Bates v. Farmers Loan & Trust Co. of Iowa City, 45213.
| Decision Date | 02 April 1940 |
| Docket Number | No. 45213.,45213. |
| Parties | BATES, Superintendent of Banking, v. FARMERS LOAN & TRUST CO. OF IOWA CITY et al. |
| Court | Iowa Supreme Court |
BATES, Superintendent of Banking,
v.
FARMERS LOAN & TRUST CO. OF IOWA CITY et al.
No. 45213.
Supreme Court of Iowa.
April 2, 1940.
Appeal from District Court, Johnson County; Wm. W. Scott, Judge.
From an order overruling special appearance to an application to set aside and vacate order approving final report and discharging receiver and examiner in charge, said examiner in charge has appealed.
Affirmed.
[291 N.W. 185]
Frank F. Messer, of Iowa City, R. S. Milner, of Cedar Rapids, and W. E. Wallace, of Williamsburg, for appellant Ben S. Summerwill.
Fred D. Everett, Atty. Gen., Floyd Philbrick, Asst. Atty. Gen., and Roscoe P. Thoma, of Fairfield, for appellee.
HAMILTON, Chief Justice.
In 1932 the Farmers Loan & Trust Company of Iowa City, Iowa, a banking concern, was, by the District Court of Johnson County, Iowa, in a manner conformable to statute, placed in receivership with L. A. Andrew, the then Superintendent of Banking of the State of Iowa, as receiver. By proper order of court, B. S. Summerwill was named as examiner in charge. Such examiner qualified by giving bond and proceeded to administer said trust. Thereafter, D. W. Bates succeeded Andrew in office and was substituted as plaintiff and as receiver, Mr. Summerwill also being retained as examiner in charge of said receivership. On April 26, 1939, being a day of the regular February, 1939, term of said court, in pursuance to an order of court fixing time for hearing and prescribing notice, the final report of the receiver was approved and the receiver and examiner in charge were, by the court, discharged and released from all liability and their respective bondsmen exonerated. The February, 1939, term of said court adjourned sine die on April 29, 1939. The May term, 1939, of said court opened May 1, and adjourned sine die on September 16, 1939. Thereafter, on October 19, 1939, during the regular September, 1939, term of the Johnson County District Court and in the original receivership case, D. W. Bates, Superintendent of Banking of the State of Iowa, plaintiff in said original cause and former receiver therein, filed in said court what is designated “Petition to Re-Open Receivership”, in which he asked and prayed that the court fix a time for appearance to said petition and prescribe the notice to be given thereof; that, upon hearing, the court enter an order re-opening said receivership; that it vacate the order made on the 26th day of April, 1939, and, particularly, that part thereof wherein the final report of the receiver was approved and the receiver and examiner in charge discharged and released from liability and the bondsmen exonerated. The court fixed the 1st day of November, 1939, at 9 o'clock, A. M., as the time for appearance to said petition and ordered notice to be given by personal service on B. S. Summerwill at least ten days prior to the time set for appearance and further by one publication in the Iowa City Press Citizen, a newspaper published in Iowa City, Iowa, at least ten days prior to the time of appearance. A copy of the notice was submitted to and approved by
[291 N.W. 186]
the court. The notice directed “to Ben S. Summerwill and to any and all creditors of Farmers Loan & Trust Company of Iowa City, Iowa, and any and all persons interested in them” was served and published as by order of the court provided. By subsequent order, agreeable to Summerwill, as shown by stipulation, the date of appearance was extended to November 20, 1939. On this date, Summerwill, through his attorney, filed special appearance in which he challenged the jurisdiction of the court. On December 22, 1939, Bates filed an amendment to his petition but served no further notice of same, and, to this amendment, Summerwill also filed special appearance based on much the same grounds as the first.
The alleged basis for asking the re-opening of said receivership and vacating the order of discharge of said receiver and examiner in charge of said bank is the existence of assets belonging to said receivership which should be accounted for, the existence of which was not discovered until after said order of discharge had been entered. It is charged in said petition that, in handling certain assets belonging to the receivership, the examiner in charge, who was personally interested in the securities involved, was guilty of fraud, either actual or constructive, in thus dealing with himself and thereby obtaining possession of said alleged assets and should be required to account for said property and, to that end, the petition is made for the re-opening of said receivership.
The merits of the controversy are not before us for determination. Reduced to its last analysis, we have for determination only the question of procedure, the appellant contending that the order of discharge was a final adjudication and that the only way of setting aside said final order and judgment is by proceeding under Chapter 552 of the 1935 Code of Iowa; that the court had jurisdiction neither of the person of Summerwill nor of the subject matter of the proceedings. Whereas, the appellee contends that:
“A Receiver is-an officer of the Court-merely the Court's creature or officer-has no implied powers-must prudently preserve and protect the property intrusted to him as an officer of the court-acts for the Court-has no powers save those conferred upon him by the Court's orders-is the arm or hand of the Court-is subject to the Court's directions and orders-cannot stipulate the law adversely to his trust-has no power to make a compromise and settlement-is a representative of the Court-has no authority to waive the rights of those interested in the estate-must act only under the direction of the Court-is a ministerial officer of the Court-really represents the Court and acts only under its direction-his authority is derived from the Court appointing him and he is subject to its order only.
And all funds and property involved in a receivership are ‘in custodia legis,’ the Court itself having the care of the property and the Receiver being merely the creature or officer of the Court in the handling and, or, administering of same.
It is a further well recognized rule that a Receiver is not permitted to derive personal profit or advantage out of his office or the administration of this trust; and that profit or benefit accruing from his management, handling or dealing with the property of his trust must inure to the trust estate; and the Receiver cannot in his personal capacity assert claims or rights against property or funds of his trust adversely to the Court and, or, the persons legally entitled to share in the benefits or distribution thereof.
The Court is not bound by anything its Receiver may do without direction-and the Receiver cannot legally act without direction or authority of the Court.
The Court cannot be bound by a false or fraudulent report of a receiver. Accounting not true, not correct, false or fraudulent, cannot bind the Court. True and correct Accounting must be rendered to the Court.
Courts in handling or dealing with Receivers necessarily can act on their own motion-necessarily must deal with Receivers in a summary manner. And a Court being advised that a Receiver has acted improperly can and does properly take action to compel accounting or correction. The necessities and...
To continue reading
Request your trial