Griffin v. the First State Bank of Fort Meade

Buford, J. The writ of error in this case is to review a judgment of the Circuit Court of Polk County against plaintiff in error in favor of defendant in error, The First State Bank of Fort Meade was found by the Comptroller to be in an unsound and insolvent condition and thereupon he appointed W. H. Lewis, George W. Singletary, and A. S. McMillan as Liquidators. Later, during the process of liquidation, the Comptroller made 100% 'assessment against stockholders and authorized the liquidators to *196 enforce the payment of the assessment. The liquidators instituted suit against the plaintiff in error. While the suit was pending and before the issues were made up the Comptroller allowed the bank to reopen and resume business and discharged the liquidators. Thereupon the bank made application to be substituted as plaintiff in suit against Griffin. The application was contested. On final hearing the court granted the order of substitution. After the bank was substituted as plaintiff demurrer was filed to the declaration as amended. The demurrer questioned the right of the reopened bank to maintain suit. Demurrer was overruled. Thereupon, pleas were filed which raised the question as to the right of the bank to maintain suit against stockholders for the payment of an assessment made by the Comptroller while the bank was in the hands of liquidators. To the pleas a replication was filed. The replication in effect alleged that the bank, although reopened for business, was still in the process of liquidation and that the bank was reopened under the provisions of Section 4167 R. G. S., 6108 C. G. L., as amended by Chapter 14487, Acts of 1929, and that it was contemplated by the agreement under which the bank was reopened that the 100% stock assessment which had been made against every share of the capital stock of the bank would be paid in full and be made a part of the assets of the bank. It is also alleged that in the order reopening the bank the capital stock of the bank had been reduced from $75,000 to $25,000. It was also alleged that all assets in the hands of the liquidators became a trust fund in the hands of the bank as reopened. Demurrer was filed to the replication. This demurrer contested the sufficiency of the allegations of the replica *197 tion to show that the bank was entitled to'maintain suit to enforce the payment of the assessment made against the stockholders. For the reasons hereinafter stated the demurrer should have been sustained. The Comptroller could not vest in the bank by his order any right or remedy which it was not authorized to exercise under the provisions of the statutes where statutory provisions have been enacted governing such matters. To determine the questions involved in this case it is not necessary for us to go beyond what has been said in two other cases, nor to cite authorities in addition to those which have been cited in those cases, the decisions and judgments in which must govern the disposition of this case. The distinction between the remedy of a bank to enforce the payment of an assessment made to replace impaired capital and the remedy available to the Comptroller to enforce the payment of an assessment made to produce funds' with which to liquidate the obligations of an insolvent bank was fully discussed and determined by this Court in the case of Hudson v. Bank of Waldo, 105 Fla. 526, 141 Sou. 750, and also in the case of Russ v. Gholson, 102 Fla. 865, 136 Sou. 506. When the bank here involved was reopened it became again a banking institution under the laws of the State of Florida and was no longer in the process of liquidation. It was authorized to do a banking business and came within the purview of the statutes governing going banking institutions. It therefore follows that from time the bank was reopened the method of enforcing the payment of an assessment against stockholders for liability on capital stock was that provided by Section 17 of Chapter 13576, Acts of 1929. If no suit had been instituted by the liquidators it *198 is not tenable, in the face of the decision of this court above referred to, that the bank could have maintained a suit against the stockholders to enforce the payment of the stock assessment. It cannot be reasonably asserted that the institution of the suit by the liquidators gave the bank when it reoponed the right to a remedy which it otherwise did not have. The bank could not be substituted as plaintiff in a suit which it could not under its own right ordinarily institute and maintain. We think that the contention that the stockholder is bound by the freezing order and its confirmation insofar as such order purports to fix his liability is without merit. At the time Griffin became owner of shares of stock in the bank his personal liability was fixed by the Statutes of Florida as they then existed. The record uncontroverted shows that Griffin became owner of the stock in 1926, three years before the enactment of the statute authorizing the freezing of deposits and the reopening of a bank under that process. If this judgment is to be affirmed it means that Griffin remains owner of the stock in .the reopened and operating bank and if the bank again goes' into the hands of the Comptroller for liquidation of its affairs by reason of obligations incurred after being reopened Griffin will be held liable for another assessment by the Comptroller for the benefit of creditors of such reopened institution. ■ The purpose of collecting money from Griffin is to acquire funds with which the bank may continue its operation as a reopened banking institution. The payment of this and other like obligations are necessary incidents to the continued reopened operation. The statutes at the time Griffin became owner of the stock contemplated that as matter incident to liquidation the Comptroller could make and collect an assessment on that stock equal to one hundred *199 per cent of its face value and when this' assessment was once paid there would be no further liability. That provision did not contemplate a reopening but a liquidation of a bank’s- affairs. Statutes then authorized assessment of bank stock to make good impairment of capital. Under the latter unless the assessment was' voluntarily paid and the stockholder thereby voluntarily continued his liability to assessment by the Comptroller for purpose of liquidation, the liability and remedy against him was limited by the provisions of Section 1 of Chapter 7930, Laws of Fla., later amended by Section 17 of Chapter 13576, Laws of Fla. See Hudson v. Bank of Haldo, supra. In the recent case of Doty v. Love, 55 U. S. Sup. Ct. Rep. 558, 79 Law Ed. 632, opinion filed April 1, 1935, the Supreme Court of the United States had under consideration the case of a bank which had been reopened under the statutes of Mississippi adopted in 1932. In that case when the bank was reopened under a statute somewhat like ours two objecting creditors appealed to the Supreme Court of the State invoking the protection of Article 1, Sec. 10, and the Fourteenth Amendment of the Federal Constitution. The decree granting the petition for reopening of the bank was affirmed and those two objecting creditors appealed the case to the Supreme Court. The Supreme Court affirmed the decree, but as we read the opinion in that case, it has no controlling effect on the case here under consideration. The effort here is to impose a liability on the owner of capital stock which is a statutory liability not in existence at the time he became owner of the stock. On authority of the opinion and judgments in the cases above cited, the judgment herein should be reversed and the cause remanded for further proceedings not inconsistent with this opinion. *200 It is so ordered. Reversed and remanded. Ellis, P. J., and Terrell, J., concur. Brown, J., concurs in the opinion and judgment. Whitfield, C. J., concurs specially in the reversal. Davis, J., concurs in part and dissents in part.