Hiatt v. Howard

Decision Date04 May 1937
Docket Number15361.
Citation8 N.E.2d 136,104 Ind.App. 167
PartiesHIATT v. HOWARD et al.
CourtIndiana Appellate Court

Owen S. Boling and Godfrey D. Yaeger, both of Indianapolis, for appellant.

Jones Hammond, Buschmann & Gardner, of Indianapolis, for appellees.

DUDINE Judge.

This is an appeal from a judgment against appellant in a suit instituted by appellant against appellees. The issue was joined upon a fourth amended complaint in one paragraph. Appellees filed a demurrer to the complaint, which demurrer was sustained, and, appellant declining to plead further judgment was rendered on the demurrer that appellant take nothing by his complaint.

The sole error assigned on appeal is claimed error in sustaining said demurrer to the complaint.

Appellees have filed a motion to dismiss this appeal. The court now overrules said motion.

The complaint, among other things, alleged that the Fort Wayne Avenue State Bank suspended business and went into voluntary liquidation on December 31, 1930; that Albert C. Nobes was appointed liquidating agent and assumed charge of the affairs of the bank and was handling its affairs at the time of the filing of the complaint.

It alleged further that appellant was a depositor of the bank and had money on deposit at the time the bank closed, and that he instituted the action in his behalf and in behalf of all other creditors of the bank.

It alleged further that appellees were stockholders of the bank at the time it closed.

The complaint prayed separate judgments against each of the alleged stockholders in an amount equal to the total par value of their respective shares of stock, and that a "trustee" be appointed to collect said judgments and distribute the proceeds to the creditors of the bank.

The demurrer was based on the ground that the complaint did not state facts sufficient to constitute a cause of action.

In the memoranda supporting the demurrer, appellees contended that the Financial Institutions Act of 1933 (Acts 1933, c. 40) gave the Department of Financial Institutions exclusive power to liquidate banks, and that therefore the complaint did not state a cause of action.

In this appeal appellees rely upon a similar contention, in support of the judgment.

Appellant contends: (First) That as a creditor of the bank he has a right to maintain such an action "even though a receiver may likewise have such authority," citing Gaiser v Buck (1931) 203 Ind. 9, 179 N.E. 1, 82 A.L.R. 1348. (Second) The Financial Institutions Act of 1933 is not applicable to this action because this action was commenced before said act was passed. (Third) Assuming that said act was applicable, the remedy provided thereby was supplementary and not exclusive.

Section 45 of the Financial Institutions Act of 1933 provides: "Except as herein otherwise provided, the sole and exclusive right to liquidate and terminate the affairs of any financial institution to which this act is applicable, shall be vested in the department, and hereafter no receiver, assignee, trustee or liquidating agent shall be appointed for such purpose or for any financial institution or the assets or property thereof by any court, or the judge thereof, or any other person."

Section 240 of said act provides: "The liability hereby imposed upon shareholders in banks and trust companies shall be enforced by the department [of financial institutions] pursuant to the provisions of section 63 of this act."

Section 63 of the said act specifically gave to the Department of Financial Institutions the authority to "enforce the individual liability imposed by law upon the shareholders," and prescribed a procedure to be followed by the department.

We think that the "remedy" provided by said act was intended by the Legislature to be exclusive, and that such intention was clearly expressed in said act, particularly in the sections thereof which we have referred to.

This suit was instituted on June 3, 1932, the demurrer was sustained on March 19, 1934, and the judgment was rendered the next day. The Financial Institutions Act of 1933 went into effect in 1933.

The "right" of a creditor to maintain such an action, as stated in the complaint before us, even though the receiver may likewise have such authority, which right appellant contends was recognized by our Supreme Court in Gaiser v. Buck, supra, was not a "substantive right," but merely a right in adjective law. Appellant's substantive rights were not and will not be impaired by the application of said act, or the denial, as to him, of the right to maintain such action. The relief afforded under said act was substantially similar to the relief which was available prior to its enactment. The act, in effect, merely modified the procedure by which appellant could prosecute his substantive rights against the stockholders of the bank.

"Ordinarily statutes cannot be made to operate retroactively, unless a contrary intention clearly and strongly appears, if by making them so operate vested rights would be affected. Niklaus v. Conkling, 118 Ind 289, 20 N.E. 797...

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1 cases
  • Hiatt v. Howard
    • United States
    • Indiana Appellate Court
    • May 4, 1937
    ...104 Ind.App. 1678 N.E.2d 136HIATTv.HOWARD et al.No. 15361.Appellate Court of Indiana, in Banc.May 4, Appeal from Superior Court, Marion County; Maurice E. Tennant, Special Judge. Suit by Malcolm C. Hiatt, doing business under the name and style of the Hiatt Service Company, against Samuel G......

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