Court Opinion

ID: 9826439
Source: CourtListenerOpinion
Date Created: 2023-09-01 15:56:33.950278+00
Date Added: 2024-06-11T07:42:03.742459
License: Public Domain

Mr. ChiEE Justice Gary:
This appeal involves the construction of section 18, art. IX of the Constitution, and raises the question, whether certain stockholders of the insolvent bank, who had paid the claims of the depositing creditors, are entitled to subrogation.
Section 18, art. IX of the Constitution, is as follows: “The stockholders of all insolvent corporations shall be individually liable to the creditors thereof, only to the extent *359of the amount remaining due to the corporation, upon the stock owned by them: Provided, That stockholders in banks or banking institutions, shall be liable to depositors'therein, in a sum equal in amount to their stock, over and above the face value of the same.”
The provisions of said section were formulated as a statutory enactment, in section 2660 of the Code of Paws.
When the first distribution of the assets was made, between the depositing and the other creditors, it was not then known that there would be any other assets to divide. And, when the Court thereafter rendered judgment, in favor of the depositors against the stockholders, it was then supposed by all parties in interest, that the amount therein mentioned, as the balance due the depositors, was correctly stated.
It was, however, afterwards discovered, that there were other assets that were distributable among the creditors, to . which the depositors would have been entitled to a pro rata share, if their claims had not been paid by the stockholders.
To'allow the stockholders -who paid the balance due the depositors, to participate in the distribution of the subser quently discovered assets, would not deprive the nondepositing creditors of the right to a larger dividend than they would have received if the depositors had not been paid the amount due them by the stockholders, until all the assets had been distributed.
This is not a question whether the stockholders are entitled to participate in the distribution of the assets, until all creditors are paid, but whether they are entitled to recover by subrogation so much of the assets as belonged to the depositors, and to which the stockholders became equitably entitled, when they satisfied the judgment, which the depositors recovered against them, under a misapprehension of fact, as to the status of the assets.
*360It is only just and equitable, therefore, that the stockholders should be subrogated to the rights of the depositors.
I concur in affirming the judgment of the Circuit Court.
Mr. Justice Hydrick:
The view taken by Mr. Justice Watts extends the' liability imposed upon the stockholders of banks by the Constitution and statutes to the protection of general creditors as well as depositors, which was not the intention of the lawmakers. The Constitution and statutes limit the special liability of the stockholders to the depositors.- The judgment should be affirmed.