Biltrite Bldg. Co. v. Elliott

We are not concerned with, and are not considering in this case, the question whether the federal Court had jurisdiction and power to take over and administer the affairs of a state bank in process of liquidation. We are considering solely the question whether that Court has power to authorize and direct the receivers appointed by it to receive and liquidate the general assets of the bank, to demand, receive, and administer the proceeds of the stockholders' liability to the depositors of the bank.

Prior to the passage of the Act of the General Assembly of South Carolina, approved March 16, 1929, some confusion existed as to the proper method of enforcing the collection of the liability of the stockholders of a defunct bank to the depositors thereof. Since the adoption of the Constitution of 1895, and its construction as it relates to *Page 544 the matter under discussion, it has been the recognized law of this jurisdiction that the stockholders' constitutional and statutory liability was not an asset of the bank, but that it inured solely to the benefit of the depositors. In a number of cases this Court has held that: "The liability of stockholders to depositors, under the Constitution and statute, is not an asset of the bank, but is the basis of an individual, personal, joint right in the depositors, with which the corporation, or its receivers, or its board of liquidating trustees have absolutely nothing to do."

Since neither the Constitution nor the statutes laid down, nor suggested, the appropriate legal process by which the depositors could enforce the collection of this liability, there arose uncertainty and confusion there about. Thereupon this Court announced the opinion that there was vested in the depositors the right to bring their action in the nature of a creditors' bill to collect the stockholders' liability. In such proceedings it was the custom to have appointed a receiver, or receivers, to hold and disburse the funds thus collected. The distinction between the receiver of the general assets of a bank and the receiver of the funds collected on the stockholders' liability was clearly understood, and was recognized by this Court in the case of Ex parte Rizer, 165 S.C. 487,164 S.E., 131.

Thus the matter stood when the Act of 1929 was passed. Section 6 of that Act provides: "That any receiver appointed to liquidate the assets of any closed state bank shall, underthe authority of this Act, when it is necessary to * * * have full power and authority to demand of such stockholders," etc.

In the case of Branchville Motor Co. v. Adden, 158 S.C. 90,155 S.E., 277, this rule is laid down: "Natural and safe guide to legislative intent in passing statute is statutory and judicial status of subject at time of enactment." The italicized words in the above paragraph construed in the light of "the statutory and judicial status of the subject" would seem to *Page 545 be susceptible of but one reasonable interpretation, viz., that it would thereafter be unnecessary to appoint two receivers — one of the general assets of the bank and one of the funds derived from the stockholders' liability — because this Act provided that any one of the receivers (there might be one or more) appointed under it to take charge of and liquidate the general assets of the bank should also have power and authority to enforce the collection of the stockholders' liability.Any receiver empowered to collect and liquidate the general assets of a closed bank, and the funds derived from the stockholders' liability, must first be named by the general creditors and depositors of the bank, and approved by the Court of Common Pleas. Without the imprimatur of this approval and appointment by the Court no receiver of the general assets could touch the funds derived from the stockholders by the enforcement of this constitutional and statutory liability. That the receivers appointed in this case by the federal Court to take control of and liquidate the general assets of the bank were of the opinion that that appointment did not carry with it the authority to them to collect and distribute the stockholders' liability fund is made manifest by the fact that they applied to the federal Court for an order which should specifically give them such power. That that Court was without power to grant such order is made plain by the able main opinion in this case.

I concur in that opinion.