Lankford, State Bank Com'r. v. Menefee

1914 OK 651, 145 P. 375, 45 Okla. 228, 1914 Okla. LEXIS 263

• Court: Supreme Court of Oklahoma
• Decided: December 22, 1914
• Docket: 3330
• Status: Published

Opinions

LOOFBOURROW, J.

On August 9, 1911, J. D. Lankford as bank commissioner, commenced tbis action in the district court of Caddo county. His amended petition substantially states: That on October 17, 1905, the Columbia Bank & Trust Company filed its articles of incorporation with the secretary of the territory of Oklahoma, and soon thereafter commenced to do business in the city of Oklahoma. A copy of said articles of incorporation is ’thereto attached and marked Exhibit A. That said Columbia Bank & Trust Company was incorporated both under the laws of the territory of Oklahoma, relating to trust companies, and under the laws of the said territory relating to banks, and that said Columbia Bank & Trust Company was incorporated for the purpose both of doing a trust company business and doing a banking business. That, from and after the date on which said company commenced to do business in the territory of Oklahoma and up to the time of its failure in September, 1909, said company engaged in the banking business, both before and after statehood, and, at all times after the date of its organiaztion and up to -the time of its failure, received money on both general and special deposit, and conducted a general banking business, subject to the laws of the territory of Oklahoma relating to banks, and subject to the laws of the state of Oklahoma relating to banks.

Plaintiff further states: That there was never any reorganization of said Columbia Bank & Trust Company, but that said •bank and trust company continued to do a banking business up to and after statehood, under and subject to the banking laws of the state of Oklahoma, until September 7, 1909, when said Columbia Bank & Trust Company failed, and is now unable to meet, with its assets and credits, its debts and obligations. That said bank commissioner, acting under authority of law, has possession of said Columbia Bank & Trust' Company, and the same is now under bis control as such for tbe purpose of liquidation and settlement of the claims of its creditors. That the liabilities and obligations of said Columbia Bank & Trust Company amount to a -very large sum of money, and that, when all the assets and credits of said bank have been subtracted from its total liabilities, a. sum of money is left as liabilities, in- an amount 'far greater than the amount of all the stock subscribed and paid in by the stockholders of said bank; the 'amount of stock so> paid in by the stockholders being $200,000. That it is necessary for him, as bank commissioner, to enforce the personal liability of the stockholders of said bank to make good the foregoing deficit. That, at the time said bank was taken over as aforesaid, one J. A. Menefee was the owner of 250 shares of stock of $100 each in said bank, fully paid up, and said Menefee is still the owner of said stock. That, by reason thereof, the said Menefee is still liable to this plaintiff, as bank commissioner, in the sum of $25,000, same being the amount of stock subscribed and paid up by said defendant, and prays judgment for $25,000.

The material part of the charter of the Columbia Bank & Trust Company, filed as Exhibit A, reads:

“ARTICLES OF AGREEMENT.

“We, the subscribers, hereby associate ourselves together by the following articles of agreement; for the purposes herein set forth:

“Article 1. The name of this corporation shall be The Columbia Bank and Trust Company.5

“Article 2. This corporation shall be located 'in the city of Oklahoma City, Oklahoma county, territory of Oklahoma.

“Article 3. The amount of capital stock of this corporation shall be two hundred thousand ($200,000) dollars, divided into itwo thousand 2,000) shares, of the par. value of one hundred ($100) dollars each, which said shares.¡are now actually paid up in lawful money of the United States of America, and the money is in the custody of the persons named as the board of directors and its officers.

“Article 4. * * *

“Article 5. * * *

“Article 6. * * *

“Article 7. The' purposes for which this corporation is formed are: First. To receive money in trust or on general deposit with or without interest as may be agreed upon, and to accept and receive saving accounts and the payment to them or their order of deposits made by minors shall be binding on them; to receive upon deposit for safe keeping personal property of every description; to guarantee special deposits and to own and cpntrol safety vaults and rent boxes therein. Second. * * *”

To this amended petition defendant filed a general demurrer and the same was, by the court, sustained. Plaintiff elected to stand upon the amended petition, and the judgment was thereupon entered in favor of -the defendant, from which judgment the plaintiff appeals.

The petition alleges that the Columbia Bank & Trust Company was incorporated both under the laws of the territory of Oklahoma, relating to trust companies, and under the laws of the said territory, relating to banks. This statement of a legal conclusion is not binding upon the court as against a demurrer, unless the law and the petition sustain such allegation. As appears from the face of its charter, said company was, in fact, organized under the laws of the territory of Oklahoma (article 5, c. 11, Sess. Laws 1901), relating to trust companies, as amended by article 3, c. 10, Laws 1905, and the charter recites verbatim section 4 thereof, as amended by article 3, e. 10, Laws 1905.

As section 16, Trust Company Act, provides:

“Each stockholder of a company organized under this act shall be individually and personally liable for the debts of the corporation to the extent only of double the amount that is unpaid upon the stock held by him * * *”

—and this failed bank was organized under this act, this section would seem to be conclusive of defendant’s liability as a stockholder therein, but section 37, c. *1, 'Sees. Laws 1899 (General Banking Act), provides as follows:

“Any individual, firm or corporation, who siiall receive money on deposit, whether on certificates or subject to check, shall be considered as doing a banking business and shall be amenable, to all the provisions of this act: Provided, that promissory notes issued for money received on deposit shall be held to' be certificates of deposit for the purpose of this act.”

And plaintiff in error contends that said section 37 remained a part of the banking law, although the same is not incorporated in the revising statute (Sess. Laws 1907-08). That a revising statute takes the place of all the former laws existing upon the subject with which it deals seems settled beyond controversy. 36 Cyc. 1079, lays down the general rule as -to revision as follows:

“It is a familiar and well-settled rule that a subsequent statute revising the subject-matter of the former one, and evidently intended as a substitute for it, although it contains no express words to that effect, must operate to repeal the former * * * [citing numerous decisions from a great many states, United States, and England]. This rule does not rest strictly upon the ground of repeal by implication, but upon the principle that when the Legislature makes a revision of a particular statute, and frames a new statute upon the subject-matter, and from the framework of the act it is apparent that the Legislature designed a complete scheme for the matter, it is a legislative declaration that whatever is embraced in the new law shall prevail, and whatever is excluded is discarded. It is decisive evidence of an intention to prescribe the provisions mentioned in the latter act as the only ones on that subject which shall be obligatory.” (Mack v. Jastro, 126 Cal. 130, 58 Pac. 372; State v. Conklin, 19 Cal. 501; People v. Thornton, 186 Ill. 162, 57 N. E 841; Roche v. Jersey City, 40 N. J. Law, 257; Bracken v. Smith, 39 N. J. Eq. 169.)

Same volume, p. 1080:

“Where a statute is revised, some parts of the original act being omitted, the parts which are omitted cannot be revised by construction, but are to be considered as annulled, provided it clearly appears to have been the intention of the Legislature to cover the whole subject by the revision.”

See numerous authorities cited in note 52, same page.

“When a statute is revised, and a provision, contained in it, is omitted in the new statute, the inference is that a change in the law was intended to be made. If the omission was by accident, it belongs to the Legislature to- supply it.” Buck v. Spofford, 31 Me. 34.

These acts are discussed in Smock v. Farmers’ Union State Bank, 22 Okla. 825, 98 Pac. 945, an opinion by Justice Hayes, wherein it is said:

“The question in this ease, then, is not one of legislative power, but of legislative intent, and we must determine the nature of House Bill No. 615 and its effect upon the former laws pertaining to- the incorporation of banks and the control and regulation thereof. There is nothing in the title of this act to indicate that it is a revising statute, nor is there any expression in the act declaring it to be such a statute; but a careful comparison of this act .and its contents with chapter 8, Wilson’s Rev. & Ann. St. 1903 (chapter 4, Sess. Laws 1899), and the acts of the Legislature subsequently enacted, discloses that this act is principally a restatement in a correct and improved form of the laws contained in that chapter and in the subsequent acts of the Legislature. There are, it is true, some material changes, but this does not destroy the nature of the act as- a revising act, and it clearly appears from the subject-matter of the act that it it was intended to take the place of all the former laws existing upon the subject with which it deals. Hudson v. Ely, 36 Okla. 576 [129 Pac. 11]. In Bartless et al. v. King, 12 Mass. 545, 7 Am. Dec. 99, the court said: ‘A subsequent statute, revising the whole subject-matter of a former one, and evidently intended as a substitute for it, although it contains no- express words to that effect, must, on the principles- of law as well -as in reason and common sense, operate to repeal the former/ This language is quoted in Lewis’ Sutherland on Statutory Construction, vol. 1, p. 515, as stating the rule to be that the effect of a statute of revision, without express words repealing previous statutes, when it is apparent that the Legislature intended that the new act should cover the entire subject embraced in all the former statutes, is to repeal said statutes, both as to those parts that are repugnant and those parts that are not repugnant to the new act. The a'ct under consideration, however*, contains the following repealing clause: “All acts and parts of acts in conflict herewith are hereby repealed.’ This clause, inserted in acts other than revising •acts, neither adds to nor lessens the repealing force of the act. State v. Yardley, 95 Tenn. 546, 32 S. W. 481, 34 L. R. A. 656. But, when it is inserted in a revising act, the courts are not uniform, in their holding as to its effect. The text on Statutory Construction, above quoted, states the rule, however, as follows: ‘If the new act is intended as a revision and substitute for the former act or acts, the general rule applies, and the former act or acts are repealed in toto, though they may contain parts or provisions which are not embraced in the new act and are not repugnant to its provision.’ Lewis’ Sutherland on Statutory Construction, vol. 1, p. 522, citing Attorney General v. Parsell, 100 Mich. 170, 58 N. W. 839; The Paquete Habana, 175 U. S. 677, 20 Sup. Ct. 290, 44 L. Ed. 320; State v. Carbon Hill Coal Co., 4 Wash. 422, 30 Pac. 728. House Bill No. 615 covers the entire grounds of said chapter 8, Wilson’s Rev. & Ann. St. 1903 (chapter 4, Sess. Laws 1899) and of the four subsequent acts of the Legislature above referred to. It pertains to the same general subject-matter, and seeks to accomplish the same general purpose, and in the main is a re-enactment of those statutes in the same language, and we are therefore of the opinion that said act was intended by the Legislature as a substitute for all the laws then existing upon the subject-matter dealt with in that act, and that said former laws were repealed by it.”

But, assuming that this section was not repealed by said revision, there is no merit in the contention that, as the corporation in which defendant was a stockholder was doing a general banking business, defendant’s liability as such is fixed by section 11 of the Banking Act (Laws 1899, c. 4)' and section 9 of the Revising Act (Laws 1907-08, c. 6), both of which read:

“The shareholders of every bank organized under this act shall be additionally liable for the amount of stock owned, and no more.”

In other words, the contention is that, although this failed bank was organized under the Trust Company Act, which provides that stockholders of a company organized thereunder shall be personally liable for the debts of the bank to the extent only of double the amount unpaid upon this stock, yet, by reason of the fact that this company was doing a banking business in addition to a trust company business, his liability as a stockholder was changed or rather fixed by the terms, not of the Trust Company Act, but of the Banking Act, sections 11 and 9, supra, so as to be to the extent of the amount of his stock. And this, too, in virtue of section 37, supra, of the original • banking act. As stated, there is no merit in this for the obvious reason that the defendant, as a stockholder in the failed bank, was neither “an individual, firm or corporation” doing a banking business within the contemplation of that section. To hold otherwise would be to say, not that the corporation was doing a banking business as a corporation, but that the stockholders were doing the business as individuals. The term “individual” and “firm” doing a banking business have no reference to stockholders, and the term “corporation” does not include them; and this statute, declaring, as it does, that “corporation,” whether incorporated under that act or not, doing a banking business, shall be amenable to all the provisions of that act, is not broad enough to cover stockholders, so as to fasten the liability upon this stockholder imposed by sections 11 and 16, supra. That such was not the intent of the Legislature is clear for the reason that, when the entire Banking Act was revised by chapter 6, Sess. Laws 1907-08, the Legislature recognized the fact that corporations organized under the Trust Company Act were doing a banking business, and specific mention is made in many of the various sections of the' said Banking Act of trust companies, and the language of the act was broadened so as to permit trust companies to continue in the banking business —now if the Legislature had intended that stockholders in a trust company, doing a banking business, should be liable the same as stockholders of a corporation organized under the Banking Act, they could easily hare so provided by, for example, carrying section 37, supra, into- the revision and amending it so. as to- read:

“Any individual, firm or corporation, and the stockholders thereof, who- shall receive money on deposit * * * shall be amenable to all the provisions of this act, including the liability of stockholders: Provided. * * *”

But the Legislature made no such provision, and the word “corporation,” as used in section 37, supra, is not broad enough to include stockholders. In Park Bank v. Remsen, 158 U. S. 337, 15 Sup. Ct. 891, 39 L. Ed. 1008 a certain warehouse company was^a corporation of the state of New York, incorporated under a certain -act of the Legislature of that state. Section 9 of a .certain chapter of the act (Laws 1872, c. 701) provided:

“The corporation hereby created shall possess .all the general powers -and privileges, and be subject to all the liabilities, conferred and imposed upon corporations organized under and in pursuance of” another act.

The corporation never made and published a report as re■quired by section 12 of that .act (Laws 1848, c. 40) which report was to be signed by the president and a majority of the trustees and verified by the oath of the president or secretary. One Squires was president, and one Remsen was a director and trustee of the company. A certain firm doing business in New York made two promissory notes to the order of themselves and indorsed ■them in blank, which were thereafter indorsed by the warehouse company; the same being made by the president of the company without the knowledge of Remsen or the other directors. Section 12, referred to, provided that, for failure to file the report, the trustees “shall be jointly and severally liable for all the debts of the company, then existing, and for all that shall be contracted before such report shall be made.” In a suit against the warehouse company as.indorser of the notes, the court held that it did not become indebted to the plaintiff by reason of its indorsement. In seeking to charge Remsen, as trustee, with the debt of which the promissory notes were the basis, speaking to section 12, supra, the court said that, before any party should be held bound by such provisions, it must appear that the Legislature of the state 'had rendered him subject thereto. In passing, the court said:

“The contention' is that section 9 of the charter of the warehouse company in effect incorporates said section 12 into such charter, but the provision of section 9 is that the corporation shall possess'all the general powers and privileges and be subject to. all the liabilities conferred and imposed upon corporations organized under the act of 1848. It is the corporation which is given the powers and privileges and made subject to- the liabilities. Does this carry with it an imposition of liability upon the trustee or other officer of the corporation? The officer is not the corporation; his liability is personal, and not that of the corporation, nor can it be counted among the powers and privileges of the corporation. Iiow, then, can it. be contended that a provision in a charter -that the corporation thus chartered shall assume all the liabilities imposed by a general statute upon corporation carries with it a further provision of such general statute that the officers of corporations also assume, under certain conditions, the liabilities of the corporation? Does one, by becoming an officer of a corporation, assume all the liabilities resting upon the corporation ? Is not his liability of a distinct and independent character and ■dependent upon other principles? * * * The term ‘corporation’ does not include stockholders, and a .statute imposing a liability upon the corporation does not thereby impose the same upon the stockholders”

—and affirmed the judgment of the circuit court holding the defendant not liable.

A careful examination of the trust company laws and of the banking laws discloses the fact that both may do a general banking business and are subject to the control and supervision of the "Bank 'Commissioner. The principal differences are: First. That the trust company has .authority to accept and execute trusts, as set forth in the second to ninth paragraphs, inclusive, of section 4, art. 5, Laws 1901, while a bank is limited to a general banking business. Second. The capital stock of a bank in a city of more than 1.0,000 inhabitants cannot be less than $25,000, all of which must be fully paid up, while the capital stock of a trust company cannot be less than $200,000, at least one-half of which must be actually paid up. Third. A shareholder of any bank organized under the Banking Act is additionally liable for the amount of stock owned, and no more, while a stockholder of any trust company, organized under the Trust Company Act, is personally liable to the extent only of double the amount that is unpaid upon the stock held by him.

Banks and trust companies are corporations, and each .are regarded as legal entities. They have a separate existence from the persons who control them. There is said to. be no identity between the owners and the holders of the stock and the corporation itself. The corporation is the .real, though artificial, person substituted for the natural persons wlm may procure its creation and be financially interested therein. Every such corporation must be organized or incorporated for a particular purpose. Such purpose is usually expressly stated in the act of the statute giving life to the corporation. The Constitution or the statute fixes the liability of the stockholders of a corporation, 'and in this case the liability prescribed by the statute is, in its nature, contractual. The Legislature prescribed that the liability of a stockholder in a trust company should be double the amount that is unpaid upon the stock by him held. When the defendant purchased this stock he became the equitable owner of that much corporate property, but the -power to transact business under the charter could -be exercised only by the corporation. The defendant assumed all of the liabilities imposed by the statute upon him as a stockholder in a trust company. His contract was that he would pay the pa.r value of the stock by him owned. He had therefore complied with every condition of his contract, and the petition does not state a cause of action against him.

The judgment of the trial court is affirmed.

KANE, C. J., and THENEE and BLEAKMOBE, JJ., concur.