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Bell, Secy. of Banking v. Cabalik

Supreme Court of Pennsylvania
Jan 5, 1943
29 A.2d 678 (Pa. 1943)

Summary

In Bell v. Cabalik, 346 Pa. 115, 29 A.2d 678, which was an action to enforce the statutory liability of a stockholder of the very bank involved in the present litigation, the question was raised for the first time as to whether the Secretary of Banking as Receiver of an insolvent banking institution could, either intentionally or negligently, unreasonably postpone the making of an assessment without running afoul of the Statute of Limitations.

Summary of this case from Freeman, Etc., v. Rogal

Opinion

December 3, 1942.

January 5, 1943.

Corporations — Stockholders — Liability — Banks — Trust companies — Merger — Acts of May 13, 1876, P. L. 161 and May 3, 1909, P. L. 408.

1. Where corporations originally formed under the Act of May 13, 1876, P. L. 161, subsequently merge, in accordance with the provisions of the Act of May 3, 1909, P. L. 408, the shareholders of the resultant corporation are not absolved from the individual liability imposed by section 5 of the Act of 1876, in the absence of an express provision to the contrary in the Act of 1909 or the agreement of merger. [116]

2. Harr v. Boucher, 142 Pa. Super. 114; Kirschler v. Wainwright, 255 Pa. 525; Gordon v. Winneberger, 310 Pa. 362; and Bell v. Abraham, 343 Pa. 169, followed. [116]

Argued December 3, 1942.

Before SCHAFFER, C. J.; MAXEY, DREW, LINN, STERN, PATTERSON and PARKER, JJ.

Appeal, No. 156, March T., 1942, from judgment of C. P. Allegheny Co., Oct. T., 1941, No. 3136, in case of John C. Bell, Jr., Secretary of Banking, Receiver of Pittsburgh-American Bank and Trust Company, v. Mary Cabalik. Judgment affirmed.

Assumpsit.

Rule for judgment for want of a sufficient affidavit of defense made absolute, before DITHRICH, McDONALD and ELLENBOGEN, JJ., opinion by DITHRICH, J. Defendant appealed.

George F. Taylor, with him Alter, Wright Barron, for appellant.

Horace Thomas, Jr., with him John W. Lord, Jr., Special Deputy Attorneys General, Orville Brown, Deputy Attorney General, and Claude T. Reno, Attorney General, for appellee.

Frank R. S. Kaplan, with him David Roth, for interested party.

George Wasser, for interested party.


This appeal is from a judgment entered for want of a sufficient affidavit of defense in an action of assumpsit brought by the Secretary of Banking, as receiver of Pittsburgh-American Bank and Trust Company, to recover from a stockholder a stock assessment equal to the par value of her shares.

The questions raised by the appeal are the following: (1) Is the provision for shareholders' individual liability contained in section 5 of the Act of 1876, P. L. 161, violative of Article III, section 3, of the Constitution of Pennsylvania? (2) As applied to banks of deposit organized under the Act of 1876 and acquiring trust powers under the Act of 1919, P. L. 1032, does section 5 of the Act of 1876 contravene section I of the XIVth. Amendment to the Constitution of the United States? (3) Is the claim of the Secretary of Banking barred by the statute of limitations where suit is brought promptly following the making of the assessment but the assessment was not made until more than six years after the Secretary entered into possession of the bank and determined to liquidate its affairs? (4) Where corporations originally formed under the Act of 1876 subsequently merge, in accordance with the provisions of the Act of 1909, P. L. 408, are the shareholders of the resultant corporation absolved from the individual liability imposed by section 5 of the Act of 1876, in the absence of an express provision to the contrary in the Act of 1909 or the agreement of merger?

Questions (1), (2) and (3) must be answered in the negative for reasons considered at length in the opinion of the Superior Court in Harr v. Boucher, 142 Pa. Super. 114, and in our own decisions in Kirschler v. Wainwright, 255 Pa. 525, Gordon v. Winneberger, 310 Pa. 362, and Bell v. Abraham, 343 Pa. 169. Anything that might be said on these points would be merely repetitious. And we all agree that a similar answer must be given on the remaining question. To hold otherwise would result in the anomalous situation that of three corporations organized under the Act of 1876 the stock-holders of the two merged under the Act of 1909 would divest themselves of their statutory liability while those of the third corporation would continue to bear it — and this notwithstanding that the Act of 1909 provides, in section 3, that "all rights of creditors . . . of each of said corporations shall continue unimpaired, and the respective constituent corporations may be deemed to be in existence to preserve the same." We are unable to find in the act any such legislative intent.

Judgment affirmed.


Summaries of

Bell, Secy. of Banking v. Cabalik

Supreme Court of Pennsylvania
Jan 5, 1943
29 A.2d 678 (Pa. 1943)

In Bell v. Cabalik, 346 Pa. 115, 29 A.2d 678, which was an action to enforce the statutory liability of a stockholder of the very bank involved in the present litigation, the question was raised for the first time as to whether the Secretary of Banking as Receiver of an insolvent banking institution could, either intentionally or negligently, unreasonably postpone the making of an assessment without running afoul of the Statute of Limitations.

Summary of this case from Freeman, Etc., v. Rogal
Case details for

Bell, Secy. of Banking v. Cabalik

Case Details

Full title:Bell, Secretary of Banking, v. Cabalik, Appellant

Court:Supreme Court of Pennsylvania

Date published: Jan 5, 1943

Citations

29 A.2d 678 (Pa. 1943)
29 A.2d 678

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