Booth v. State
| Citation | 63 S.E. 502,131 Ga. 750 |
| Parties | BOOTH et al. v. STATE et al. |
| Decision Date | 16 December 1908 |
| Court | Supreme Court of Georgia |
Syllabus by the Court.
Where pending a receivership, the result of an equitable suit by the state against an insolvent bank, an intervention is filed by the state, alleging that the bank at the time of its failure was indebted to the state in a certain amount, and said indebtedness was entitled to a preference over other debts due by the bank, and praying for a judgment of the court establishing such preference and requiring the receiver to pay off such indebtedness out of money in his hands as assets of the bank, to which intervening petition certain creditors, depositors of the bank, who were duly made parties to said suit, file their answer, denying any priority in favor of the state's claim, and setting up other facts as matters of defense, and a hearing is had, and upon the evidence submitted a judgment is rendered, in vacation before the appearance term, upon the issues thus made by the pleadings, establishing the priority of the debt due the state, and ordering the receiver to pay over to the State Treasurer money in his hands as assets of the bank on said debt, such judgment is not interlocutory, but final in its nature, and is void for want of jurisdiction in the court to render the same.
[Ed Note.-For other cases, see Judgment, Cent. Dig. § 389; Dec Dig. § 212. [*] ]
The state is entitled to priority of payment out of the assets of an insolvent bank which is a state depository, as against individual creditors and depositors. There is nothing in the act creating state depositories, or the acts amendatory thereof, that changes or modifies this right of the state.
[Ed Note.-For other cases, see Banks and Banking, Dec. Dig. § 80 [*]]
Acts of negligence or wrong conduct, even if such exist, on the part of a state officer, cannot be pleaded as an estoppel to prevent the state from asserting its right to collect a debt.
[Ed. Note.-For other cases, see Estoppel, Cent. Dig. § 152; Dec. Dig. § 62. [*] ]
An intervening creditor in an equitable suit takes the pleadings as made by the original party as he finds them when made a party. thereto; and, where it appears that there has been a waiver of process by appearance and pleading to the original suit, he cannot urge the objection that there is no process or waiver of the same.
[Ed. Note.-For other cases, see Parties, Cent. Dig. § 74; Dec. Dig. § 47. [*] ]
In ordinary suits in law or equity, failure to state in the petition to what term of the court the same is returnable would not authorize the dismissal of the case.
[Ed. Note.-For other cases, see Pleading, Cent. Dig. § 99; Dec. Dig. § 44. [*] ]
A petition in equity that asks for the appointment of a receiver to take charge of an insolvent bank, and to wind up its affairs, and also prays for a judgment allowing the state bank examiner, who is in charge of the bank, to retain money out of the assets of the bank to pay off a debt claimed by the state, is not subject to the criticism that no final judgment is asked or relief prayed for.
[Ed. Note.-For other cases, see Receivers, Dec. Dig. § 32. [*]]
Error from Superior Court, Fulton County; W. D. Ellis, Judge.
The Attorney General, in behalf of the State, having instituted a suit for the appointment of a receiver of the Neal Bank and to wind up its affairs, the State intervened, alleging that the bank was a state depository and its claim entitled to a preference. To this intervention S. Booth and others, as creditors and depositors of the bank, filed an answer denying the preference. Judgment for the State, and Booth and such others bring error. Reversed, with directions.
A state is not estopped from asserting its right to collect a debt on account of negligence or illegal conduct of its officers.
The directors of the Neal Bank, a corporation doing a banking business in Fulton county, Ga., voluntarily placed said bank in the hands of the state bank examiner, R. E. Park, who took charge of its affairs, and, after investigation, reported to the Governor that the bank was not in a position to resume business and liquidate its indebtedness. Under instructions from the Governor, the Attorney General, in behalf of the state, instituted suit in Fulton superior court for the appointment of a receiver to take charge of the affairs of said bank, and to wind up its business for the benefit of its depositors, creditors, and stockholders. This suit was predicated on an act of the General Assembly approved August 22, 1907, and was filed on the 24th day of December, 1907, and was answered by the Neal Bank on the same day, in which answer the facts alleged in the petition were admitted to be true, and the defendant joined in the prayer for a receiver. The court appointed the Central Bank & Trust Corporation receiver to take charge of said bank on the 9th day of January, 1908. The state filed an intervention in said suit, alleging that said bank was a state depository, and was at the time of its failure indebted to the state in the sum of $204,375.98, of which sum $192,502.90 was money deposited by the State Treasurer, and $11,871.08 was deposited by the tax collector of De Kalb county as taxes due the state. This intervention on the part of the state set up the claim that this indebtedness was a preferred claim and a superior lien on the assets of the bank, and the prayer was made that the court direct and authorize the receiver to pay to the State Treasurer the amount of this indebtedness out of the funds in his hands as assets of the bank. Upon this petition a rule nisi issued, calling upon the receiver to show cause on the 13th day of January, 1908, why the prayer should not be granted. To this intervention of the state S. Booth et al., as creditors and depositors of said bank, filed their answer, denying that the state was a preferred creditor, and setting up other facts as matter of defense why said money should not be paid out as asked by the state. Before the merits of the case were passed upon, counsel for Booth et al. moved the court (1) to defer and postpone the hearing, because the case was not ripe for hearing, the same being a petition for final judgment and decree for the distribution of money, and the court having no authority to pass upon a final judgment and decree in vacation, or before the trial term of the case in which the intervention was filed; (2) to dismiss the original bill, because there was no process attached, and no process prayed for, and because said case was not made returnable to any term of the court; (3) to dismiss the intervention of the state, for the same reasons above stated. All of these several objections were overruled, and the court proceeded to hear the case on its merits. Upon hearing, after evidence submitted, the court rendered judgment in favor of the state, adjudicating that the state had a preference or lien on the assets of the bank superior to depositors and creditors to the extent of $192,502.90, and that the receiver pay this amount, deducting the amount due on a note of the state, held by the receiver, for the sum of $25,000.
Upon this decree error is assigned, upon the ground that the same was contrary to law and to evidence, and also upon several grounds based upon the contentions of the plaintiffs in error that the judgment rendered was not interlocutory, but final in its nature, and that the court had no authority to render the same in vacation before the trial term of said case. This judgment was rendered in vacation prior to the trial term, and prior to the appearance term. The case was filed less than 20 days before the January term of Fulton superior court. Upon the hearing of said intervention the following was proved: The Neal Bank was a state depository under the laws of Georgia. Said bank was placed in the hands of the state bank examiner. The Central Bank & Trust Corporation was appointed its receiver on December 24, 1907. At the time of the appointment of said receiver the state of Georgia had to its credit on deposit in said bank, subject to check, the sum of $192,502.90. On March 1, 1904, the Neal Bank was commissioned as a state depository in the city of Atlanta, by order of the Governor, for a term of four years. Said bank qualified and gave bond, in terms of the law, in the sum of $100,000, and entered upon the performance of its duties, and acted under such commission from March 1, 1904, up to December 23, 1907, and gave no additional bond. R. E. Park was State Treasurer and state bank examiner, and as such bank examiner had not made or caused to be made any examination of the Neal Bank since September 10, 1906. R. E. Park, as said bank examiner, was causing an examination to be made of the Neal Bank on December 19, 20, and 21, 1907. On said dates the said bank examiner, by his two assistants, was in the Neal Bank, and while they were making their said examination of said bank R. E. Park, as State Treasurer, deposited in said bank on December 20, 1907, the sum of $85,432.96, and on December 21, 1907, the sum of $10,521.35, and on this last-named date the depositors made a run on said bank, and it suspended payment and closed its doors. The Neal Bank had made large and excessive loans to its officers and to companies in which its officers were interested.
The State Treasurer as state bank examiner had these facts reported to him in an examination made September 10, 1906, in the following language: ...
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