Andrew v. Sac County State Bank

• Citation: 218 N.W. 24,205 Iowa 1248
• Decision Date: 14 February 1928
• Docket Number: 38309
• Parties: L. A. ANDREW, State Superintendent of Banking, Appellant, v. SAC COUNTY STATE BANK et al., Appellees
• Court: United States State Supreme Court of Iowa

218 N.W. 24

205 Iowa 1248

L. A. ANDREW, State Superintendent of Banking, Appellant, v. SAC COUNTY STATE BANK et al., Appellees

No. 38309

Supreme Court of Iowa, Des Moines

February 14, 1928

REHEARING DENIED MAY 11, 1928.

Appeal from Sac District Court.--J. A. HENDERSON, Judge.

Action to establish preference for ward's funds deposited by guardian in bank before its doors were closed and the receiver appointed therefor. The district court granted the relief, and the receiver appeals.

Reversed.

John Fletcher, Attorney-general, Earl F. Wisdom, Assistant Attorney-general, and Robert Elmer Long, for appellant.

W. H Hart, for intervener, R. L. McCord, appellee.

KINDIG J. STEVENS, C. J., and EVANS, MORLING, and WAGNER, JJ., concur. FAVILLE, DE GRAFF, and ALBERT, JJ., dissent.

OPINION

KINDIG, J.

This proceeding was determined entirely upon a stipulation of facts filed by the parties May 24, 1926, as follows:

"Come now the above-named intervener and the above-named plaintiff as receiver of the defendant bank and stipulate that the following facts are and shall be considered as evidence and proven facts in the trial of this cause.

"1. Petition in the above-entitled cause was filed by the above-named plaintiff on or about November 25, 1925, asking for the appointment of a receiver for the defendant bank for the purpose of liquidating said bank, and upon said date the said L. A. Andrew, who was and is the superintendent of banking of the state of Iowa, was appointed as such receiver, and that he duly qualified and is still acting as such.

"2. That the intervener is the duly appointed and qualified guardian of Bernice Brown; that said Bernice Brown is a minor; that the intervener was such guardian at all the times herein referred to; and that during said times and until on or about November 19, 1925, he was also guardian of Bethel Brown, an older sister of said Bernice Brown; that he was discharged as guardian of Bethel Brown, who had attained majority, on or about November 19, 1925.

"3. That on or about November 7, 1925, there came into the hands of the intervener as guardian of said Bernice Brown and Bethel Brown, in payment of a loan of guardianship funds theretofore made, the sum of $ 3,069.89, said payment being made in the form of two checks drawn upon the defendant bank.

"4. That the intervener had not theretofore, either as guardian, or individually, kept an account with or been a customer of the defendant bank.

"5. That the intervener, on November 7, 1925, took said checks, amounting to $ 3,069.89, to the defendant bank, and said to the officer of said bank who attended upon him that he had said checks; that they represented money belonging to his wards, Bernice Brown and Bethel Brown; that he was about to make settlement with Bethel Brown, who had attained majority; that he had resigned as guardian of Bernice Brown and that as soon as his resignation was accepted and his successor appointed he would make settlement with such successor; that he desired to deposit said funds for the purpose of effecting such settlements, and that as they were effected the money would be withdrawn for the purpose of paying the same over to the said Bethel Brown, and to his successor as guardian of Bernice Brown, respectively; and that this would be done within a few days; and at said time the bank accepted and received said checks so drawn upon it, in the aggregate sum of $ 3,069.89, and issued a deposit slip for such amount to the intervener as guardian as aforesaid.

"6. That said deposit was so made without the guardian having made application to the court for authority to so deposit the same, and without any order of court authorizing the guardian to deposit said funds, or any other funds, in said bank.

"7. That said funds so deposited comprised the entire estate of his wards in the guardian's hands; and they owned no other property except a small amount of personal effects and stocks of defunct companies, of no value.

"8. That thereafter the intervener withdrew from said bank for the purpose of effecting settlement with Bethel Brown the sum of $ 1,314.33, of which amount $ 1,308.33 was paid to Bethel Brown and $ 6.00 was paid to the clerk of the court for his costs. Said withdrawals were made by check on said deposit.

"9. Meanwhile, and on November 7, 1925, the intervener, as guardian as aforesaid, had filed his final report, resignation and application for discharge, and, after hearing thereon the court entered an order, which was filed on November 19, 1925, discharging the guardian as to Bethel Brown, and further ordering as follows:

"' * * * as to Bernice Brown, minor, his report is approved and all his accounting found to be correct and all payments made for said minor out of her estate and money in his hands are hereby approved; and it is further ordered that upon the appointing of a new guardian for the said Bernice Brown and his qualifying as required by law, and the said R. L. McCord settling with the said new guardian for the funds and estate of the said minor Bernice Brown he shall be and is discharged as such guardian and released from any and all further duties and obligations in the said guardianship and his bonds released and his bondsmen released from all further duties and liabilities herein.'

"10. That at the time said order was filed and until the evening of the 20th day of November the intervener was out of the city attending to his duties; and on the 21st day of November, 1925, the defendant bank failed to open; that no successor as guardian of Bernice Brown has yet been appointed.

"11. That of the moneys remaining in said defendant bank after the withdrawal of said sum of $ 1,314.33 as above stated, $ 25.00 was allowed the guardian for his compensation, and the balance, $ 1,730.56, belonged to his said ward, Bernice Brown, and was the amount required by the final report and the aforesaid order to be paid over by the intervener to his successor as guardian of the said Bernice Brown before his discharge should become effective.

"12. That at all times on and after the making of the deposit aforesaid, and up to and including the date of the suspension of the bank and the appointment of the receiver, the bank had not less than $ 3,500 of cash in vault, and that not less than $ 3,500 thereof passed into the actual possession of the receiver.

"13. That the intervener, within the time fixed for the filing of claims, duly filed his proof of claim and petition of intervention in said cause; that thereafter, and on or about the 22d day of March, 1926, the receiver filed his report and therein rejected the intervener's claim to a preference, but allowed the same as a depositor's claim; and that within the time fixed for filing objections to said report the intervener duly filed objections thereto upon the grounds and by reason of the facts alleged in his said proof of claim and petition of intervention. * * *

"15. The only question for determination is whether, upon the facts herein stipulated (and upon any other facts which may be offered in evidence upon the trial), the intervener is entitled to have his claim allowed as a preference in the amount of $ 1,730.56, the sum so belonging to his said ward, Bernice Brown. As to the balance, $ 25.00, allowed the guardian for his compensation, no claim to preference over depositors is asked. And if the intervener is so entitled to preference as to said sum of $ 1,730.56, his claim therefor shall be established accordingly. If he is not so entitled to preference the intervener's claim shall be established as a depositor's claim in the sum of $ 1,755.56."

I. A motion to dismiss the appeal was filed, based upon the lack of authority of the receiver in the premises to bring the controversy to this court.

Primarily, such objection is founded upon the theory that a "receiver" is impartial in the performance of his duties, and therefore it is no concern of his whether or not one creditor obtains a preference or the right to a prior payment over another. Upon this general proposition the following authorities may be considered: Bank of Montreal v. C., C. & W. R. Co., 48 Iowa 518; State Cent. Sav. Bank v. Ball-Bearing Chain Co., 118 Iowa 698, 92 N.W. 712; State ex rel. Havner v. Des Moines Union Stock Yards Co., 197 Iowa 987, 197 N.W. 1009; First Nat. Bank v. White Ash Coal Co., 188 Iowa 1227, 176 N.W. 287; Hirning v. Hamlin, 200 Iowa 1322, 206 N.W. 617; 1 Clark on The Law of Receivers, Section 676; 2 Tardy's Smith on Receivers 2134, Chapter 29; High on Receivers (4th Ed.), Section 264a; 34 Cyc. 447, Paragraph 3; 3 Corpus Juris 653, Section 552; Cobbs v. Vizard Inv. Co., 182 Ala. 372, 62 So. 730; Bosworth v. Terminal R. Assn., 80 F. 969; Sutton v. Weber, 100 Ill.App. 360; Frey v. Shrewsbury Sav. Inst., 58 Md. 151; Foreman v. Defrees, Brace & Ritter, 120 Ill.App. 486; Chicago Title & Tr. Co. v. Caldwell, 58 Ill.App. 219; Edwards v. Western Land & Power Co., 27 Cal.App. 724 (151 P. 16); Dorsey v. Sibert, 93 Ala. 312 (9 So. 288); First Nat. Bank v. Bunting & Co., 7 Idaho 27 (59 P. 929); Account of Correll, 283 Pa. 277 (129 A. 104); Knabe v. Johnson, 107 Md. 616 (69 A. 420); State ex rel. Sparks v. State Bank & Tr. Co., 36 Nev. 526 (137 P. 400); McKinnon v. Wolfenden, 78 Wis. 237 (47 N.W. 436); Battery Park Bank v. Western Carolina Bank, 127 N.C. 432 (37 S.E. 461); State ex rel. Miller v. People's State Bank, 22 N.D. 583 (135 N.W. 196); Cameron v. City Bank of York, 284 Pa. 187 (130 A. 407); How & Co. v. Jones, 60 Iowa 70, 14 N.W. 193; First State Bank v. Oelke, 149 Iowa 662. Bank of Montreal v. C., C. & W. R. Co., supra, contains this language:

" * * * he [the receiver] is uniformly regarded as an officer of the court, and, being such, the fund or property intrusted...