Opinion
No. 28367.
January 27, 1930.
BANKS AND BANKING. Money paid by stockholders of insolvent bank under statute inures to benefit of all depositors of bank ( Hemingway's Code, sections 3831, 3854).
Money paid by stockholders of insolvent bank equal to value of their stock under Laws 1916, chapter 207, section 59 (Hemingway's Code, section 3854), inures to benefit of all depositors of bank, and not only to those whose deposits are guaranteed, under Laws 1922, chapter 172, section 36 (Hemingway's Code, section 3831).
APPEAL from chancery court of Coahoma county, Second district. HON. R.E. JACKSON, Chancellor.
Butler Snow, of Jackson, and J.A. Covington, Jr., of Meridian, for appellant.
The appellant by virtue of the payments to the county and the assignment was subrogated to all the rights and equities which the county had against the bank.
Canton Exchange Bank v. Yazoo County, 144 Miss. 579; United States Fidelity Guaranty Co. v. First National Bank, 116 Miss. 239; Fidelity Deposit Company v. Wilkinson County, 109 Miss. 879; Prestridge v. Lazar, 132 Miss. 168; Robertson v. Sullivan, 102 Miss. 581.
The liability imposed by the statute on stockholders is a primary liability and may be enforced before the other assets of the bank are exhausted.
Pate v. Bank of Newton, 116 Miss. 665; Board of Bank Examiners v. Grenada Bank, 135 Miss. 242; Abbey v. Delta Bank Trust Co., 139 Miss. 36; 14 C.J., p. 977.
Neither the simple or guaranteed depositors, nor the state have a lien or preference claim in the assets of the bank as against other creditors.
Anderson v. Baskin Wilbourn, 114 Miss. 81.
The double liability of the stockholders inured to the benefit of all depositors in all state banks made after March 5, 1915.
Pate v. Bank of Newton, 116 Miss. 665.
Flowers, Brown Hester, of Jackson, for appellees.
The double liability statute was created for the protection of the depositors who actually placed their money on deposit in banks without security or excessive interest, and for these alone.
Anderson v. Baskin Wilbourn, 114 Miss. 81; Section 3019, Hemingway's 1927 Code; Potter v. Fidelity Deposit Co., 101 Miss. 823, 58 So. 713.
A consideration of the entire act (Sec. 3594, Hemingway's Code 1927) will convince the court that it was the legislative intention that all the creditors should share pro rata in the collections from the assets of the bank, and that the amounts collected from the double liability of stockholders should be paid to guaranteed depositors and then any balance due on guaranteed deposits should be paid from the guaranty fund of the state.
Section 3594 of Hemingway's 1917 Code, was amended and clarified by act of the legislature passed in 1926.
The constitutionality of the Banking Act was upheld in Bank of Oxford v. Love, 111 Miss. 699, on the theory that the act was passed by the state for the protection of the public, the depositors.
The appellant was not a depositor in the Commercial Bank of Clarksdale in the sense contemplated by the double liability statute.
Argued orally by Geo. Butler, for appellant.
The Commercial Bank of Clarksdale qualified as a depository for Coahoma county public funds, with the United States Fidelity Guaranty Company as one of the sureties on its bond. Thereafter the bank failed and was taken over by the banking department, its affairs now being in the process of liquidation. The county had on deposit with it something over thirty-six thousand dollars, which was paid by the bank's bondsmen, the pro rata of the United States Fidelity Guaranty Company being something over ten thousand dollars. The county assigned to each of these bondsmen his pro rata of the amount due the county by the bank. The appellant filed its claim in the liquidation proceeding for its pro rata of the money due by the bank to the county, and it was paid a dividend due thereon out of the general assets of the bank, leaving a balance due it of something over five thousand dollars. Some of the bank's stockholders paid to the liquidating agent an amount of money equal to the par value of their stock under the provision of section 59, chapter 207, Laws of 1916 (Hemingway's 1927 Code, section 3854), and, upon not being allowed to participate in this fund, the appellant appealed to the court below, where its request so to do was denied.
The state banking department was created by chapter 124, Laws of 1914. Section 38 thereof provides that "all deposits not otherwise secured shall be guaranteed by this act." Section 59 thereof provides that "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, in addition to the said stock." These sections now appear as section 36, chapter 172, Laws of 1922 (Hemingway's 1927 Code, section 3831), and section 59, chapter 207, Laws of 1916 (Hemingway's Code, section 3854). The source from which the money to pay the deposits guaranteed under the first of these sections is set forth in other sections of the statute, in none of which is the money to be paid by stockholders included.
The question presented for decision then is simply this: Does the money to be paid by the stockholders of a bank under section 59, chapter 207, Laws of 1916 (Hemingway's 1927 Code, section 3854), inure to the benefit of all of the depositors of the bank, or only to those whose deposits are guaranteed under section 36, chapter 172, Laws of 1922 (Hemingway's 1927 Code, section 3831)?
The appellees' argument in support of the decree of the court below is that the first of these statutes should be interpreted in the light of the purpose which the legislature was seeking to accomplish, which is to guarantee the payment of unsecured bank deposits. This undoubtedly was one of the purposes the legislature sought to accomplish, but it was not the only one; and whether the requirement for the payment of money by stockholders was in furtherance of that purpose must be determined by the language of the statute, it being plain and unambiguous. That requirement is, "for the benefit of all the depositors in said bank," and the guaranty of "all deposits not otherwise secured." The first plainly covers all deposits, and the second "all deposits not otherwise secured."
Reversed and remanded.