Case Name: Delony v. Dillard
Court: Arkansas Supreme Court
Jurisdiction: Arkansas
Decision Date: 1922-02-27
Citations: 152 Ark. 159
Docket Number: 
Parties: Delony v. Dillard.
Judges: Mr. Justice "Wood concurs in these views.
Reporter: Arkansas Reports
Volume: 152
Pages: 159–167

Head Matter:
Delony v. Dillard.
Opinion delivered February 27, 1922.
1. Banks and banking — failure to file certificate. — Crawford & Moses’ Dig., § 1715, providing that the president and secretary of every domestic corporation shall file a certificate with the county clerk annually showing the condition of its affairs, was not, as far as banks are concerned, superseded by the banking act (Crawford & Moses’ Dig., §§ 665-728).
2. Banks and banking — duty of commissioner to sue officers of insolvent bank. — In view of banking act, (Crawford & Moses’ Dig., § 719), requiring the Bank Commissioner to take possession of all the property of an insolvent bank and collect all debts due it, a depositor of an insolvent bank was not authorized to sue its president and secretary for failure to file the certificate required by Crawford & Moses’ Dig., § 1715, until the Bank Commissioner has been requested to bring such suit, and has failed to do so.
Appeal from Howard Circuit Court; James S. Steel, Judge;
affirmed.
W. C. Rodgers, for appellant.
1. Repeals by implication are never favored. 112 Ark. 437; 92 Id. 600; 41 Id. 149. There is no such irreconcilable conflict between § 1715, C. & M. Digest, and the banking act of 1913, chap. 15, C. & M. Digest, as to justify holding the latter as having repealed the former by implication.
2. The liability of the president of a corporation for his failure to file the certificate required by law, is a personal liability upon implied contract. 68 Ark. 433. The right of a creditor to sue is the same whether the corporation is solvent or insolvent, and exists whether other creditors, having a like claim, wish to press their demands or not. The Bank Commissioner has not the sole right, nor indeed the right at all, to sue in such case. 91 Ark. 231; 112 Ark. 437; 58 Ark. 407.
W. P. Feazel, for appellee.
The banking act of March 3, 1913, repeals § 1715, C. & M. Digest, because it covers the entire field anew of banking corporations, and was intended to supersede tbe old statute requiring annual reports, 'so far as banking corporations are concerned. 68 Ark. 131; 118 Id. 375; 142 Id. 91; 76 Id. 32; 120 Id. 530; 92 Id. 79; 41 Id. 149; Creamery Package Mfq. Co. v. Wilhite, 149 Ark. 576.
2. If -a liability exists on the part of the appellee for failure to file the annual report required by § 1715, C. & M. Digest, it is a liability in favor of all the creditors of the bank whose debts were contracted during such neglect, and no one creditor has the hight to pursue the negligent officer and appropriate his property to the payment of his debt or judgment to the exclusion of other creditors. The Bank Commissioner alone is therefore authorized to bring the suit. Creamery Package Mfg. Co. v. Wilhite, 149 Ark. 576.

Opinion:
Humphreys, J.
This suit was instituted in the Howard Circuit Court by appellant, a depositor in the Bank of Mineral Springs, after it failed and was taken over by the State Bank Commissioner on the 27th day of May, 1921, against appellee, who was the former president of the bank, to recover $1,312.64 and interest, which represented his deposit in the bank at the time it failed, on the ground that appellee, as president of the bank, failed to file a certificate at the time and in the manner required by section 1715 of Crawford & Moses' Digest, showing the condition of the affairs of such bank. Appellee filed an answer, admitting that on the first day of September, 1920, the bank was indebted to appellant in the sum claimed on account of deposits theretofore made; that he was the president of the bank at the time and thereafter until it was taken over by the Bank Commissioner in May, 1921; that he did not file the certificate required by section 1715 of Crawford & Moses' Digest, but denied any liability by reason of his failure to do so, alleging, first, that said act was repealed by the banking act of this State which took effect January 1, 1914, (Crawford & Moses' Digest, § 665 to 728, inclusive), and, second, that if liable, the right of action passed to the Bank Commissioner alone for the benefit of all creditors who desired to prosecute the action when the bank became insolvent and was taken over by the Bank Commissioner.
The cause was submitted to the court, sitting as a jury, upon the pleadings and evidence, which resulted in a finding that appellant had no right to maintain the suit until the Bank Commissioner refused to bring the same, and in a judgment that the action abate without prejudice, from which finding and judgment is this appeal.
The record reveals that the Bank of Mineral Springs was organized under the laws of Arkansas prior to the year 1910. When organized, appellee became president, and continued to act in that capacity until the bank became insolvent and passed into the hands of the Bank Commissioner. He was acting in that capacity on the 1st day of January, 1920, when appellant first made a deposit in the bank. Neither appellant, as president, nor the secretary of the corporation filed a certificate showing the condition of the affairs of the bank on the first day of January or July of any year after January 1, 1920, in the manner' provided by section 1715 of Crawford & Moses' Digest. When the bank failed and passed into the hands of the Bank Commissioner in May, 1921, it owed appellant the amount claimed, as well as a large amount to other depositors.
The first question presented for determination on this appeal is whether section 1715 of Crawford & Moses' Digest, imposing liability on a bank president in favor of a depositor for failure to file a certificate with the county clerk of the county in which the bank is domiciled on or before the 15th of February or August, showing the condition of the affairs of the -bank on the first day of January or July of each year was repealed by the general •banking act of this State, which took effect January 1, 1914. Appellee's insistence is that the former act was superseded by the latter because a repugnancy existed be tween the two statutes requiring the officers to make reports of the condition of the bank. We are unable to discover any repugnancy. The general banking law requires the banks in the State to make at least two reports annually to the Bank Commissioner, and as many additional reports as he may demand, in greater detail than is required of a president and secretary of a bank under section 1715 of Crawford & Moses' Digest. The general banking law also requires that a thorough examination be made of each bank in the State at least once a year, and authorizes the examiner to examine any officer, agent or employee under oath touching the affairs of the bank. The evident purpose in the general banking law of requiring the banks to make reports to the Bank Commissioner, and in authorizing him and his examiners to examine the officers, agents and employees of banks under oath touching the condition of their affairs, was to enable him to discharge his duties in supervising them. The report required to be made by the president and secretary of a bank under section 1715 of Crawford & Moses' Digest is for the special protection of any one desiring to do business with the bank. One desiring to do business 'with a local bank would have the opportunity of going to the county clerk's office and ascertaining, at any time during the year, the conditiou of the bank on the first day of January or July, which would be much more convenient than to go to Little Rock to inspect the report filed with the Bank Commissioner. The fact that the reports required under the two acts serve different purposes argues that there was no intention on the part of the Legislature to repeal the former act by the enactment of the latter. Again, the general banking law of the State imposed a liability upon the directors of a bank for failure to remove an officer found by the Commissioner to be dishonest, reckless or incompetent. Crawford & Moses' Digest, § 683. It was contended in the case of Creamery Package Mfg. Co. v. Wilhite, 149 Ark. 576, that this act repealed, by implication, any preexisting liability of directors br' other( officers of banks for negligent mismanagement of the affairs thereof and absolved them from any liability for neglect of their duties save for failing to discharge officers found by the Commissioner to be dishonest, negligent or incompetent. This court ruled that the general banking law enlarged, rather than limited, the liability of directors and officers of banks for negligent mismanagement. We can see no good reason why the general banking law should be construed to enlarge the liability against directors and officers in one instance for neglect and to absolve officers from liability for neglect in other particulars.
The last insistence of appellant is that the court erred in holding that he could not institute and prosecute this suit after the corporation became insolvent. It is argued that, under § 1715 of 'Crawford & Moses' Digest, the right was accorded to a creditor or depositor to sue the president of the bank upon his failure to file the required certificate with the county clerk immediately after the bank became indebted to him, irrespective of the solvency or insolvency of the bank. In other words, the insistence is made that the liability fixed by the statute is personal to the creditor, and not a liability in favor of the corporation. This would be true if it were not for the general banking act in this State which took effect on the first day of January, 1914. The purpose and intent of that act, however, was and is that in case of the insolvency of the bank the Bank Commissioner of the State should take immediate charge of the failing bank and wind up all the affairs thereof under the supervision of the chancery court. The general banking act was given this interpretation in the case of Creamery Package Mfg. Co. v. Wilhite, supra. In that case this court said: "The purpose of this suit by the three depositors who have brought it is to apply to the discharge and satisfaction of the bank's indebtedness to them the liability of the directors for the negligent mismanage ment of the bank's affairs; and this without any allegation that the Commissioner had been requested to sue and had failed to do so. This they cannot do." Applying the rule thus announced to the instant case, appellant should have requested the Bank Commissioner to bring the suit for his benefit, and the Bank Commissioner should have brought it for appellant and other creditors of the bank to whom the president was liable, and who desired him to do so.
No error appearing, the judgment is affirmed.