Baker v. Williams & England Banking Co.

• Decision Date: 24 November 1902
• Citation: 42 Or. 213,70 P. 711
• Parties: BAKER v. WILLIAMS & ENGLAND BANKING CO. LADD et al. v. GILTNER et al. SAME v. BAKER et al.
• Court: Oregon Supreme Court

70 P. 711

42 Or. 213

BAKER v. WILLIAMS & ENGLAND BANKING CO. LADD et al. v. GILTNER et al. SAME v. BAKER et al.

Supreme Court of Oregon

November 24, 1902

Appeal from circuit court, Marion county; R.P. Boise, Judge.

Action by J.A. Baker against the Williams & England Banking Company. On objections by Ladd & Bush, creditors, to the claims of E.C. Giltner, Phil Metschan, J.A. Baker, and W.H. Odell other creditors. From an order disallowing interest on the claims of Giltner and Metschan, they appeal, and from an order granting interest on the claims of Baker and Odell Ladd & Bush appeal. Affirmed.

On November 14, 1895, the Williams & England Banking Company, a corporation engaged in a general banking business at Salem in this state, suspended payment, and in a suit brought for that purpose a receiver was appointed, with power to convert its assets into cash for the payment of its obligations, and to wind up its affairs. On January 3, 1896, by order of the court, the receiver published a notice to creditors requiring all persons having claims against the bank to present the same to him, with proper vouchers, within 90 days from the date of such notice, and also notifying the creditors, stockholders, and all other persons interested, to appear within a specified time, and file objections, if any to the allowance of claims so presented. In pursuance of this order, claims were presented by Ladd & Bush for $10,000, and interest thereon at 10 per cent. per annum, evidenced by two promissory notes; E.C. Giltner, agent, for $25,000, on five noninterest-bearing certificates of deposit, issued by the bank to sundry persons, and by them assigned to Giltner; Phil Metschan, as state treasurer, for $8,013.60, due on open account; E.J. Swafford, city treasurer of Salem, $7,349.33, on open account; and W.H. Odell, clerk of the state land board, for $5,047.27, on open account. On July 3, 1896, the receiver reported to the court a list of all claims filed with him, including those above mentioned,--stating, however, that none of the latter bore interest, except the claim of Ladd & Bush,--and asking for an order of distribution of the funds then in his hands. On the hearing of such report, the receiver and Ladd & Bush appeared by their respective attorneys, and, no objections having been filed to the claims so presented, it was "ordered, adjudged, and decreed that said claims be allowed as presented and reported to this court by said receiver"; describing them particularly, as in the receiver's report. It was also ordered that "claims in which interest has been provided for by the terms of the obligation shall bear interest, at the rate of interest stated herein, from the date of each claim as stated herein," and that the receiver pay out of the funds then in his hands, on each of the claims so allowed, a dividend of 38 per cent., including interest on the interest-bearing claims to the date of the failure of the bank. The order is silent, however, as to whether interest should be allowed on the noninterest-bearing claims, except that it is specified therein that they bore no interest. Thereafter the receiver continued to pay dividends on the principal of the claims so allowed, and in December, 1901, having enough money on hand to pay the principal of such claims and leave a balance to be applied on interest, he petitioned the court for instructions as to the payment of interest thereon. Ladd & Bush thereupon filed objections to any further payments of principal or interest on the claims of Giltner and Metschan, because such claims represent funds of the state of Oregon improperly loaned to and deposited with the insolvent bank by Metschan, as state treasurer, for a consideration by way of interest to be paid to him, and such funds are the property of the state. They also object to the allowance of interest on the claim of Odell, for the reason that the amount thereof was deposited by him with the bank while acting as clerk of the state land board, or on that of Swafford, for the reason that it represents money belonging to the city of Salem, which he wrongfully and unlawfully allowed to accumulate in his hands; and they object generally to the allowance of interest on any claim other than those bearing interest by contract. In support of their objections, they aver that under their contract they are lawfully entitled to receive the full amount due them, principal and interest, and that there will not be sufficient funds to pay such amount and interest on noncontract interest-bearing claims. Metschan and Giltner demurred to the objections of Ladd & Bush, and, their demurrer being overruled, they answered separately. Metschan, by his answer, denies that, at the time the claim referred to in the petition was filed by him with the receiver, the money represented thereby, or any part thereof, was state funds, and denies that the money was ever loaned to the bank, or improperly or unlawfully placed with it, and, as a bar to this proceeding, pleads the order and judgment of the court made in July, 1896, allowing his claim as presented. Giltner answered, denying that the claim as presented by him was for money loaned to the defendant corporation by the treasurer of the state of Oregon, and denying positively that any of the money represented thereby was state funds at the time the claim was presented by him to the receiver, and, for a further defense, pleading as a bar to this proceeding the judgment and order of the court made in July, 1896, allowing his claim. He then sets up affirmatively the issuance by the bank of the certificates of deposit to his several assignors, and the assignment thereof to him. Swafford, and Baker, his assignee, filed an answer, in which they deny that the funds, or any part thereof, represented by the claim of Swafford, was for money loaned to the bank, but aver that it was the property of the city of Salem, deposited with the bank for safe-keeping, and payable on demand; that Baker was one of the sureties upon the official undertaking of Swafford, and after the claim had been presented and allowed by the court he made a settlement with the city, and thereupon it and Swafford assigned to him the whole of the claim, and he is now the bona fide owner and holder thereof. Odell answered, denying some of the allegations of the petition, and alleging, in effect, that the claim, as presented by him to the receiver and allowed by the court, was for moneys tendered to him in the capacity of clerk of the state land board by various citizens of the state, in the form of checks, drafts, and post-office orders, which he placed with the bank for collection, with intent, as was his usual custom, to withdraw from the bank at the end of the month, and pay over to the state, all of the money officially accepted and receipted for by it; that he had no personal interest in the fund, and received no interest from the defendant on account of the deposits; and that, on the failure of the bank, he borrowed on his individual and personal credit, and immediately paid to the state treasurer, for the use and benefit of the different funds to which it properly belonged, the whole of the amount due the state from him on account of said deposits. A reply was filed by Ladd & Bush to the answers of Giltner and Metschan, denying the force and effect of the order or judgment of July 3, 1896. Motions for judgment on pleadings were afterward overruled, and evidence was taken and submitted to the court, which made its findings to the effect that the consideration and basis for the claims of Giltner and Metschan were funds of the state of Oregon improperly deposited with and loaned to the defendant corporation for interest, contrary to the laws of the state, and thereupon ordered and directed that no interest be paid upon either of said claims, but overruled the objection as to other claimants. From this order, Metschan and Giltner and Ladd & Bush appeal.

BEAN, J. (after stating the facts).

It is contended by Metschan, Giltner, Odell, and Baker that the order of July 3, 1896, allowing their claims against the insolvent estate, and directing the payment of a dividend thereon, is a conclusive adjudication of all questions sought to be litigated on this appeal. It is familiar law that an issue once adjudicated in a court of competent jurisdiction cannot be again litigated between the same parties or privies, and the judgment thereon is conclusive in another action on the same demand not only as to every matter that was actually litigated, but as to every other question that might have been litigated. Neil v. Tolman, 12 Or. 289, 7 P. 103; Morrill v. Morrill, 20 Or. 96, 25 P. 362, 11 L.R.A. 155, 23 Am.St.Rep. 95. An order or decree of a court of equity regularly made in the matter of the receivership of an insolvent estate, upon the petition of a creditor, allowing or disallowing a claim payable out of the fund in the hands of the receiver, is within this principle. It has twice been practically so held by this court. The question first arose in Rockwell v. Bank, 35 Or. 303, 57 P. 903, in which a creditor of the bank petitioned the court for an order requiring the receiver to list its claims, and that it be permitted to participate in the dividends theretofore declared and thereafter to be declared. The petition was denied, and, on a motion to dismiss an appeal from the order, it was held that it was final on the rights of the petitioner, because "it effectually and finally determines its right to participate in any dividends of the insolvent bank, whether declared before or after the entry of the order, and precludes the possibility of...