Court Opinion

ID: 7192666
Source: CourtListenerOpinion
Date Created: 2022-07-24 16:59:02.285332+00
Date Added: 2024-06-11T16:16:14.083502
License: Public Domain

Concurring Opinion.
Poché, J.
In view of the fact that I had concurred in the previous decree, and of the extended and separate study which I have since devoted to the issues involved in this case, I deem it proper to add my views to the able opinion prepared by my associate.
In our previous opinion in this case we refused to consider the defense urged as to the quantum of liability of stockholders to make up the deficit for the payment of the debts of the Association, on account of the bonds issued for it by the State, and advanced the following reasons in support of our course:
1. “ The defense, if of any force, that the payment of all the instalments, under the call in 1847, operates as a discharge for the surplus of the subscription, cannot avail the defendant, as he has not paid them.”
2. “ The defense' touching the quantum of liability, on the assumption that it could relieve the defendant, cannot be inquired into in the absence of evidence to substantiate it.”
After a thorough reexamination of the record, a careful consideration of the argument of counsel for defendant on their application for rehearing, and an exhaustive review of the authorities relied upon by' them, I have reached the conclusion that we had, to a certain extent, misapprehended the exact nature of the defense on this point.
' As I now understand the proposition, the resistance is to the power of the Association to make any other call for contribution beyond that required under the provisions of Act 1Ü0 of 1847.
The State has intervened, joining the plaintiff in the present case, and is, therefore, a party under the pleadings. Hence, to all intents and purposes, the’issue presented in the controversy can be tested in the same way as though the State was the real plaintiff, seeking to enforce payment of the unpaid instalments of the call made under the: Act of 1847, and of the contribution called for under the authority of Act No. 20 of 1878. ■ •
I take it as an undeniable- proposition, that this Association ceased-to be a going corporation since the 17th of November, 1842, when its *439charter was judicially declared to be forfeited, and that the amount or extent of the liability of the stockholders to contribute ratably to the payment of the debts of the concern was fixed according to the financial condition of the Bank at that date, and that the corporation was henceforward powerless to perform any corporate act; nothing being then left to do but to proceed to a liquidation of the concern.
Buell was the understanding of the State authorities, and of all other parties concerned at the time, and hence, a liquidation of the Association was immediately ordered by legislative authority, under the provisions of Act No. 92 of 1843.
Now, as the State had issued, for the credit of the Rank, all the bonds which were outstanding, and had secured her liability by a pledge on all the stock mortgages and other assets of the corporation, her only security and her exclusive safety consisted in a proper control of the assets of the concern.
Hence, it is, that Section 3 of the Act provides: “ That the assets of the Consolidated Bank of the Planters of Louisiana are and shall remain in the possession and under the exclusive management of the State of Louisiana, until final payment of all the State bonds issued in its favor.”
Proceeding in the liquidation the State authorities soon reached the conclusion that a call on the stockholders was necessary to create a fund needed for the payment of the debts.
•This prompted further legislation on the subject, and culminated iu Act No. 100 of 1847, which made ample provision to that effect. Section 6 ordered: “ That it shall be the duty of said managers and directors to require such annual or periodical payment from the stockholders of the Consolidated and Citizens’ Bank, independently of their stock obligations, as will accumulate a fund sufficient to meet, faithfully and regularly, the obligations of the State for account of these Banks; provided, the amount required from the stockholders of the Consolidated Association be divided in equal instalments, running from one to seventeen years,” etc.
In obedience to this .mandate the board of directors of the plaintiff Company met on the 6th of June, 1847, and adopted the following resolution:
11 Résolu qu’aux termes de l’aete approuvé le 6 avril 1847, une contribution de six piastres par action sera payable par chaqué actioniiaíre de 1’Association Consolidée le ler de juin de l’annóe 1849 et le ler de juin de chacune des seize années qui suivront.”
This contribution was equivalent to a call of $102 per share, and the number of shares being 6,000, the total amount contemplated in the call was, therefore, $612,000.
*440The resolution was made in express compliance with the requirements of the Act 5 it must have been preceded by an examination into the financial condition of the concern, and it must have been predicated- on a full statement of the debts to be paid, and the amount of the assets then :held in pledge by the State. Hence, the resolution of the Board must be construed as a declaration from the State to the stockholders, that a payment of $102 on each and every share held by them would release them from any aiid all liability as stockholders, on account of the bonds issued by the State in favor of the corporation.
This declaration when acted on and accepted, as it was, by the stockholders, ripened into an inviolable contract between the State and the stockholder. If any stockholder, having no loan mortgage] had then stepped up to the Bank, and had paid in full the amount which was exigible only by instalments in seventeen years, it will hardly be gainsayed that he was entitled to a full discharge. -How then can it be conceived that, in the legislative mind, any other call was then possibly contemplated 1
Tile well known history of this interminable liquidation informs us that this contract has not been faithfully-executed by the board entrusted with its management, and the subsequent insolvency of a large number of the stockholders has rendex-ed impossible any collection from them.
Although the law provided very rigorous measures to secure and enforce the payment of the instalments under the call, such as pledges on growing crops and the like, it appears that many instalments remain unpaid. It appears further, that by means of large] useless and extravagant expenditures,, in the shape of unnecessary salaries and lawyer’s fees, a considerable proportion of the assets realized have been misappropriated, and that a large deficiency still exists, to supply xvhich an additional call of forty dollars per share has been made by the board of directors under authority of Act No. 20 of 1878.
Without the necessity of passing upon the alleged uucoustitutionality of that Act and of the Act of 1866, under which this liquidation, xvhich was to have legally terminated in 1865, has secured a uew lease of life, it is safe to conclude that, under the effect of its own legislation and under its solemn contract with the stockholders of this corporation, the possession and control of whose assets was taken by the State and administered under her instructions and under her authority, the State alone must be held reponsible for all the acts of maladnxinistration and spoliation, including the unwarranted interference of a fedei'al court, which have together brought about the result with which we are now concerned.
By her own acts the State has placed herself in the attitude of a *441creditor who accepts the surrender of his debtor and undertakes to husband the latter’s resources. Such a creditor could find no relief in the courts, if his failure to realize assets sufficient to satisfy his claim could be traced to the negligence and mismanagement of his own agents and employees. The neglect of duty and other unauthorized acts of the officers of the State, in this liquidation, have been expressly acknowledged and proclaimed by the legislature in the preamble of Act No. 20 of 1878.
For the reasons given in our previous opinion, the plea of prescription against the unpaid instalments claimed of the defendant, under the Act of 1847, must be sustained.
I, therefore, concur in the decree.