Court Opinion

ID: 5555626
Source: CourtListenerOpinion
Date Created: 2022-01-11 00:40:36.851717+00
Date Added: 2024-06-11T08:35:19.051499
License: Public Domain

Lochrane, C. J.,
dissenting.
1. The facts in this case have just been recited. The question arises upon the rights of stockholders, under their statutory liability for the ultimate redemption of all deposits made with the banking company of which they were such stockholders. The sixteenth section of the Act of incorporation of the Mechanic’s Saving and Loan Association, out of which this liability arose, is substantially the same in relation to the ultimate liability of stockholders as that which we find in the various charters which have been so often adjudicated by this Court. It is not our purpose to enter into any disquisition upon the law applicable to banking corporations, our object being simply to place briefly and perspicuously the summary of the doctrines and principles governing such cases. The record shows that Wiltberger owned one-tenth of the stock, the capital being $250,000 00; that the deposits were $198,310 37, making his liability to such depositors, under the section quoted, $19,837 03. Wiltberger redeemed some $20,000 00 of these deposits, taking assignments of the original books, which he surrendered to the assignee of the bank, thus surrendering the amount due by him, as such stockholder, upon his ultimate liability.
Upon the trial of the plaintiff’s case, he offered in testimony, by the assignee, proof of these facts, and such books of deposits, so surrendered and cancelled, being brought in by such assignee, were'referred to in his testimony. We concur in the opinion that such testimony was legally admitted. The assignee is the only legal representative of the corporation, and is, in law, the trustee of the creditors. The surrender of these books to him, and their cancellation, was an extinguishment of the debts due by the bank to the amount of over $20,000 00, and more than the ultimate liability due by him. He was sued on a statutory liability, and this proof was properly admitted to show his discharge. In the manner in which they were admitted they were not original evidence, *585nor did they require proof by subscribing witnesses or the parties making the assignments; nor, in our opinion, was it material for his defense against such statutory liability to prove how or for what consideration he had procured them. He was not bound to pay any specific sum of money; he was bound to redeem his proportionate part of the debts due by the bank. If he did this, it made no difference how he did it. The simple question was, did he redeem the amount of debts he was bound to redeem? If he did, he was discharged ; if he did not, he was liable. The evidence offered by him was to show he had extinguished his liability by the redemption of such an amount as, under the provisions of the charter, he was liable for; and in no more satisfactory method could this redemption be made to appear than by the surrender of the evidences of its indebtedness. If the statute imposed upon him the duty of paying the debts due depositors of the bank, then it followed, not only as a logical, but a legal consequence, that he had the right to discharge the duty imposed upon him by the law. This Court has laid down the rule, “ when the charter of a bank makes each stockholder individually liable for the redemption of the bills of the bank in proportion which his stock bears to the whole capital stock of the bank, or to the whole indebtedness of the bank, a stockholder who has redeemed, by purchase or otherwise, an amount of the bills of the bank as large as his personal liability is no longer liable, and, when sued as a stockholder, he may plead that fact and tender the bills in Court as a complete defense.” If this principle applied to stockholders in the redemption of bills, it applies to stockholders in banks of deposit to depositors. We have examined, carefully, the various bank decisions of this Court, and the various authorities cited in connection therewith, and feel-satisfied the weight of authority sustains the propositions we-have laid down.
2. The only question in this case is, “whether-the institution of a suit by a depositor against a stockholder vests in> *586each party, by reason of such Us pendens, a legal right to the recovery of his individual debt as entitles him to recover against such stockholder the full amount of his individual claim. This question has invoked the necessity of examination into the rights of parties as against individual stockholders, and the consideration whether this statutory liability is in effect an individual contract of suretyship, or is an obligation imposed by the charter for the fulfillment of a duty expressed in its obligation, for the ultimate redemption of all deposits in proportion to the number of shares held. Our opinion is, that the obligation is to redeem an amount of the debts in proportion to the shares of stock, and that at any time before or after suit by each or all of such depositors, it is within the statutory right of the stockholder to extinguish his liability; and that such extinguishment or redemption of the debts due by such corporation to an amount equal to the liability of such stockholder in proportion to his shares, is a complete legal defense to the recovery of such stockholder as may have instituted such suit, and the duty to pay is no more obligatory in law to a depositor who has sued than to one who has not sued; and that even if it were an individual liability he has a right to prefer his creditors at any time before judgment. But as we do not regard this as an individual liability, the right and duty are cor-relative with the duty to extinguish and the right to extinguish by the redemption of the debts due by him in proportion to his stock, which when done and made to appear by proper proof to the Court, amounts to payment, and the plaintiff cannot recover. .Uor is this rule prejudicial to the legal rights of depositors. The statute vests no individual rights by the commencement of the suit. The charter looks to no personal preference of creditors. The liability imposed is redemption; when that is accomplished the party is discharged, and may plead it as well to a suit pending as to one thereafter to be commenced. For these reasons I think the judgment of the Court below should be affirmed.