Court Opinion

ID: 8037645
Source: CourtListenerOpinion
Date Created: 2022-09-09 03:22:48.039172+00
Date Added: 2024-06-11T16:37:11.985934
License: Public Domain

Johnsen, J.
This case is here on motion for rehearing. Our previous opinion is reported in 136 Neb. 497, 286 N. W. 687. The question is whether we shall adhere to the rule there adopted that, in. enforcing the superadded liability of a stockholder of a bank under section 7, art. XII of our Constitution, the renewal of a certificate of deposit must be regarded as extinguishing the original liability for the deposit, and as creating a new and distinct liability from the date of the renewal.
The previous opinion follows Harrison v. Ault, 359 Ill. 75, 194 N. E. 235, and the view there expressed that “the surrender of a certificate of' deposit and the issuance of a new one is a new contract of deposit.” Fremont State Bank v. Vincent, 112 Wash. 493, 192 Pac. 975, is to the same effect.
The opposite view is declared in Dunn v. Bank of Union, *28374 W. Va. 594, 82 S. E. 758, where it is held that the renewal of a certificate of deposit, like the renewal of a note, is but a continuation of the debt, and that there is no extinction of the original liability, unless the parties so intend or agree. The West Virginia court says: “The certificates originally issued therefor were mere evidences of indebtedness then contracted. In other words, the certificates were, in effect, the notes of the bank, payable to each plaintiff. Although renewed by the subsequent issuance of other certificates, as previously observed, the original liability was not extinguished and a new liability created, any more than a new note pays an antecedent debt.”
The view of the West Virginia court appears to have been adopted as a preferred text statement in 7 Am. Jur. 97, sec. 119, where it is said: “A subsequent renewal of bank deposit certificates is not a payment of the original indebtedness and does not operate to absolve from liability persons who were shareholders at the time the original debts were contracted, but who have since transferred their stock.” It has similarly been made a text statement in 6 Zollman, Banks and Banking, 301, sec. 3997. There are other judicial expressions, in cases not involving stockholder’s liability, such as Village of Farmington v. Reisinger, 174 Minn. 56, 218 N. W. 444, and Barsness v. Tiegen, 184 Minn. 188, 238 N. W. 161, which recognize that the liability for a deposit, generally speaking, is a continuing one, notwithstanding renewal certificates have been issued. Thus, in the first mentioned case, it was held: “Where a certificate of deposit is taken for village moneys deposited with a bank and such certificate is renewed from time to time, the renewal certificates, nothing else appearing, are not payment of the original deposit.” The opinion declares: “The original obligation has remained, from the beginning, notwithstanding the renewals of the certificates of deposit, and as a matter of law has never been discharged by payment.”
While our previous opinion in this case is the first specific expression we have made upon the question, our *284records show that the issue was directly raised in Peterson v. Strayer, 121 Neb. 587, 237 N. W. 667. The stockholders in that case contended that their liability was governed by the date that the renewal certificates were issued, and not when the deposits were originally made, while the receiver contended that the taking of a new certificate of deposit was a mere renewal of the old indebtedness and not a payment thereof, where the parties had not agreed that the original debt was to be extinguished. The opinion does not discuss this contention, but the following statement therein indicates that the court must tacitly have adopted the view for which the receiver contended: “Did the liabilities accrue during the time the Strayer group were stockholders of the bank? Clearly, this must be answered in the affirmative.” The Washington and West Virginia cases, previously referred to herein, are duly cited in the briefs, and the court takes occasion to quote, though a bit obscurely, from the latter, that “the burden of showing such intention and agreement (rests) resting always upon him who claims the benefit of the discharge.”
In State v. Security State Bank, 116 Neb. 521, 218 N. W. 405, tacit recognition also appears to have been given to the principle that the liability for a deposit depends upon and is controlled by the original transaction, when the court refused to allow a renewal certificate to be brought within the protection of the guaranty fund, because the transaction initially was not subject to such protection.
Again, investigation discloses that, in past bank receiver-ships, the district courts of the state, generally speaking, have enforced the liability of stockholders in accordance with the rule in the West Virginia case, especially since the reference to that case in Peterson v. Strayer, supra. This circumstance, of course, has no particular significance, except to suggest the trend of the judicial mind in the state, in our consideration of what appears to be the preferable rule for final adoption under all the circumstances.
But, apart from all that has been said, the rule declared in the West Virginia case seems to us the better rule in *285accomplishing the purpose which the constitutional super-added liability was intended to serve. The liability obviously was designed for the fuller protection of creditors of the bank. It extends to all liabilities of the bank “accruing while he remains such stockholder.” It is a plenary obligation, created by the Constitution, and there is no reason to limit its scope by unnecessary construction. If each of the two rules referred to rested on equally cogent logic, there would be no occasion to make the stockholder a favorite of the law over the depositor. Rather, the depositor should have the fullest measure of protection from the constitutional liability that it is reasonably and soundly possible to give him. To the depositor, certainly, it is pure fantasy to say that, when he renewed his certificate, the money was returned to him, and that he in turn passed it back over the counter to the bank. So far as he was concerned, there was but one controlling transaction, and that was when he parted with his money. The rest of it was incidental detail — collecting interest, and going to the bank to receive a substitute certificate or receipt, so that his interest payments would not be interrupted.
A legal fiction may be resorted to, at times, to bridge the gap of logical imperfection, but there is no necessity to tolerate it, where the stream of actuality can rationally be crossed. We do not mean to imply, of course, that, on the renewal of a certificate, the nature of the transaction may not be so changed as to create a new and different obligation. No such situation, however, is here presented. The certificate-holders in this case, upon whose deposits defendant’s liability is made to depend, are not shown to have done anything in renewing their certificates, except to extend the time when they could collect their deposits, just as they would have done if they had renewed a promissory note.
It is our view, therefore, that we should adopt the rule that the mere renewal of a certificate of deposit is not a payment of the original indebtedness and will not operate to discharge the superadded liability, for such deposit, of *286a stockholder of a bank, who has transferred his stock before the renewal. Our previous opinion is accordingly vacated, and the judgment of the district court is reversed and the cause remanded, with directions to enter judgment in favor of plaintiff.
Former opinion vacated and judgment reversed.
Rose, J., dissents.