Et At. v. Sayre

• Decision Date: 06 March 1917
• Docket Number: No. 3213.,3213.
• Citation: 79 W.Va. 763
• Parties: B. C. Alleman et at. v. T. J. Sayre, Rec'r, etc. et al.
• Court: West Virginia Supreme Court

79 W.Va. 763

B. C. Alleman et at.

v.T. J. Sayre, Rec'r, etc. et al.

No. 3213.

Supreme Court of Appeals of West Virginia.

Submitted February 27, 1917.

Decided March 6, 1917.

1. Equity General and Joint Demurrer Effect.

A general and joint demurrer of two or more defendants to a bill in equity showing a cause of action against some of them, does not reach the question of the propriety of the joinder of one of them. (p. 765).

2. Banks and Banking Commissioner of Banking Suit Against

Beceiver.

Leave of the Commissioner of Banking, to sue a receiver of an insolvent bank, appointed by him, is not essential to the institution or maintenance of a suit against him. (p. 765).

3. Same Beceiver Preference Parties.

The general creditors of an insolvent bank are not necessary parties to a suit against the receiver thereof, having for its purpose establishment of a right of preference in payment out of the assets of the bank in his hands, (p. 766).

4. Equity Parties Creditors.

Having no title to the assets nor any lien thereon, such creditors are not persons interested in the subject matter of the suit, within the meaning of the equity rule requiring all persons so interested to be made parties, (p. 766).

5. Banks and Banking Deposits Checks Effect.

Entries made by a bank officer, on the deposit of a check, draft or other similar paper, importing creation of the relation of debtor and creditor between the bank and the depositor, prove, in the absence of evidence to the contrary, an assignment of the instrument deposited, to the bank; but they are provisional, and such assignment subject to the right of rescission, in the absence of circumstances precluding exercise thereof, and the relation of debtor and creditor is not irrevocably established until the money for which the deposited paper calls has been actually collected, (p. 767).

6. Same Deposits Agent for Collection Betum of Check.

If, before such collection has been made, the bank fails and closes its doors to business, it is deemed in law to have been the agent of the depositor for collection of the money evidenced by the deposited paper, in the absence of circumstances precluding restoration of the status quo by the depositor, and the latter, on making such restoration, is entitled to have the paper returned to him, on demand therefor before collection by the receiver, and to have the full amount collected thereon, if the receiver has collected it before such demand is made. (p. 769).

7. Same D eposits Beceiv er Divid end.

Acceptance of a dividend from the receiver, on such a demand, after it has been made and while the depositor is insisting upon payment of the claim as one entitled to preference, is not a waiver of the right of preference, nor does it estop the latter from assertion thereof, (p. 770).

Error to Circuit Court, Jackson County.

Proeeding by R. C. Alleman and another against T. J. Sayre, receiver, etc., and others. Decree denying plaintiff's right of preference in distribution of assets, and they appeal.

Reversed in part, and decree for plaintiffs.

Warren Miller and N. C. Prickett, for appellants. J. L. Wolfe and T. J. Sayre, for appellees.

Poffenbarger, Judge:

The alleged vice in the decree appealed from, is its denial of the plaintiffs' claim of right to preference of the debt due them, in the distribution of the assets of an insolvent bank, on any of the four grounds asserted as bases of the claim, namely, (1) insolvency of the bank, on the date of the deposit; (2) fraud on the part of the cashier in receiving the deposit with knowledge of the insolvency of the bank; (3) non-collection of the check deposited, before closure of the bank; and (4) the character of the deposit, the plaintiff claiming it to have been special.

There is but little controversy as to the facts. At about twenty minutes before noon of May 14, 1915, the plaintiffs deposited in the Bank of Ravenswood, their certified check for $750.00, drawn on the First National Bank of Parkersburg, in favor of a member of their firm, and, at the same time, obtained a certified check from the Bank of Ravenswood for $576.35, drawn by themselves, in favor of the Town of Ravenswood, and, on the next day, May 15, 1915, at about eight o'clock A. M., an assistant state banking commissioner took full charge and control of the assets and affairs of the bank and closed it, because of its insolvency, and irregularities in the management thereof. The occasion of the deposit of the larger check and procurement of the smaller one, was the purpose of the depositors, Alleman and Alleman of Parkersburg, W. Va., to file the latter with their bid for the contract for the construction of certain sewers for the town of Ravenswood. The contract having been let to some other person or firm, the check they filed with the city authorities was returned to them. The assistant banking commissioner, finding the check of Alleman and Alleman for $750.00 among the other papers of the bank, endorsed it, collected it through the Jackson County Bank and paid it to T. J. Sayre, receiver of the Bank of Ravenswood, appointed by the state banking commissioner. On June 7, 1915, Alleman and Alleman returned their check on the Bank of Ravenswood to the receiver thereof, for cancellation, and it was cancelled by him and returned to them, June 11, 1915. A twenty-five per cent, dividend was distributed among the creditors of the bank, January 18, 1916,. in which Alleman and Alleman shared to the extent of $187.50, which was credited on their claim of $750.00.

The sufficiency of the bill making the receiver, the commissioner of banking and one James M. Wease, another depositor claiming a right of preference, parties defendant, was challenged by demurrer, on four separate grounds: (1) misjoinder of the commissioner of banking; (2) institution of the suit against the receiver, without the consent of the commissioner of banking; (3) non-joinder of the creditors and depositors of the bank; and, (4), disclosure on the face of the bill, of the receiver's admission of the bank's indebtedness to the plaintiffs in the amount claimed.

None of these positions are well taken. If the commisisoner of banking is an improper party, it would have been the duty of the court to dismiss the bill as to him, on his separate demurrer thereto; but the general and joint demurrer of all of the defendants did not reach such an objection.

The statute, sec. 81a VIII, ch. 54, Code of 1913, ser. sec. 3058, impliedly sanctions a suit against the receiver of an insolvent bank, appointed by the commissioner of banking, and it omits any requirements of an application to the appointing officer, for leave or consent to institute such a suit. It makes it the duty of the receiver, on the order of the commissioner to pay ratable dividends of the money in his hands, on all such claims as may have been proved to his satisfaction or adjudicated in a court of competent jurisdiction. The status of a receiver appointed by an executive officer is not analogous to that of one appointed by a court in a judicial proceeding, for the latter is under judicial control and the property in his hands is actually subject to judicial power. An unauthorized suit against him would be an encroachment upon the court's jurisdiction of the subject matter of the suit in which he was appointed. For these reasons, a receiver appointed by a court cannot be sued without leave of the appointing court. In the case of a receiver appointed by an executive officer, pursuant to law, the property he takes charge of has not been brought within the jurisdiction of any court, by procedure against it. There is no seizure or attachment of the judicial power. The commissioner having the power of appointment is an executive officer and the receiver appointed is a state officer of subordinate authority, charged with duty of administration of the funds in his hands, in acordance with law. Such is the status of a receiver of a national bank, appointed by the comptroller of the currency. Stevens v. Bernoys, 44 Fed. 835; Price v. Abbott, 17 Fed. 506; Thompson v. Pool, 70 Fed. 725. Whether he is technically an officer or not, he is subject to judicial control in the execution of his powers, and is not himself a judicial officer. Both he and his chief must obey and execute the law as interpreted and applied by the courts, and the reason for requiring procurement of leave from a court, to sue its receiver, wholly fails in his case.

The third ground of demurrer involves an erroneous assumption respecting the relation of general creditors to the assets of the bank. They are not interested in the subject matter of the suit, within the meaning of the equity rule requiring all interested persons to be made parties. They have no title to the assets nor any lien thereon. The receiver holds the title as fully and completely as an administrator holds that of the personal estate of a deceased person. Scott v. Armstrong, 146 U. S. 499, 507; Bank v. Colby, 21 Wall. (88 U. S.) 609; Bank v. Bank, 136 U. S. 223; Bank v. Bank, 141 Ind. 352; Hayes v. Kenyon, 7 R. I. 136; McGregor v. Bank, 124 Ga. 557; Weslosky v. Quarterman, 123 Ga. 312. Though the assets constitute a trust fund for the benefit of the creditors, the receiver's plenary power and authority over them make him a complete...