Opinion
No. 31722.
May 27, 1935. Suggestion of Error Overruled July 24, 1935.
1. EXECUTORS AND ADMINISTRATORS.
Compliance with statute providing that all claims against estate of deceased persons, whether due or not, shall be registered, probated, and allowed in court in which letters testamentary or of administration were granted within six months after first publication of notice to creditors, is mandatory (Code 1930, section 1672).
2. BANKS AND BANKING.
Statutory liability of bank stockholder accrued at time bank became insolvent and closed (Code 1930, sections 3780, 3815).
3. EXECUTORS AND ADMINISTRATORS.
Claim against bank stockholder for statutory liability having accrued prior to stockholder's death, which occurred after bank became insolvent and closed, was required to be probated the same as other unsecured debts (Code 1930, sections 1672, 3780, 3815).
4. EXECUTORS AND ADMINISTRATORS.
Where statutory liability of bank stockholder had accrued prior to stockholder's death but claim had not been probated, suit to recover such statutory liability instituted after expiration of statutory period for presenting claims held barred (Code 1930, sections 1672, 3780, 3815).
APPEAL from the chancery court of Prentiss county.
HON. JAS. A. FINLEY, Chancellor.
Action by J.S. Love, Superintendent of Banks, against John E. Gray, administrator. Decree for plaintiff, and defendant appeals. Reversed and rendered.
E.C. Sharp, of Booneville, for appellant.
The claim was never probated against the estate of Marion A. Sanders as required by law.
Section 1669, Code of 1930.
The administrator had done everything required of him under this section of the statute. Notice was promptly published after the death of Sanders, and proof of publication filed with the clerk.
Sections 1647 and 1672, Code of 1930; Johnson v. Machinery Co., 93 Miss. 169, 46 So. 957; Lehman v. Powe, 95 Miss. 448, 49 So. 622; Persons v. Griffin, 112 Miss. 643, 73 So. 624; Merchants Manufacturers Bank v. Fox, 165 Miss. 833, 147 So. 789; Board of Bank Examiners v. Grenada Bank, 135 Miss. 247, 99 So. 903.
Under our statute and the holding of this court it is provided that the superintendent of banks may levy an assessment against the stockholders even before the bank closed, and that this may be done at any time after the closing of the bank, and if an excessive amount is collected that it shall be refunded pro rata to the stockholders who have contributed.
Gift v. Love, 144 So. 562.
The claim of an insolvent bank's creditor against stockholders is created within the statute of limitations when the bank fails.
Andrews v. Peoples Bank, 238 N.W. 542; Mitchell v. Banking Corporation, 22 P.2d 175.
It is established law in this state that when some preliminary action is an essential prerequisite to the bringing of a suit, and such action rests with the claimant, he cannot defeat the operation of the statute of limitations by long and unnecessary delay in taking the antecedent step, and the statute will begin to run within a reasonable time after the party could, by his own act, perfect his right.
Sanders v. Merchants State Bank, 182 N.E. 897; West v. Topeka Savings Bank, 66 Kan. 524, 72 P. 252, 63 L.R.A. 137, 97 Am. St. Rep. 385; McDowell v. Minor, 130 So. 484, 142 So. 491.
After the time for the probation of claims has elapsed creditors have a right to rely upon the probate register, and if they acquire property which may afterwards be subjected to claims which were not probated, innocent purchasers would thereby be deprived of their rights because of the negligence and delay of parties over whom they had no control.
Harris v. Hutcheson, 65 Miss. 9, 3 So. 34; Drainage District v. Evans, 136 Miss. 178, 99 So. 819; Hollis v. Bryan, 166 Miss. 874, 143 So. 687. C.R. Bolton, of Tupelo, for appellee.
We think the question in this case is to be largely determined by the facts. The question resolves itself into one of whether or not the closing on December 26th was such as would have imposed liability on the deceased, M.A. Sanders.
Section 3815, Code of 1930; Pate v. Bank of Newton, 77 So. 603.
At the time of the death of M.A. Sanders, the bank was not in process of liquidation, and the claim could not, therefore, have been enforced against M.A. Sanders at any time prior to his death.
The first decision of this court on the question of whether or not claim for statutory stock liability was required to be probated was in the case of Board of Bank Examiners v. Grenada Bank, 99 So. 903.
This court held in the case of Carothers v. Love, 152 So. 483, a case growing out of the stock liability in the same bank, that it was unnecessary to probate a claim for stock liability against the estate of the person who died "before the bank closed its doors and went into liquidation." It seems to us that this decision is clear authority for the position that we have taken in this matter and for the holding of the court below in the instant case.
On the 26th day of December, 1930, the Booneville Banking Company closed its doors and suspended business and remained closed thereafter. On January 12, 1931, the chancery court of Prentiss county entered a decree placing the affairs of the bank in charge of the state superintendent of banks, the appellee here.
On December 27, 1930, Marion A. Sanders, a stockholder of the Booneville Bank, died testate. His will was probated on the 27th day of January, 1931, and Joseph W. Sanders was appointed executor and granted letters testamentary. On the 29th day of January, 1931, the executor published notice to creditors to present their claims against said estate for probate and registration according to law within six months from that date. The notice was published for the statutory period and due proof thereof was seasonably filed in the chancery clerk's office. Later Joseph W. Sanders resigned as executor of said estate, and John E. Gray, the appellant, was appointed administrator with the will annexed.
No claim was ever probated against the estate of Marion A. Sanders for his liability as a stockholder in the defunct bank. On July 2, 1932, the superintendent of banks filed a bill in the chancery court against a large number of the stockholders of the bank seeking to recover their statutory liability. In this bill the executor of the estate of Marion A. Sanders was made a party defendant and sued for the par value of decedent's stock. Before the trial Gray, as administrator of the estate, was admitted to defend the suit. The bill discloses that on the day the bank closed its doors it was insolvent, and a statement, set forth therein, demonstrated that fact.
There were many issues submitted to the chancellor on the trial of the case; upon some of them he adjudged that the estate of Marion A. Sanders was liable for the full amount of the value of the stock he owned at the time of his death. From that decree Gray, administrator, prosecutes an appeal to this court.
By agreement of counsel the sole question presented here is whether or not it was necessary that the claim for liability against the estate of Marion A. Sanders should be probated before suit could be maintained thereon. There were other questions in the court below and assigned as error here, but the case is narrowed now to the single issue.
It is the contention of the appellant that the liability on the stock held by Marion A. Sanders arose during his lifetime upon the closing of the bank at a time when it was insolvent.
The appellee contends that the liability of Sanders on his shares of stock in the bank did not arise until after his death; in other words, that the liability had not matured into a cause or right of action.
If the cause of action arose on the day the bank closed insolvent, then on that defense interposed in the lower court it was necessary to probate the claim, and since it was not so probated it was barred when the suit was brought in 1932. The executor had published notice and done all things requisite to set in motion the statute of limitations as to the probation of claims.
Section 1672, Code of 1930, provides that all claims against the estate of deceased persons, whether due or not, shall be registered, probated, and allowed, in the court in which the letters testamentary or of administration were granted within six months after the first publication of notice to creditors to present their claim; otherwise the same shall be barred, and a suit shall not be maintained thereon in any court. Compliance with this section is mandatory. Johnson v. Machinery Co., 93 Miss. 169, 46 So. 957; Lehman v. Powe, 95 Miss. 446, 49 So. 622; Persons v. Griffin, 112 Miss. 643, 73 So. 624; Merchants Manufacturers Bank v. Fox, 165 Miss. 833, 147 So. 789.
Section 3815, Code of 1930, provides that the stockholders of every bank shall be individually liable, actually and ratably, and not for one another, for the benefit of the depositors in said bank to the amount of their stock at the par value thereof. Section 3780, Code of 1930, makes it the duty of the superintendent of banks, when it is brought to his attention that the capital stock of any bank is impaired, to immediately require the stockholders to pay into the bank a sufficient sum to restore the capital, or execute a bond to insure the solvency of the bank, conditioned that all debts shall be paid in full.
In Pate v. Bank of Newton, 116 Miss. 666, 77 So. 601, this court held that the liability of stockholders, as fixed by section 3815, supra, is a primary obligation, and a suit against them may be maintained whenever it is reasonably apparent that the assets of the bank will not pay the depositors, and there is no requirement to await a collection and application of the debts and property of the bank before bringing such suit against the stockholders, and that liability accrues with the making of a deposit. It was there further said that when the stockholders pay this liability into the bank and it is applied to the satisfaction of the depositors' claims, and after the debts of the bank are paid, if there were any funds left the stockholders would naturally secure this remainder as a stockholder of the bank; and, of course, a stockholder who had paid the liability would first be repaid before any stockholder who had not paid such liability.
In Board of Bank Examiners v. Grenada Bank, 135 Miss. 242, 99 So. 903, this court held that a claim against the estate of a deceased stockholder is barred unless probated where the stockholder dies after liability accrues. The court there said that a suit may be brought against stockholders for such liability at any time after the bank has been taken over and whenever it is reasonably apparent that the assets of the bank will not pay the depositors.
In the case of Gift v. Love, 164 Miss. 442, 144 So. 562, 86 A.L.R. 63, this court announced the rule for determination of the question as to when the liability accrues. It held that when a bank became insolvent and closed, the deceased stockholder's double liability matured, standing in the same class as other unsecured debts, and became a charge on the estate's entire personalty and realty. The case at bar comes well within this rule; the claim here had matured before the death of Sanders, and therefore should have been probated, and not having been duly and legally probated, no suit can now be maintained therefor. The decision in this case is limited to its facts.
Reversed, and decree here for appellant.