Aber v. Maxwell , 140 Ark. 203 ( 1919 )

MoCULLOCH, C. J.

The Hempstead County Bank, a domestic corporation doing business at Hope, Arkansas, became insolvent, and on December 17, 1917, the State Bank Commissioner, in the exercise of his authority conferred by statute (Acts 1913, page 462), took charge of the property and affairs of the bank and proceeded to administer the same, and on March 11,1918, the commissioner issued and published a call on the stockholders for the assessment of double liability imposed by that statute. Appellant was a stockholder, and failing to respond to the call by payment of his assessment, the Bank Commissioner instituted this action against him to recover the amount of the assessment. Appellant appeared by counsel and first filed a motion to require that the complaint be made more definite and certain by setting forth a list of the assets and liabilities of the defunct bank, and, the motion being overruled, an answer was filed, which, contained the following paragraphs relied on here as stating a defense to the action:

“And, further answering, the defendant denies that there was any necessity existing for the said John M. Davis, Bank Commissioner, as aforesaid, to take charge of the affairs of said bank; denies that said bank was insolvent and alleges the truth to be that on account of the carelessness and incompetency of the plaintiff, John M. Davis, Bank Commissioner, or his assistants, the true condition of the affairs of said bank was not discovered at the time the said Bank Commissioner took charge of the affairs of said bank; that the deficit existing in the accounts of the said banking corporation at the time the same was taken in charge by said Banking Commissioner was caused by numerous overdrafts drawn by the Dixie Broom Company of Hope, Arkansas; that said overdrafts had been carried on the books of said banking corporation for a long time prior to June 30, 1916, and had been overlooked by the Bank Examiner in making his investigation ; that the overdrafts of the said Dixie Broom Company continued from day to day after June 30, 1916, and that on December 17, 1917, the overdrafts of the Dixie Broom Company had reached the sum of $125,-068.37; that all of said overdrafts were being carried on the books of said bank and had been for a long period of time.

“That under the laws of the State of Arkansas the officers of said bank became liable to the stockholders for the amount of . the overdrafts so drawn by the Dixie Broom Company; that W. Y. Foster, president of said bank, without the knowledge or consent of 'the stockholders of said bank, permitted the Dixie Broom Company to draw money out of said bank on overdrafts, and thereby himself became liable to the stockholders of said bank for the amount of the overdrafts of the Dixie Broom Company; became liable to pay same and did pay same, and that when said W. Y. Foster had paid the amount found to be necessary to adjust the affairs of said bank he paid what he was liable under the law to pay, and the amount so paid in adjusted the affairs of said hank and the necessity no longer existed to make an assessment of 100 per cent or any other amount against the stockholders of said bank.

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“Defendant further answering alleges that all the debts of said bank have been paid by the said W. Y. Foster, as he should have done; that the same amounted to less than the amount of the overdraft allowed by the said W. Y. Foster to the Dixie Broom Company, and that they are no.t liable for any assessment of the value of their stock.

“And further answering the defendant alleges that the claim for which plaintiff is attempting to enforce the penalty of a double liability for stock in said bank, is a claim founded on a note executed by the said W. Y. Foster, president of the Hempstead County Bank, to himself or by said bank after said bank had become insolvent and was in the hands of the plaintiff as Bank Commissioner; that said note was given, or-said, debt created in due course of business of said bank, and is not such a debt, contract or engagement of said bank as would warrant or justify the plaintiff in making said assessment for its payment.”

The prayer of the answer was that the cause be transferred to equity and that the note alleged to have been executed by Foster be canceled. An amendment to the answer was filed, which contained charges of negligence and other misconduct of the directors of the bank in the management of its affairs, and a prayer that Foster and the other directors be made parties, and the prayer for transfer to equity was renewed. The court sustained a demurrer to the answer, and, on the failure of appellant to plead further, final judgment was rendered.

(1) In the case of Davis, State Bank Commissioner, v. Moore, 130 Ark. 128, we construed the statute creating the State Bank Department and conferring authority upon the State Bank Commissioner with respect to winding up of insolvent banks, and we decided that in a suit to enforce the double liability of stockholders, the action of t.he commissioner in levying assessments was conclusive as to the necessity for the call and the amount thereof, and that the question could not be raised in that suit. We based our conclusion on the fact that the terms of the statute were borrowed from the National Banking Act, which had been thus construed by the Supreme Court of the United States. The first decision of that court was in the case of Kennedy v. Gibson, 8 Wall. 498, and the decision there rendered has been steadily adhered to. Casey v. Galli, 94 U. S. 673; United States v. Knox, 102 U. S. 422; Bushnell v. Leland, 164 U. S. 684; Studebaker v. Perry, 184 U. S. 258; Hale v. Allison, 188 U. S. 56; Christopher v. Norvell, 201 U. S. 216.

It was contended before the Supreme Court of the United States that the question of the necessity for the call was a matter of judicial cognizance which Congress could not withdraw from the courts and place exclusively within the authority of the Comptroller of the Currency, but the court refused to accept that theory, and held that the comptroller had the power to make the call, and that the necessity for it was conclusive in an action to enforce it. In our own case cited above, we expressly pretermitted a decision of the question whether or not, in an action to enforce the double liability of a stockholder, a charge of fraud and collusion on the part of the Bank Commissioner would constitute a defense. It is unnecessary to decide that question in the present case, for. the reason that the answer does not contain any such allegation, either expressly or inferentially. The substance of the answer is that all of the valid debts of the defunct banking corporation have been paid, and that the only asserted claim is a note held by W. Y. Foster, the president of the bank, which he executed for the bank to himself for money advanced in refund of moneys overdrawn by the Dixie Broom Company, and that Foster’s claim was not a valid one for the reason that he had wrongfully permitted the overdrafts, and was, therefore, liable to the bank for the amount thereof.

This is no more nor less than the statement in detail of the fact that there was no necessity for the commissioner’s call on the stockholders for compliance with the double liability. The answer does not, as before stated, constitute an allegation of collusion between the Bank Commissioner and Foster for the wrongful imposition of this liability on the stockholders for the purpose of paying the money over to Foster in satisfaction of an un- . just claim against the bank. It is true the answer alleges that there were no valid unsatisfied claims on the bank at all, but this, too, relates merely to the question of the necessity for the commissioner’s call, and it falls squarely within the decision of this court and the decisions of the Supreme Court of the United States on this subject. If, as we have heretofore held, the call of the Bank Commissioner is conclusive of its necessity and propriety in an action to enforce the call, then that necessity can not be inquired into on an allegation that the debts of the bank have in fact been paid, for it is the very thing which the commissioner himself must inquire into and decide before he issues a call.

(2) The remedy of the stockholders for an unnecessary or an excessive call is in the chancery court, which supervises the proceedings of the State Bank Commissioner and allows claims and makes final distribution of the assets.

The decision of the circuit court was correct, and the judgment is, therefore, affirmed.

HUMPHREYS, J., dissents.