Elwood v. First Nat. Bank of Greenleaf

• Decision Date: 10 May 1889
• Parties: GEO. S. ELWOOD v. THE FIRST NATIONAL BANK OF GREENLEAF, KANSAS
• Court: Kansas Supreme Court

21 P. 673

41 Kan. 475

GEO. S. ELWOOD v. THE FIRST NATIONAL BANK OF GREENLEAF, KANSAS

Supreme Court of Kansas

May 10, 1889

Error from Washington District Court.

THE opinion states the case.

Judgment reversed.

Frame & Bland, for plaintiff in error.

Rossington Smith & Dallas, and Joseph G. Lowe, for defendant in error.

VALENTINE J. JOHNSTON, J., concurring. HORTON, C. J., not sitting.

OPINION

VALENTINE, J.:

This was an action brought in the district court of Washington county by George S. Elwood, against the First National Bank of Greenleaf, in said county, for the purpose of having a receiver appointed to take charge of the affairs of the bank and for other purposes. The action was commenced on October 18, 1888, by filing a petition properly verified by the oath of the plaintiff, and also by filing a precipe for a summons, and having a summons issued in the case. On the same day a receiver was appointed in the case by the probate judge of the county. The notice of the application for the appointment of the receiver was served only upon one of the directors of the bank. The sheriff stated in his return of the notice that he could not serve the same upon the president, cashier, or other chief officer of the bank, for the reason that they were all absent from the county. The president, who was also the general manager of the bank, was absent from the state. The service of the summons was not made until the next day, to wit, October 19, 1888. It was then served upon T. J. C. Smith, the president of the bank, who had then returned to the county. On the same day the receiver filed his bond, took the oath of office, and entered upon the discharge of his duties as receiver. On November 17, 1888, the defendant answered. On November 21, 1888, after giving proper notice, the defendant presented a motion to the judge of the district court at chambers, to set aside the order appointing the receiver, and to discharge the receiver, and for an order that the property in the hands of the receiver should be returned to the defendant; and the judge sustained the motion and ordered accordingly. This order was filed in the case on November 22, 1888; and to reverse this order the plaintiff below, as plaintiff in error, brings the case to this court.

The defendant in this case was and is a national bank under the laws of the United States, and the plaintiff was and is a stockholder therein. At the time of the commencement of this action, the bank, by the consent of all the officers, was in process of voluntary liquidation, and T. J. C. Smith, the president, had the charge and management thereof. It is also alleged by the plaintiff that the bank through the gross mismanagement of its officers had become insolvent, and that its officers and managing agents were then fraudulently squandering its assets, and that unless relief were immediately granted great and irreparable injury would ensue to the stockholders, among which was the plaintiff. The main and principal object of the action was to obtain the appointment of a receiver to take charge of the affairs of the bank until its affairs could be finally settled; but the plaintiff also asked for and obtained the appointment of a provisional or temporary receiver to take charge of the affairs of the bank pendente lite. The order appointing this provisional receiver was afterward set aside by the order of the judge of the district court at chambers, and the receiver discharged; and of this order of the judge of the district court, and of this order alone, the plaintiff in error now complains. It would seem at first view that the order appointing the receiver was right, and that it should have been permitted to stand; but the defendant claims otherwise, and urges many objections to the order, and gives many reasons why a receiver should not have been and should not be appointed in the case. We shall consider these objections and reasons in their order.

I. It is claimed that the receiver was appointed before any action was commenced in the district court. This does not so appear from the record. It appears from the record that both these things took place on the same day, and presumably in their proper order. But as all were done on the same day, could it make any difference which parts of the same were attended to first?

II. It is further claimed that the appointment of the receiver was ex parte, and without notice to the defendant. This in legal contemplation is true; for the notice that was actually served upon one of the directors of the bank cannot be considered as a notice to...