Diethelm v. Rainey

WASTE, C. J. The Bank of Oakley, with a capital stock of 250 shares of the par value of $100 per share, was organized on August 20, 1920. Plaintiff, at an undisclosed date, became the owner and holder of one share of its stock. In 1925 he opened a savings account with said bank and made deposits therein. On December 19, 1930, the bank became insolvent, whereupon the Superintendent of Banks in the manner provided by law assumed possession of the bank and undertook to administer its affairs as an insolvent bank. In due time plaintiff filed a claim for his deposits which, at the time of the bank’s insolvency, aggregated $3,718.77. The Superintendent of Banks rejected the claim and this suit followed. Trial was had on an agreed state[246]ment of facts. From a judgment entered in favor of the plaintiff the Superintendent of Banks has prosecuted this appeal.

The disposition of the cause turns oh the construction to be placed on section 21 of the Bank Act as it read in 1930 (1 Deering’s Gen. Laws (1931), p. 237), the pertinent portion of which is as follows: “The capital and assets of such bank are a security to depositors and stockholders, depositors having the priority of security over stockholders.”

It is the appellant’s contention, in substance, that respondent, being a stockholder as well as a depositor, is precluded from participating ratably with other depositors and loses all rights as a depositor until the deposits of those creditors, who are not stockholders, are paid in full. In other words, the appellant urges that the section creates a preference in favor of nonstockholding depositors as against stockholding depositors.

Literally construed, the section as above quoted fails, in our opinion, to create the preference contended for by the appellant. Standing alone, uninfluenced by other considerations, the section draws no distinction between depositors. It broadly creates a preference in favor of all depositors, stockholding or nonstockholding.

Appellant is inclined to agree with this literal interpretation of the section, for in his opening brief he states that “Upon first impression, and without considering the history of section 21, or authorities relating thereto, one would be inclined to doubt that the priority given to depositors by said section was intended to inure only to the benefit of those depositors who are not stockholders. Indeed, one would be disinclined to place that construction upon section 21, unless compelled to do so, because of its effect upon the depositor who has a substantial deposit in the bank, who holds only a nominal stock interest therein and who takes no active part in its management.”