Corporation Commission of North Carolina v. McLean

CoNNOR, J. The individual liability of stockholders of a banking corporation organized under the laws of this State, by reason of' their ownership of shares of the capital stock of such corporation, is statutory. O..S., 219(a). It is provided by the statute that such stockholders shall be individually responsible, equally and ratably, and not one for another, for all contracts, debts and engagements of such corporation, to the extent of the par value of the shares of stock owned by them. This liability is imposed by law upon such stockholders for the protection and benefit of depositors and other creditors of the corporation. The purpose of the law is to make available, upon the insolvency of the corporation, for the payment of its debts, a fund in addition to its capital stock. All persons whose names appear on the books of the corporation as stockholders are, ordinarily, subject to the statutory liability. American Trust Company v. Jenkins, 193 N. C., 761, 138 S. E., 139. It is only when it is shown that a person whose name appears on the books of the corporation as a stockholder, is not in fact an owner of stock, that such person is not subject to the statutory liability. Corp. Com. v. Harris, 197 *81 N. C., 202, 148 S. E., 174; Darden v. Coward, 197 N. C., 35, 147 S. E., 671. Tbe boobs of the corporation show, prima facie, at least, who are its stockholders, and who are liable to assessment in accordance with statutory provisions. The procedure for the enforcement of the statutory liability of a stockholder of a banking corporation, organized under the laws of this State, upon the insolvency of such corporation, is also statutory. O. S., 218(c), subsection 13. It is provided by the statute that after the expiration of thirty days from the date of the notice that the State Commissioner of Banks, (formerly the Corporation Commission) has taken possession of the business and property of a banking corporation, because of its insolvency, the Commissioner of Banks may levy an assessment equal to the stock liability of each stockholder of the corporation, and shall file a copy of such levy in the office of the clerk of the Superior Court of the county in which the corporation has its office or principal place of business. The provision of the statute that the assessment when levied and filed as provided therein shall have the force and effect of a judgment of the Superior Court, which may be enforced by execution, has been upheld by this Court. Corp. Com. v. Murphy, 197 N. C., 42, 147 S. E., 667. The statute further provides, however, that any person who shall be assessed as a stockholder of an insolvent banking corporation, may appeal from such assessment to the Superior Court; the issue or issues raised by such appeal shall be determined as in other actions in the Superior Court. The only issues of fact which may be raised by such appeal and determined in the Superior Court, ordinarily, are: (1) Was the appellant a stockholder of the insolvent banking corporation at the date of his assessment? (2) If so, how many shares of the capital stock of said corporation did appellant own at said date? The answers of the jury to these issues will be sufficient, ordinarily, to support a judgment of the Superior Court, disposing of the appeal. Only in rare cases, if any, can matters not involved in these or similar issues, be injected into the trial in the Superior Court of an appeal from an assessment made as provided by statute to enforce the individual liability of a stockholder of an insolvent banking corporation. In the instant case there was no error in the judgment vacating and setting aside the order made in the cause that J. A. Sinclair and Canie N. Brown be made parties to this proceeding. Neither J. A. Sinclair nor Canie N. Brown upon the facts appearing from defendants’ pleading are proper parties to the proceeding. If the defendants have a *82 cause of action against tbem or against either of them, they may prosecute an action to recover damages on such cause of action; they cannot have relief in this proceeding. To hold otherwise, would defeat the purpose of the statute, which is to provide an expeditious proceeding for the enforcement of the statutory liability of all persons who are stockholders of an insolvent banking corporation, at the date of its insolvency, and at the same time provide for a trial in the Superior Court of issues of law or fact involving the liability of any person who may be assessed, and who denies such liability. On the facts alleged in their answer and cross-bill, the defendants were stockholders of the Central Bank and Trust Company, at the date of their assessment. No issue of law or fact is raised by their pleading, involving their liability as stockholders under the statute. Their names appeared on the books of the corporation as stockholders; they had held certificates for 150 shares of the capital stock of the corporation, for more than a year. During this time they had received the dividends declared on the shares of stock owned by them, and represented by their certificates. Having received all the benefits arising from the ownership of stock in the Central Bank and Trust Company, it is not unjust that they should now bear their share of the burden imposed by law upon them by reason of their ownership of said stock. The judgment is Affirmed.