Charter v. Judge

• Decision Date: 01 April 1930
• Docket Number: No. 6754.,6754.
• Citation: 152 S.E. 780
• Parties: CHARTER, Banking Com'r, et al. v. KUMP, Judge, et al.
• Court: West Virginia Supreme Court

152 S.E. 780

CHARTER, Banking Com'r, et al.

v.KUMP, Judge, et al.

No. 6754.

Supreme Court of Appeals of West Virginia.

April 1, 1930.

Syllabus by the Court.

Original proceeding for writ of prohibition by L. R. Charter, Jr., the State Banking Commissioner, and others, against H. C. Kump, Judge, and others.

Writ awarded.

J. M. N. Downes, of Buckhannon, for petitioners.

William T. George, of Philippi, for respondents.

LIVELY, P.

Charles Tenney, a depositor in the People's Bank of West Virginia at Buckhannon, in Upshur county, an insolvent bank in the hands of Receiver Tabler, appointed by the commissioner of banking on March 26, 1929, tiled his bill at September rules, 1929, against the receiver, the bank, its directors and stockholders, on behalf of himself and all other depositors, praying for a discovery of the amount of the assets of the bank in the hands of the receiver; the amount of money on deposit prior to February 5, 1929, which had been returned to the depositors, to whom returned, and the amount to each; the indebtedness of the bank and to whom owing; the disposition of assets since the bank was closed by the commissioner of banking on February 5, 1929; to whom, and for what price; and the amount paid out to any depositor or creditor since February 5, 1929. Also for a disclosure of the names of the directors for six years next preceding February 5, 1929, and the dividends declared and paid by them, and to whom paid during that period; the bonds, amounts, and sureties thereon of the defaulting cashier and assistant cashier, covering that period; and the names of the stockholders and amount of stock held by each. The bill prayed for a reference to ascertain the assets, the debts and priorities, a decree of sale of the assets and disbursement of the proceeds to the creditors; ascertainment of the amounts for which the directors were liable for negligence which caused losses to the bank, and a decree against them; the date the bank became insolvent; the dividends paid to the directors; a decree against the sureties on the bonds of the cashier and assistant cashier; a decree against the stockholders for double the amount of stock held by each, if the assets failed to pay the liabilities; that the assets be distributed by order of the court; that the receiver be enjoined from administering the affairs of the bank except as directed by the court; that he be required to account for all that went into his hands, and that the bill be treated as a general creditor suit, and for general relief. A demurrer to this bill for lack of jurisdiction to entertain it was sustained; and Tenney later filed an amended bill in which he adopted the allegations of the original bill, and asked that H. A. Abbott, commissioner of banking, be made a party, and charging upon information that he (Ab bott) and Tabler, the receiver, had returned to a number of depositors in full the sums deposited by such depositors prior to February 5, 1929, "without authority of law, " without naming any of such depositors or the amounts paid them and when; that the receiver and commissioner of banking had sold to one Worth Johnson the Kelley property, an asset of the bank, for $10,000, whereas the property was worth $20,000, which the receiver and commissioner well knew; that after advertising for sale the banking house, they sold the same at private sale to Traders' National Bank for $15,000 and exchange of a lot, whereas, plaintiff says on information that this property was worth $50,000; and that the receiver and commissioner had no authority to take a lot in part payment; therefore plaintiff and the other creditors were defrauded out of a large sum of money. And the amended bill says that the commissioner and receiver are mismanaging the affairs of the bank, in that they have paid out large sums of money to depositors and creditors without authority of law (without naming any of the said depositors), and in the sale and exchange of the real estate; that said receiver and commissioner are "indifferent" to the plaintiff and other depositors, and that the latter have been defrauded and will be defrauded if the sales of real estate are permitted to stand. Fraud on the part of the receiver and banking commissioner is the gravamen of the amended bill. The prayer is that the commissioner and receiver be restrained from selling the Kelley property to Worth Johnson (who is not a party defendant) at the price of $10,000, and be restrained from selling the banking house to the People's Bank at the price of another lot plus $15,000; and for general relief. A demurrer by nearly all of the defendants to this amended bill was overruled, and L. R. Charter, Jr. (who succeeded Abbott as banking commissioner), and Tabler, receiver, sued out this rule in prohibition on the ground that the court had no jurisdiction to entertain this creditors' bill. The trial chancellor filed a formal return to the rule, and Tenney also made return. It appears that the receiver has collected and paid to the creditors about $272,-000.

The court had not...