Freeman v. Abraham , 353 Pa. 330 ( 1945 )

Mr. Chief Justice MAXEY filed a dissenting opinion in which Mr. Justice DREW and Mr. Justice PATTERSON concurred.

Argued September 26, 1945. This appeal raises the question whether the Secretary of Banking, as receiver of a closed bank, having made one assessment for 100% against the stockholders, may subsequently make another assessment for 100% against the same stockholders. The court below held that he may not.

On January 27, 1932, the Secretary of Banking, as receiver, entered into possession of The Pennsylvania Deposit Bank of McKeesport. On March 22, 1932, he concluded that the bank should be liquidated. On May 31, 1934, the Secretary, having determined that the bank's assets were insufficient to pay creditors in full, made a 100% assessment against the stockholders, in accordance with the Department of Banking Code of 1933, P. L. 565, 71 PS section 733, et seq. Notices were sent to the stockholders demanding payment by June 30, 1934. It would appear from plaintiff's exhibit "B" to the statement of claim that some of the stockholders have made full or partial payments on account of this assessment and an assessment hereafter referred to. Others have not, including the defendant.

The Secretary of Banking, becoming apprehensive concerning the sufficiency of the notice which he had given under the 1934 assessment, and ignoring the advice of his counsel to give all stockholders new and valid notices of such assessment, on October 18, 1943, made a second assessment of 100% against all stockholders. Notices were sent to the stockholders. The regularity of such later notices is conceded. A suit in assumpsit was then instituted against defendant on January 28, 1944, to collect such 1943 assessment. An affidavit of defense was filed and issue joined. After the trial in the court below, the jury was directed to render a verdict for defendant. Motions for new trial and for judgment for the plaintiff n. o. v. were dismissed by the court.

The learned court below accurately stated: "The Banking Department is authorized by the applicable statutes to make as many assessments as may be necessary upon the stockholders in order to pay the debts of the bank, provided, the total number of assessments does not exceed one hundred per cent of the par value of the outstanding capital stock."

Counsel for the appellant concedes that no assessment is enforceable unless it is accompanied by a legal notice of such assessment and demand for payment; and that the notice and demand concerning the assessment of 1934 did not comply with the Banking Code and hence was insufficient to impose liability upon the stockholders. He vigorously argues that this irregularity was corrected, not by a new and amended notice of the 1934 assessment, but by a new 100% assessment on October 18, 1943, with notice and demand made thereon (the basis of the instant suit). We agree with the learned court below that appellant's contention is without merit.

Appellant fails to distinguish between an assessment and the prescribed statutory method of imposing liability under the assessment upon individual stockholders. Section 723 of the Department of Banking Code, 71 PS section 733-723, provides as follows: "A. If at any time after he takes possession of a corporation as receiver, it shall appear to the secretary that the assets of such corporation will be insufficient to pay in full its debts to depositors and other creditors, he shall, as soon as expedient, estimate the amount which shall be assessed against all shareholders who are, under these circumstances, personally liable for any part of the debts of such corporation, by reason of their ownership of such shares. He shall assess against such shareholders the amount which he then deems necessary for the payment of such debts, not however exceeding the maximum liability of such shareholders, as provided by law. The secretary shall send to every such shareholder by registered mail to the address which appears on the records of the corporation, or if none appears there, then to his last known address, a demand that the amount assessed against him be paid. Such demand shall state the total amount assessed by the secretary against all the shareholders, and the specific amount to be paid by the particular shareholder. It shall also designate a period within which such assessment shall be paid, such period to be not less than thirty days after the date of the sending of the notice. If any shareholders shall not pay the amount assessed against them, the secretary may institute actions at law or in equity against them, either severally or jointly, for the amount of such assessment, together with interest from the date designated in the notice from the secretary, for the payment of such assessment. In such action, the written statement of the secretary, signed by him in his official capacity as receiver and bearing the seal of the department, asserting that the assets of the corporation appear insufficient to meet its liabilities to depositors and other creditors, that consequently he has made an assessment against the shareholder or shareholders being sued, that the period designated for the payment of the assessment has expired, and that the value of the assets of the corporation and the liabilities of such corporations are as set forth, shall be prima facie evidence of the facts therein stated. B. The secretary may make as many partial assessments as shall appear expedient, until the total liability of the shareholders, or the total amount necessary to pay in full the depositors and other creditors of the corporation, has been assessed."

It is clear, therefore, that the code provides for a general assessment against all stockholders. Each individual stockholder becomes liable under the assessment after he is notified of such assessment by registered mail and of the amount due by him thereunder, with a demand for payment not less than thirty days thereafter.

To adopt appellant's contention would result in a most anomalous situation. This record does not disclose what notices were sent and the contents thereof under the 1934 assessments. Neither does Schedule B disclose whether payments were made by stockholders under the 1934 assessment or under the 1943 assessment. Suits under the 1943 assessments, with a prior valid assessment outstanding, would result in untold confusion. It is apparent that in order to enforce the liability of the defendant stockholder it will be necessary to mail to him, in the manner prescribed in the Code, a proper legal notice of such assessment and demand of payment thereof. If notice and demand have not been given in the prescribed statutory manner, new and legal notice may still be given based on the 1934 assessment.

Appellee contends that an action against him under the assessment of 1934 would now be barred by the statute of limitations. That question is not before us. However, we may call attention in that connection to our decisions in Freeman, etc., v. Rogal, 351 Pa. 266, 40 A.2d 853, and in Freeman v. Brady et al., 352 Pa. 249, 42 A.2d 451.

The appeal from the judgment is dismissed, without prejudice to the enforcement and collection of appellee's liability, if any, under the assessment of 1934.