Case Name: In re Involuntary Dissolution of Battle Creek State Bank, a Nebraska banking corporation. William B. Hengstler, Cotrustee of the A.W. Hengstler Testamentary Trust, appellant, v. Battle Creek State Bank et al., appellees
Court: Nebraska Supreme Court
Jurisdiction: Nebraska
Decision Date: 1998-03-06
Citations: 254 Neb. 120
Docket Number: No. S-96-062
Parties: In re Involuntary Dissolution of Battle Creek State Bank, a Nebraska banking corporation. William B. Hengstler, Cotrustee of the A.W. Hengstler Testamentary Trust, appellant, v. Battle Creek State Bank et al., appellees.
Judges: White, C.J., Caporale, Wright, Connolly, Gerrard, and Stephan, JJ.
Reporter: Nebraska Reports
Volume: 254
Pages: 120–134

Head Matter:
In re Involuntary Dissolution of Battle Creek State Bank, a Nebraska banking corporation. William B. Hengstler, Cotrustee of the A.W. Hengstler Testamentary Trust, appellant, v. Battle Creek State Bank et al., appellees.
575 N.W.2d 356
Filed March 6, 1998.
No. S-96-062.
David A. Domina, of Domina & Copple, P.C., for appellant.
Thomas H. DeLay, of Jewell, Gatz, Collins, Fitzgerald & DeLay, for appellees Battle Creek State Bank et al.
Robert S. Lannin, of Croker, Huck, Kasher, DeWitt, Anderson & Gonderinger, P.C., for appellees Robert Doering and Karen Hale.
Rodney W. Smith, of Smith & Doerr, P.C., for appellee Jean Brestel.
Don Stenberg, Attorney General, and Fredrick F. Neid for amicus curiae Department of Banking and Finance, State of Nebraska.
White, C.J., Caporale, Wright, Connolly, Gerrard, and Stephan, JJ.

Opinion:
Per Curiam.
STATEMENT OF CASE
This appeal presents the question of whether an allegedly oppressed minority shareholder may invoke involuntary dissolution proceedings pursuant to Neb. Rev. Stat. § 21-2096 to 21-20,104 (Reissue 1991) to dissolve a Nebraska bank. We conclude that such a shareholder may not invoke involuntary dissolution proceedings in the district courts. Rather, the proper venue is the Nebraska Department of Banking and Finance (Department), pursuant to Neb. Rev. Stat. § 8-187 (Reissue 1997).
Section 8-187, which empowers the Department to take possession of a Nebraska bank and conduct its affairs, is inconsistent with § 21-2096, which gives the district courts similar powers. In resolving this inconsistency, we apply well-settled rules of statutory construction, bearing in mind that banks are quasi-public institutions that have long been closely regulated by the Legislature. Legislative intent is not clear as to whether § 21-2096 was intended to implicitly repeal § 8-187. The Legislature clearly intended, however, to give the Department broad authority over Nebraska's banks. Accordingly, § 8-187 controls, and we affirm.
The plaintiff-appellant, William B. Hengstler, as cotrustee of the A.W. Hengstler testamentary trust, a shareholder of the defendant-appellee Battle Creek State Bank, seeks the involuntary dissolution of the bank under the provisions of the Nebraska Business Corporation Act (Act), Neb. Rev. Stat. § 21-2001 et seq. (Reissue 1991 & Cum. Supp. 1994), since rewritten by the Legislature in 1995 as the Business Corporation Act, § 21-2001 et seq. (Reissue 1997). The district court concluded that as the bank is a Nebraska corporation which is chartered as a commercial bank, its dissolution lies exclusively within the jurisdiction of the Department or the Federal Deposit Insurance Corporation (FDIC). It therefore granted the bank's motion for summary judgment and sustained the demurrers of the other shareholders, the defendantsappellees Battle Creek State Company, William M. Svoboda, Richard B. Grant, Donald E. Smejkal, Lawrence Praeuner, Almira Freudenburg, Robert Doering, Karen Hale, Roger L. Brestel, and Jean Brestel. The appellant successfully petitioned this court to bypass the Nebraska Court of Appeals on the ground that the case presents a question of first impression. He asserts, in summary, that the district court erred in ruling as it did.
PROCEDURAL POSTURE
Although the district court sustained the demurrers of the defendant shareholders, it did not dismiss the suit as to them. As the sustaining of a demurrer not followed by a judgment of dismissal terminating the litigation does not constitute a reviewable final order, we have acquired no jurisdiction over that aspect of the appeal. See Barks v. Cosgriff Co., 247 Neb. 660, 529 N.W.2d 749 (1995). We therefore concern ourselves only with the matter of the summary judgment in favor of the bank.
We also observe that notwithstanding that the appellant is designated as "cotrustee," the assignments of error raise no issue as to his capacity to bring this action without the participation of any other trustee. As a consequence, we do not concern ourselves with the matter of the appellant's capacity to maintain this action.
SCOPE OF REVIEW
The dispositive question, whether the Act permits a shareholder to bring an action to involuntarily dissolve a corporation chartered as a commercial bank under the state's banking statutes, Neb. Rev. Stat. § 8-101 et seq. (Reissue 1991 & Cum. Supp. 1994), is one of law. In connection with a question of law, we, as an appellate court, have an obligation to reach an independent conclusion irrespective of the decision made by the court below. Four R Cattle Co. v. Mullins, 253 Neb. 133, 570 N.W.2d 813 (1997); Boettcher v. Balka, 252 Neb. 547, 567 N.W.2d 95 (1997).
ALLEGATIONS ON RECORD
The appellant has alleged that the directors and officers of the bank, which is insured by the FDIC and is a member of the Federal Reserve System, engaged in "improper, oppressive or fraudulent acts, all contrary to the best interests of the Bank" in that they paid excessive amounts of compensation to certain shareholders, directors, and officers; used bonuses as a subterfuge to avoid the payment of dividends otherwise reasonably due to shareholders; and engaged in insider purchases and sales of loans to and from the bank.
ANALYSIS
The appellant argues, inter alia, that because banking corporations are generally subject to the Act, which does not specifically exclude banks from its involuntary dissolution procedures, involuntary dissolution of a bank is proper pursuant to § 21-2096 (Reissue 1991). The bank, however, contends that § 21-2096 is inconsistent with the banking laws contained within chapter 8 of our statutes and thus, that chapter 8 controls. The Department joins in this contention as amicus curiae. Therefore, the issue we must resolve is whether a banking corporation may be involuntarily dissolved under § 21-2096 of the Act despite the fact that such action would conflict with the banking laws.
We begin our analysis by noting that the Act does not prohibit the involuntary dissolution of a corporation. However, a banking corporation is unlike a purely private corporation in that a banking corporation is a quasi-public institution subject to the special banking rules and regulations of the State of Nebraska. § 8-102. It is a quasi-public institution in the sense that "[t]he whole stream of commerce, whether interstate or intrastate, largely depends upon [its existence]." United States v. Doherty, 18 F. Supp. 793, 794 (D. Neb. 1937), aff'd 94 F.2d 495 (8th Cir. 1938). Indeed,
"[b]anks are indispensable agencies through which the industry, trade, and commerce of all civilized countries and communities are carried on; the business which they transact, though for private profit, is of a pre-eminently public nature, and is therefore universally recognized as a proper subject of legislative regulation under the police power of the state. . . ."
Placek v. Edstrom, 148 Neb. 79, 92, 26 N.W.2d 489, 497 (1947). Thus, due to the stark contrast in nature between banking corporations and strictly private corporations, public policy dictates that banking corporations should be afforded different treatment with respect to the manner in which they may be involuntarily dissolved. However, even though there are sound public policy arguments for not treating banks the same way as other business corporations, our analysis of the banking statutes and the Act is necessary to the resolution of the instant case.
The Act empowers the district courts to dissolve a corporation in a proceeding by a shareholder when the directors or those in control of the corporation have acted, are acting, or will act in a manner that is illegal, oppressive, or fraudulent. § 21-2096(l)(b). Once the foregoing is established, the district court may liquidate the assets and business of the corporation in accordance with § 21-2097 to 21-20,100 (Reissue 1991). Once liquidation proceedings have begun, § 21-2097 empowers the district court to conduct the affairs of the corporation prior to entering a decree of dissolution. Specifically, the district court has the power, inter alia, to issue injunctions, appoint receivers, and carry on the business of the corporation. Id. Furthermore, receivers appointed by the district court to carry on the liquidation have the authority to sell, convey, and dispose of all or any part of the assets of the corporation wherever situated, either at public or private sale. Id. Most significantly to the instant case, § 21-2097 states that "[t]he court appointing such receiver shall have exclusive jurisdiction of the corporation and its property, wherever situated." (Emphasis supplied.)
When a corporation is conducting business as a bank, however, that corporation falls within the purview of § 8-101 to 8-1,139, which regulate banks and banking in this state. Section 8-187 empowers the Department to take possession of the property and business of a bank and conduct its affairs, retaining possession of all money, rights, credits, assets, and property of every description belonging to the bank, whenever it finds that a bank "is conducting its business in an unsafe or unauthorized manner." § 8-187.
The grounds for involuntary dissolution alleged by the shareholders in the instant case, "improper, oppressive or fraudulent acts, all contrary to the best interests of the Bank," are encompassed within the broader language of § 8-187. The specific acts alleged by the shareholders, that the directors and officers of the bank paid excessive amounts of compensation to certain shareholders, directors, and officers; used bonuses as a subterfuge to avoid the payment of dividends otherwise reasonably due to shareholders; and engaged in insider purchases and sales of loans to and from the bank, are neither "authorized" under Nebraska law, nor are they "safe." See § 21-2035 (Reissue 1991) (stating that director shall discharge his or her duties in good faith, with care ordinarily prudent person in like position would exercise under similar circumstances, and in manner that is in best interests of corporation).
Thus, the Department is authorized to take possession of the property and business of a bank upon the same grounds that a shareholder may bring a proceeding for involuntary dissolution.
Moreover, the Department's power is effective against any mesne or final process issued by any court against the bank whose property has been taken, which includes a proceeding for dissolution. § 8-187. Thus, according to the plain language of § 8-187, once the Department takes possession of a banking corporation, the court is powerless to conduct the affairs of that corporation or enter a decree of dissolution. See Svoboda v. Snyder State Bank, 117 Neb. 431, 220 N.W. 566 (1928) (holding that suit may be brought against corporation that is in possession of administrative agency, so long as it is not sought to take away or subject any of assets of corporation, or to interfere with possession thereof by agency).
Likewise, even after a court has appointed a receiver to liquidate the corporation's assets and business, § 8-187 still empowers the Department to take possession of that bank and conduct its affairs, since the corporation continues its legal existence. See § 21-20,100 and 21-20,101 (Reissue 1991). Clearly then, § 21-2096, which gives the court exclusive jurisdiction of the corporation and its property, is in conflict with § 8-187, because a corporation may not be in the exclusive possession of both the Department and the district court simultaneously. For example, not only is the court powerless to enter a decree of dissolution under § 21-20,101 once the Department takes control of a bank, it also is powerless to appoint a receiver under § 21-2097, both by statute and by prior case law. See Farmers State Bank v. Luikart, 131 Neb. 692, 269 N.W.2d 627 (1936).
It is true that a legislative act which is complete in itself and is repugnant to or in conflict with a prior law repeals the prior law by implication to the extent of the repugnancy or conflict. Mauler v. Pathfinder Irr. Dist., 244 Neb. 217, 505 N.W.2d 691 (1993). However, it is also true that in the absence of clear legislative intent, the construction of a statute will not be adopted which has the effect of nullifying or repealing another statute. State ex rel. City of Elkhorn v. Haney, 252 Neb. 788, 566 N.W.2d 771 (1997). Moreover, to the extent there is conflict between two statutes on the same subject, the specific statute controls over the general statute. SID No. 2 v. County of Stanton, 252 Neb. 731, 567 N.W.2d 115 (1997). Sections 8-187 and 21-2096 both regulate the proceedings available when a corporation's directors act in a manner that is inimical to that corporation's best interests. Section 8-187 is more specific, however, in that it regulates the proceedings available when such action is taken by the directors of a corporation that is conducting business as a bank. Thus, § 21-2096 did not implicitly repeal § 8-187; rather, § 8-187 controls.
We have long held that in construing a statute, a court must look to the statute's purpose and give the statute a reasonable construction which best achieves that purpose, rather than a construction which would defeat it. Slagle v. J.P. Theisen & Sons, 251 Neb. 904, 560 N.W.2d 758 (1997). Furthermore, the components of a series or collection of statutes pertaining to a certain subject matter may be conjunctively considered and construed to determine the intent of the Legislature so that different provisions of the act are consistent, harmonious, and sensible. SID No. 2 v. County of Stanton, supra. In construing § 21-2096 and § 8-187 together, it is apparent that the Legislature intended § 8-187 to control. The purpose of § 21-2096, insofar as it provides for the involuntary dissolution of a corporation by a shareholder, is to protect the rights of that corporation's minority shareholders. 3 Model Business Corporation Act Annotated § 14.05 (3d ed. 1984 & Supp. 1996). The purpose of § 8-187, however, is to protect not only the minority shareholders of a bank, but also the entire public at large.
It is the public nature of the banking industry that prompted this court's conclusion that the purpose of the banking statutes is to take the banking industry out of private hands and place it under state control, State, ex rel. Chamberlin, v. Morehead, 99 Neb. 146, 155 N.W. 879 (1915), which purpose would be defeated if a banking corporation's shareholders could bring a private action for involuntary dissolution.
Therefore, we conclude that the shareholders of a corporation conducting business as a bank may not institute involuntary dissolution proceedings in a district court.
CONCLUSION
We conclude, therefore, that the district court was correct in granting summary judgment in favor of the bank. The judgment of the district court as regards the bank's motion for summary judgment is, therefore, affirmed.
Affirmed.
McCormack, L, participating on briefs.