Inglewood Federal Savings & Loan Ass'n v. Richardson

• Decision Date: 28 April 1954
• Docket Number: No. 16096.,16096.
• Citation: 121 F. Supp. 80
• Court: U.S. District Court — Southern District of California
• Parties: INGLEWOOD FEDERAL SAVINGS & LOAN ASS'N et al. v. RICHARDSON et al.

121 F. Supp. 80

INGLEWOOD FEDERAL SAVINGS & LOAN ASS'N et al. v. RICHARDSON et al.

No. 16096.

United States District Court, S. D. California, C. D.

April 28, 1954.

FitzPatrick & Whyte, John P. Whyte, Los Angeles, Cal., for plaintiffs.

William F. McKenna, Los Angeles, Cal., and Robert H. Finch, Inglewood, Cal., for B. K. Richardson, J. R. Williams, and Al E. Kadner, original defendants.

William F. McKenna, Los Angeles, Cal., and Robert H. Finch, Inglewood, Cal., for Charles Bellante, Dan Williams, Roy A. Patterson, Marion Cunningham, Fletcher Smith and Mac McMann, named as Doe defendants in the original complaint.

William F. McKenna, Los Angeles, Cal., and Robert H. Finch, Inglewood, Cal., for Russell Chase, Joseph Wall, Alan Rice and F. M. Van Norman.

Charles K. Chapman, Long Beach, Cal., for George W. Trammell.

Sylvester Hoffmann, Los Angeles, Cal., Walter S. Binns, Moore, Trinkaus & Binns, Los Angeles, Cal., for Home Loan Bank Conservator, John M. Kleeb, as Conservator for Inglewood Federal Sav. & Loan Ass'n.

TOLIN, District Judge.

The complaint and counter-claims herein assert several causes of action designed to litigate various questions of management and control of plaintiff Savings and Loan Association. Plaintiff is chartered under Section 5 of the Home Owners' Loan Act of 1933, 12 U.S.C.A. § 1464. The Court has directed that the several causes of action stated in the complaint and counter-claims be dismissed because jurisdiction to determine the various controversies is exclusively with the Federal Home Loan Bank Board. The Court's Memorandum was filed April 16, 1954. The formal order of dismissal has not been signed and the Court is now concerned with its duties and powers respecting compensation for a conservator and his attorney appointed by the Court to act during a brief pendente lite period. This action was originally filed in the Superior Court of the State of California where a temporary restraining order was issued prohibiting defendants from doing several threatened acts. The suit was removed to this Court. Primarily, the case involves a quarrel between two factions, each seeking control of Inglewood Federal Savings and Loan Association.

Following removal and after a period of less than one week, counsel for plaintiffs and counsel for some of the defendants appeared together in the Chambers of this Court on a Friday morning, peremptorily and without previous announcement to the Judge. Each of the warring factions insisted, through such counsel, that it was the true and lawfully elected directorate of the Corporation and each counsel asked the Judge informally whether he would entertain motions for extraordinary writs, each side asserting unlawful action by the other in current corporate management. It appeared that two groups of persons severally and antagonistically claimed to be the real directors and officers, each claiming to be entitled to sole possession, management and control of the assets including the going, active, home loan banking business of the Association, together with its savings accounts. It was represented to the Court that each of these groups were in possession of the Association's building; that they slept in the banking rooms, took meals there, sought to (and did) manage the physical properties and banking business. There was great confusion. Semi-violence flared. Riot was prevented only by local municipal police action. Conflicting orders were given personnel. Commercial banks were about to dishonor checks because of lack of knowledge of which group of officers were entitled to sign checks. Depositor confidence was so shaken that a run had begun. It was apparent that the Association had been unable to, or at least had not, properly regulated the conduct of this fight for control of the Association; and at the time it had sought the protection of judicial process, its banking rooms had become a scene of confusion, bedlam and lack of depositor confidence, some elaboration of which is set forth in the stenographic report of proceedings in this case.

When the Judge indicated a tentative view that the case was one for administrative action by the Home Loan Bank Board in Washington, D. C. and was not within the jurisdiction of this Court, one group of litigants claimed that the administrative remedies had been exhausted and that jurisdiction vested in the Court. Both groups asserted that the Home Loan Bank Board was without a quorum of officials available for action until the following Monday. Each group claimed that the Court should preserve the integrity of the institution. It was pointed out that over one-half of the Friday banking day, a half-day banking day on Saturday, and Monday morning were in prospect as ordinary business periods during which the Association was required by law to be open for business and prior to the earliest expected availability in Washington, D. C. of the proper supervising agency.

The Court declared that it would, upon the first available occasion, proceed to inquire into and determine whether it had jurisdiction over the matters either as claimed or otherwise. The Court further announced that, in the interval, until such determination was made, it would not entertain the suggested applications for various extraordinary writs; but that, in view of the immediately...