Chapman v. Hopper , 261 S.W. 166 ( 1924 )

The proposition stated in the brief of plaintiffs in error, as based on the sixth assignment of error, presents in effect the point in view, viz., that the legal effect attaching to the evidence is to deny the defendant in error allowance and payment of the claim sued for out of the guaranty fund. According to the undisputed evidence, heretofore stated, "the directors of the bank" had a conference with the special agent of the state banking department, with the view and for the purpose of increasing the bank's available funds, the bank at the time being in "a hard financial shape." The ultimate agreement reached was that a fund was to be raised for "the purpose of increasing the cash in the bank," and placed in the bank, available to it as bank funds. Each stockholder was to pay into the fund a sum of money equal to one-half of the par value of the stock held. An assessment on the stock, however, was not made nor intended to be made upon stockholders as such to discharge the stockholders' liability for debts of the bank existing at the time. For, as the defendant in error testified:

"No assessment was undertaken to be levied at that time on the stock of the bank. No amount was levied at all on this particular day when we had this conference with the special agent of the department. There was nothing compulsory about it; but just a few of us made up this deposit for the benefit of the bank."

The contribution to the fund by the stockholders was to be purely voluntary. Four of the stockholders, including the defendant in error, contributed to the fund, each ratably according to his amount of stock aggregating one-half of the par value thereof. The fund so raised was placed in the bank, and made available to it as money actually on deposit to meet its financial straits in its regular and active business. The money so paid into the fund and placed to the credit of the bank was, as testified, in order "to be security for the bank," and "for the benefit of the bank," and "to help hold the bank up." The fund was made up and placed in the bank "for the benefit of the bank," with the understanding at the time that each contributor to the same was to be repaid his contribution, "in the event we got the money from the War Finance Corporation" by way of the loan then being negotiated. The evidence is:

"The understanding was that in the event we got this money from the War Finance Corporation the $650 deposit was to go back to our general deposits subject to check."

There was further understanding, however, that in the event the bank did not get the loan from the War Finance Corporation, and "did not continue" to operate as a banking institution, that the amount each contributor put in the fund "would apply to our 100 per cent. assessment" authorized to be made by law, upon liquidation. It is evident from these precise facts that the defendant in error and his costockholders did not make nor intend to make merely an ordinary deposit of the several sums of money to their individual credit. The parties were getting up money to place to the bank's credit to be available to it in its regular business, needed to meet the bank's financial straits. And neither was the money so assembled by such stockholders intended to be a special deposit fund to their credit. The identical money constituting the fund was not to be safely kept by the bank and then returned to the stockholders at the end of a fixed time. The money was, and was intended to be, commingled with other money in the bank, and the bank was to use it in its general business, and was not to repay or "refund" it until the loan was obtained from the War Finance Corporation, whether that time be 30 days or several months. The transaction assumes, we think, all the characteristics of a loan voluntarily made to the bank as such in its corporate existence, and should be so characterized, constituting the defendant in error and each of his costockholders merely creditors of the bank at the time of its liquidation on January 6, 1922, entitling them to share in the distribution of the assets of the estate applicable to their claim. Even though the money was placed in the bank temporarily for "the benefit of the bank" and "as security" for the bank "to help it over an extreme" financial strait, the transaction is none the less a distinct loan to the bank as such of that much money for a fixed time, payable at the fixed time, and subjecting the bank to that degree of responsibility. For such parties in providing the fund, ratably contributing thereto, were acting in the transaction, not for their individual benefit, but for the benefit of the bank as a corporate institution, to the end that the bank might have actual control and use of the money during the time for the purpose intended as available cash on deposit to meet the emergency need of it. And being officers of the bank they have the power and authority to act for the bank in providing the money needed for its use in the scope of its regular business. Further, the defendant in error is not legally entitled to have the $650 paid by him into the fund, loaned to the bank, applied in part satisfaction and extinguishment of his individual responsibility of stockholder provided by articles 459, 552, Rev. Stat., even though he and his costockholders understood and believed that it would so be done, in the event of the future liquidation. The payment made into the fund by the defendant in error in conjunction with his costockholders was not made upon that distinct consideration that it was to be kept and used only after liquidation in payment of the bank's debts. The contribution he made to the fund was purely voluntary, with the opportunity and means of knowledge of the actual fact that it was not an assessment by the stockholders by their vote as such as a payment of their individual liability under the law. Neither was it actually or by intention a legal assessment by the state commissioner. The legal assessment of stockholders, such as the commissioner could make, can only be made after the liquidation of the bank's affairs begins. And payment by a stockholder as an assessment on his stock in advance of the time of a legal assessment is not, in law, a legal payment of his assessment, extinguishing his legal liability to the extent of such payment. Delano v. Butler, 118 U.S. 634, 7 S. Ct. 39, 30 L. Ed. 260. Quoting from that case:

"The assessment * * * made by authority of the comptroller of the currency is not voluntary, and can be applied only to the satisfaction of the creditors equally and ratably. If the claim in the present case were allowed, it would follow that in every case payments made by stockholders, for the purpose of restoring the impaired capital, would be considered as credits on the ultimate * * * responsibility of shareholders, and the whole efficiency of the provisions of section 5151 for the protection of the creditors of the company at the time of liquidation would be destroyed."

The very purpose of the statute, in authorizing assessment of stockholders to pay the bank's debts, is to insure that money being in the possession of the commissioner to discharge such debts. To permit stockholders to pay assessments in advance, primarily as a loan to the bank, of the time the legal assessment is due and payable, and while the bank is continuing in business before liquidation, would utterly defeat the purpose of the statute. In such circumstances the bank could use and pay out such money in its regular business, and at date of liquidation have none of it with which to pay debts. It is not the purpose of the law to allow that condition to arise.

The judgment, we think, should be reversed, and judgment here entered in favor of the plaintiffs in error without prejudice to defendant in error's right, as a general creditor of the bank, to have his claim allowed and share in the assets of the estate applicable thereto. The defendant in error will pay costs of the trial court and of this appeal.