Christensen v. Merchants' & Marine Bank of Pascagoula

• Decision Date: 16 October 1933
• Docket Number: 30646
• Parties: CHRISTENSEN et al. v. MERCHANTS' & MARINE BANK OF PASCAGOULA et al
• Court: Mississippi Supreme Court

150 So. 375

168 Miss. 43

CHRISTENSEN et al. v. MERCHANTS' & MARINE BANK OF PASCAGOULA et al

No. 30646

Supreme Court of Mississippi

October 16, 1933

(In Banc.)

1. BANKS AND BANKING.

Banking is business affected with public interest, and Legislature has very comprehensive powers in regulating such business.

2. BANKS AND BANKING.

State superintendent of banks must secure approval of chancery court in liquidation proceedings before he can sell assets of insolvent bank (Code 1930, section 3817).

3. BANKS AND BANKING.

State superintendent of banks need not sell assets of insolvent bank all at one time or at any particular time, but should make such sale as will better promote interests of creditors (Code 1930, section 3817).

4. BANKS AND BANKING.

Liquidation of insolvent state bank should proceed speedily, and assets should be sold for fair and reasonable value (Code 1930 section 3817).

5. BANKS AND BANKING.

Statutes providing for liquidation of insolvent state bank are remedial, and should receive liberal construction (Code 1930 sections 3817, 3792).

6. BANKS AND BANKING.

State superintendent of banks may sell assets of insolvent bank in bulk at any stage in liquidation (Code 1930, section 3817).

7. BANKS AND BANKING.

Depositors of insolvent state bank are not entitled to payment of claims as preferred claims, unless claims were preferred before liquidation (Code 1930, sections 3817, 3792).

8. BANKS AND BANKING.

Depositors in insolvent state bank, who did not consent to sale of assets to reorganized bank, held not entitled to payment of claims in full, giving them preference over other creditors (Code 1930, section 3817).

9. BANKS AND BANKING.

Sale of assets of insolvent state bank to reorganized bank need not necessarily be for cash, but may be made partially on credit or on terms (Code 1930, section 3817).

10. BANKS AND BANKING.

Depositor of state bank makes deposit subject to existing law or to that which may be constitutionally enacted.

11. BANKS AND BANKING.

Petitions or other proceedings by depositors or other creditors affecting liquidation of insolvent state bank should be asserted in liquidation proceedings and not in collateral suits (Code 1930, section 3817).

ANDERSON J., and SMITH, C. J., dissenting.

HON. D M. RUSSELL, Chancellor.

APPEAL from chancery court of Jackson county, HON. D. M. RUSSELL, Chancellor.

Suit by Christen Christensen and others against the Merchants' & Marine Bank of Pascagoula and others. From a decree dismissing the bill, the complainants appeal. Affirmed.

Affirmed.

H. B. Everitt, of Pascagoula, for appellants.

Our contention is, in response to the claim of collateral attack on the decree of the court, that the decree is utterly void as to these complainants and their right to be paid out of these assets, and that any attack can be made on a void judgment or decree, whether direct or collateral.

Root v. McFerrin, 37 Miss. 133, 75 Am. Dec. 49; Stampley v. King, 51. Miss. 728; McKinney v. Adams, 95 Miss. 8, 50 So. 474.

And, particularly, when the proceeding and the judgment or decree attacked is based on the authority of a statute and the jurisdiction is statutory, it is void if not in accord with the statute.

Reinecke v. Reinecke, 105 Miss. 798, 63 So. 215; Reed v. Gregory, 78 Miss. 247, 28 So. 835; Smith v. Gordon, 83 Miss. 654, 36 So. 9; Bradstreet v. Jackson, 32 So. 999, 81 Miss. 233; Meridian L. & P. Co. v. Cator, 103 Miss. 616, 60 So. 657; Vicksburg v. Citizens, 79 Miss. 341, 30 So. 725; Morrison v. Am. Snuff Co., 79 Miss. 320, 30 So. 723; Skirvin Op. Co. v. S.W. Elec. Co., 1105, and notes, pages 1148 and 1159, and as applied to Banks, 7 C. J., page 850, section 854, note 97; 1 Thompson on Corporations, section 378.

The statutes of the state in dealing with insolvent banks are very similar to the Federal system of dealing with such matters through the comptroller of the currency. It appears to be well settled by the United States courts that the comptroller, while required to proceed with liquidation under orders of the federal court, the jurisdiction of the court is limited and the comptroller is not an officer of the court.

Kennedy v. Gibson, 8 Wall. 498; Casey v. Gatti, 94 U. S. S.Ct. 674; U. S. v. Knox, 102 S.Ct. 423; Ex parte Chetwood, 165 U. S. S.Ct. 443, 17 S.Ct. 385.

Where the statute directs the performance of certain things in a particular way or manner it forbids, by implication, every other manner of performance.

Koch v. Bridges, 45 Miss. 260.

The transaction here under scrutiny, sought to be enforced against the appellants against their wishes was a sale of all the assets of the bank in liquidation, not to an "existing solvent bank" but to a new bank organized for the purpose, having no existence, in fact, at the time of this decree we are charged with attacking collaterally.

Neither the superintendent or the court had legal right or authority to thus dispose of and permit these assets to be converted without the consent of all the creditors.

Rumble v. Tyus, 123 Ga. 295, 51 S.E. 420; 7 C. J. p. 753, note 93.

If it shall be found that this action of the superintendent of banks and the decree of the chancellor are void and are not binding as to these complainants and depositors who did not consent, which is the contention here of the appellants, and the new bank, with knowledge of these claims and the absence of consent, took possession of all the assets of the old bank as part of the reorganization plan, and its proceedings to convert same to its own use, we now insist that we have a remedy by direct proceeding against this defendant, the appellee bank.

Morrison v. American Snuff Co., 79 Miss. 330, 30 So. 723, 89 Am. St. 598; Vicksburg Tel. Co. v. Citizens Tel. Co., 79 Miss. 341, 30 So. 725, 89 Am. St. 656.

It is insisted that this action cannot be maintained because the case of the liquidation of the old bank is still a pending cause in the chancery court. That contention might be somewhat plausible if the assets of the old bank were in the custody of the court instead of being in the custody of the bank superintendent, and the court had retained that custody to the extent of retaining its control of the assets and the disposition of same. But the statute makes the superintendent of banks the custodian of the effects of an insolvent bank taken charge of by him. It is only his liquidation proceedings that are to have the approval of the chancery court.

Mize, Thompson & Mize, of Gulfport, for appellants.

Section 3817-1 of the 1933 supplement provides how a closed bank may be reopened, but the decree shows on its face that it was rendered before this law of reopening banks was passed, this section having been approved May 19, 1932, and therefore it has no application, so far as conferring rights upon the appellees is concerned. Therefore, when the chancellor undertook to render the decree on January 23, 1932, to compel a freezing of deposits, he was acting without jurisdiction of the persons of these appellants, and, not having jurisdiction of their persons, the decree is utterly void and could be attacked anywhere, at any time, in any manner, and the appellants are not privies to this proceeding, nor does the liquidator of banks act for them in any representative capacity in undertaking to compel a freezing of deposits, and the only way he could proceed to represent them would be as outlined by section 3817 of the Code of 1930 and section 3847-4 of the 1933 supplement. The language of the supplement is very plain that the superintendent shall have authority "to sell all the assets of such bank to any solvent, existing bank at such price as the superintendent may consider a fair, reasonable value for all such assets, allowing such purchasing bank to assume the full amount due all creditors of the liquidating bank, etc." So the decree of the court is utterly void, because the chancery court did not have jurisdiction of the persons of the appellants and the decree can be attacked anywhere.

15 R. C. L., pp. 835-846; 15 R. C. L., section 328, p. 853.

It is well settled that one relying upon a decree or judgment of the court as a defense must present a valid decree, and parties are bound only by such decree.

Boynton et al. v. Moffett Tunnel Improvement Dist., 57 F.2d 772; Hewitt v. Hewitt, 17 F.2d 716.

Succeeding corporations are not infrequently held liable where there may not be strictly a consolidation. Neither law nor equity will permit one corporation to take all the property of another, deprive it of the means of paying its debts, enable it to dissolve its corporate existence, and place itself practically beyond the reach of creditors, without assuming its liabilities.

Meridian Light & Ry. Co. v. Catar, 103 Miss. 616.

Ford, White & Morse, of Pascagoula, for appellees.

This court has repeatedly held that on a collateral attack, the only question which will be inquired into is whether or not the court which entered the order or decree which is sought to be set aside had jurisdiction to enter it. The courts have gone further, however, on this question, to the extent that they hold that where a decree is collaterally attacked that all the jurisdictional facts are conclusively presumed unless the record affirmatively shows the contrary.

Whitley v. Towle, 141 So. 571, 163 Miss. 418; Federal Reserve Bank v. Wall, 138 Miss. 204; Cotton v. Harlan, 124 Miss. 696.

Under the code the chancery court was amply vested with authority in this matter.

Section 3817, Code of 1930.

Section 3792 of the Code of 1930 has been suspended and re-enacted in the Laws of 1930 at page 26.

Section 3817, Code of 1930, is the section under which the court is given jurisdiction to supervise the...