Hanson v. Sogn

• Decision Date: 05 April 1926
• Docket Number: 5713.
• Citation: 208 N.W. 228,50 S.D. 44
• Parties: HANSON v. SOGN et al.
• Court: South Dakota Supreme Court

208 N.W. 228

50 S.D. 44

HANSON v. SOGN et al.

No. 5713.

Supreme Court of South Dakota

April 5, 1926

Appeal from Circuit Court, Clark County; W. N. Skinner, Judge.

Foreclosure proceeding by Emil O. Hanson against A. M. Sogn and others. From an order granting plaintiff's motion for appointment of receiver, defendants First State Bank of Vienna, A. L Bambenek, examiner in charge, and another, appeal. Reversed.

Loucks Hasche & Foley, of Watertown, for appellants.

Hanten Hanten & Henrikson, of Watertown, for respondent.

GATES P. J.

This is a companion case to Hanson v. First State Bank of Vienna (No. 6033) 208 N.W. 227. Reference is made to the opinion in that case for many of the facts in this. In the foreclosure complaint allegations appear to the effect that the conditions of the mortgage had not been performed, in that a $1,000 installment note, due March 1, 1923, had not been paid, and that the mortgaged property had been sold at tax sale for the nonpayment of the 1922 taxes, and it was also alleged that the mortgaged property was insufficient to discharge the mortgage debt, viz., that, while the mortgage with unpaid interest amounted to $13,000, the value of the mortgaged property was only $9,600. These allegations were supplemented by affidavit, which, together with the complaint in the foreclosure, were the basis of a motion for the appointment of a receiver. A hearing on the motion was had, in which the superintendent of banks was represented by counsel with the result that an order was made excluding the superintendent from the possession of the property and appointing a receiver with the following powers:

"(1) To demand, collect, and receive all rents for said premises or any part thereof, due and unpaid by tenants, or others, or hereafter to become due. (2) To rent or lease from time to time, not exceeding the period of 12 months from and after the sale of the mortgaged premises, under and pursuant to any decree of foreclosure which may be entered herein, all or any part of said premises, and to keep the buildings thereon insured and in repair, and to pay the taxes and assessments upon said premises now accrued and delinquent, or to accrue and become due during his receivership. (3) To bring and prosecute all proper actions for the collection of rents due on said premises, as well as all necessary actions and proceedings for the removal of all tenants in default, or other persons, from said premises, and to bring and prosecute all proper actions for the protection of said premises, or to recover possession thereof, or to preserve the same from waste."

From this order the superintendent of banks appeals.

Section 2475, Rev. Code 1919, provides for the appointment of a receiver:

"2. In an action by a mortgagee for the foreclosure of his mortgage and sale of the mortgaged property, where it appears *** that the conditions of the mortgage have not been performed, and that the property is probably insufficient to discharge the mortgage debt."

In view of the decisions in Roberts v. Parker, 85 N.W. 591, 14 S.D. 323, Sherman v. Wichner, 152 N.W. 700, 35 S.D. 436, and Sherman v. Harrisburg Loan Co., 194 N.W. 652, 46 S.D. 497, the order appealed must be affirmed, unless the statutory provisions above quoted are qualified by the powers and duties imposed upon the superintendent of banks by the banking laws.

The whole theory of the laws relating to the department of banking is that the exclusive possession and control of the property of an insolvent bank are in the superintendent of banks, subject to the authority of the circuit court of the county of the bank's domicile. Rev. Code 1919, §§ 8928, 8930, 8931, 8934, 8936, 8976; chapter 103, Laws 1925. Hanson v. First State Bank, 208 N.W. 227, decided herewith. In other words, the insolvent bank is really in custodia legis. The only diminution of the court's power as compared with a statutory receivership is that it does not appoint the superintendent of banks nor his...