold, silver, foreign coin, bullion, current money, bonds of the United States and state of Kansas, bonds and warrants of cities, counties and school districts in the state of Kansas, of loaning money on real estate, chattel and personal security at a rate of interest not exceeding the legal rate allowed by law, of discounting negotiable notes and notes not negotiable, and to own a suitable building, furniture and fixtures for the transaction of its business of the value not to exceed one-third of the capital of such bank, which was fixed at $ 10,000, divided into shares of $ 100 each--the duration of such banking corporation as fixed in said charter being twenty-five years; that it commenced business as such banking corporation in 1892, and continued to operate under said charter as a banking corporation until 1897.

"(2) In February, 1897, it voluntarily proceeded to liquidate and wind up its affairs as a bank, and on December 7, 1897, there was filed in the office of the bank commissioner of the state of Kansas an official statement showing the financial condition of said bank at the close of business November 29, 1897, and said bank surrendered to the bank commissioner of the state of Kansas its certificate to transact business as a bank that had been issued to it by the bank commissioner January 4, 1892.

"(3) Since December 7, 1897, it has not made any reports to the bank commissioner of the state of Kansas or to the secretary of state regarding its condition, and no requests have been made upon the officers of said corporation for a report as to the condition of the affairs of said corporation.

"(4) After said bank commenced to liquidate, in February, 1897, it did not receive deposits, and before December 7, 1897, it had paid all of its depositors in full, and since November 17, 1897, it has never received deposits or paid out money on deposits or renewed any notes--in fact has not transacted any business as a bank, and since that time C. E. Wilson, who was then cashier of said bank, has transacted what business has been transacted--that is, collected such of the indebtedness due the bank as he could, and paid the proceeds so collected to the stockholders of the corporation in closing up the affairs of the bank."

The questions argued relate to the corporate character and existence of the plaintiff, to its capacity to bring suit, and to its right to sue without rendering statements respecting its financial condition either to the bank commissioner or to the secretary of state.

The only way to determine the class to which a corporation belongs is to look at its charter. The very purpose of that document is to establish the nature and character of the corporation and to fix its constitution as an organization for manufacturing, for banking, or for some other defined purpose; and so long as its charter stands unrevoked and unmodified the intrinsic nature and character of the corporation remains unchanged. Reading the plaintiff's charter as epitomized in finding No. 1 with the banking act in force when the charter was granted (Laws 1891, ch. 43), it is plain that the plaintiff organized as, and actually became, a banking corporation and nothing else. So far as the findings of fact disclose, this charter has never been amended, and if the corporation is still in existence it is still a banking corporation.

At the time the plaintiff organized, and ever since, there have been but three ways in which the corporate existence of a banking corporation might be terminated--by expiration of the period for which it was chartered, by a judgment of dissolution in voluntary proceedings to that end, and by forfeiture and judgment of dissolution in an adversary proceeding. None of these things has occurred, and the plaintiff is still a banking corporation.

Although organized and in existence from the date its charter is filed (Laws 1891, ch. 43, § 3; Laws 1897, ch. 47, § 3; Gen. Stat. 1901, § 409; The State v....