Hodgell v. Wilde

• Decision Date: 23 December 1937
• Docket Number: 2027
• Citation: 74 P.2d 336,52 Wyo. 310
• Parties: HODGELL v. WILDE, STATE EXAMINER
• Court: Wyoming Supreme Court

74 P.2d 336

52 Wyo. 310

HODGELL v. WILDE, STATE EXAMINER

No. 2027

Supreme Court of Wyoming

December 23, 1937

APPEAL from the District Court of Albany County; V. J. TIDBALL Judge.

Action by William J. Hodgell against A. E. Wilde, State Examiner of the State of Wyoming. Judgment for plaintiff, and defendant appeals.

Modified and Affirmed.

For the appellant, there was a brief and oral argument by Bard Ferrall of Cheyenne.

There was no appearance for respondent.

In the case of Wilde v. Richards, 49 Wyo. 408, this court construed Section 10-130, R. S. 1931, as prohibiting the use of savings department funds for purposes not in connection with that department, citing Reichert v. Trust Company (Mich.) 245 N.W. 808. The fund collected from stockholders is an asset of the insolvent bank. Sec. 10-508 R. S. No part thereof is allocated to the savings department by statute. The Michigan case indicates that assets not allocated to the savings department are general assets of the bank and that savings department depositors do not share in assets other than those in which they have a statutory preference until commercial department depositors and other general creditors have been paid from other assets an equal percentage. See note at page 1483 of 81 A. L. R. The Michigan case last cited seems to be inconsistent with a former decision of the same court in Reichert v. Farmers Savings Bank, 242 N.W. 239. In the case of Lippitt et al. v. Thames Loan & Trust Company, (Conn.) 90 A. 369, it was held that unless rules or statutes forbid, all creditors are treated alike. It was also held that under a certain statute, savings department creditors, after receiving the proceeds of the investments of the savings department, shared ratably with commercial creditors in other assets. In the case of Bank Com'rs. v. Security Trust Company, (N. H.) 71 A. 377, it was held that the capital stock was for the benefit of all creditors and permitted savings department creditors to share in unpledged assets as to so much of their claims as were not satisfied by the application of special funds created for their benefit. In the case of In re Prudential Trust Company, (Mass.) 138 N.E. 702, the fund derived from stockholders' liability was first applied to the claims of savings department creditors, who also had equal claim with other creditors upon the capital and other property of the corporation. This ruling was influenced by a Massachusetts statute. See also Allen, Com'r of Banks, 136 N.E. 269, where a similar rule was announced. In the case of Upham v. Bramwell, Steelhammer v. Same; Doxsie v. Same, (Ore.) 209 P. 100, the court arrived at a similar conclusion. Section 10-130, R. S. was amended by Chapter 113 of the Laws of 1933. The statute, before amended, prescribed an unsound banking rule in requiring the investment of demand funds in long-term securities. The following cases deal with the general subject. State v. Hunt, 57 P.2d 793; State v. Board of Land Commissioners, 58 P.2d 423. It is submitted that the trial court erred in following the plaintiff's contention.

RINER, Justice. BLUME, Ch. J., and KIMBALL, J., concur.

OPINION

RINER, Justice.

This litigation arose in consequence of a disagreement between a savings depositor in a Wyoming state banking institution conducting both a savings department and a commercial department business, which subsequently became insolvent, and the State Examiner as the statutory liquidating officer, concerning the right of said depositor to share in certain funds obtained and to be obtained from the enforcement of a stockholders' statutory liability in the course of the administration of the insolvent bank. The district court of Albany County, in which the case was tried to the court without a jury, rendered a declaratory judgment in favor of William J. Hodgell, the depositor, who had instituted the action as plaintiff to have his rights to share in said funds determined. The State Examiner, as defendant, has brought the record here for review by direct appeal.

There was evidence taken on the trial of the issues made up in the action, and the district court aforesaid made a general finding in favor of the plaintiff and also certain special findings of fact. Inasmuch as no transcript of the evidence appears in the record, we must assume that these findings are upheld by the evidence submitted to the trier of fact. Luman v. Hill, 36 Wyo. 48, 252 P. 1019; Foster v. Fremont Natural Gas Co., 36 Wyo. 436, 256 P. 665; Royal Insurance Co. v. O. L. Walker Lumber Co., 23 Wyo. 264, 148 P. 340. There remains, therefore, only the question whether the legal consequences ensuing from these findings as adjudged by the district court are correct. Summarized the facts thus found are as follows:

The defendant, A. E. Wilde, is and at all times since March 31, 1933, has been the State Examiner of this state, his immediate predecessors in office being John A. Reed, during the period April 27, 1932, to October 1, 1932, and William Reeves, Jr., from October 1, 1932, to April 1, 1933. The First State Bank of Laramie, a banking corporation incorporated and organized under the laws of the State of Wyoming, was engaged in that business in the city of Laramie, Albany County, Wyoming, during all these periods and until April 27, 1932. On the date last mentioned this institution was found to be insolvent by the State Examiner, and he thereupon took charge of it for the purpose of liquidation. He has been in control of its property and affairs ever since.

This bank on and prior to April 27, 1932, under the provisions of Section 10-130 W. R. S., 1931, operated a savings department and also what is commonly known as a "commercial department." The plaintiff at the time the bank passed into the control of the State Examiner was not indebted to, but was a depositor in and had an account in said bank in its savings department, in the amount of $ 342.95, which, upon claim being filed therefor in due course, was approved in the liquidation proceedings as a savings deposit claim, for that amount.

All the claims of every description against said bank allowed by the State Examiner amount to the sum of $ 641,593.72. Of this total amount the sum of $ 216,379.15 represented "preferred or secured claims or claims paid by offset," which were paid in full, $ 7,500.26 of the claims of this character arising in the savings department and $ 208,878.89 being chargeable to the commercial department of the bank. The remaining or unsecured claims for savings department deposits, in which the plaintiff's claim was listed, amount to $ 178,674.47, and those of this character for the commercial department total the sum of $ 246,540.10.

The sum of $ 171.45 has been paid the plaintiff on his claim through declared dividends, or approximately fifty per cent thereof, and there is now due him the sum of $ 171.50. Each creditor of said bank holding an approved claim in said savings department has been paid a similar percentage. On the unsecured commercial deposit claims, however, dividends totaling but thirty per centum have thus far been paid.

As required by Section 10-130, supra, the institution as a going concern had kept separate books for its different departments and had kept the funds deposited by savings department depositors separate from the other funds and investments of the bank, and the dividends heretofore paid these depositors were paid solely from funds derived from the liquidation of the savings department assets. The value of the assets of the savings department in the hands of the State Examiner and undistributed does not exceed the sum of $ 19,000.00, so that when they are all liquidated and disbursed the savings depositors will not receive therefrom dividends totaling more than sixty per cent of the face of their claims. The plaintiff will accordingly receive as his share of such dividends a sum not to exceed $ 205.77.

The remaining assets of the bank, excluding the savings department assets and the statutory stockholders' liability presently to be mentioned, do not exceed $ 30,000.00, and hence the total dividends which will be paid each creditor holding an approved unsecured claim against said bank's commercial department will not exceed forty-two per centum thereof.

The insolvent institution had an authorized capital of $ 100,000, represented by one thousand shares of capital stock of the par value of $ 100.00 for each share. Due to the insufficiency of the assets of the bank which have come into the hands of the State Examiner, it will be necessary to demand payment in full of the statutory stockholders' liability from each stockholder of said bank, which liability amounts to $ 100.00 per share. Even if this liability is liquidated in full, the sum thus realized, together with the other assets of the bank, will be insufficient to pay the bank's creditors in full. Suits have been brought and are pending to collect the statutory stockholders' liability, and the sum of $ 36,864.47 has already been collected by the State Examiner from that source, and he now has that amount in his hands.

The plaintiff has demanded that the State Examiner aforesaid pay forty-two per centum of the amount thus collected, or which may hereafter be collected from the statutory liability of the bank's stockholders upon the unsecured savings department claims, totaling $ 178,674.47, as above stated and that the balance, or fifty-eight per cent thereof, be paid upon said unsecured commercial department claims, totaling $ 246,540.10, for the reason that the unsecured savings department claims comprise forty-two per cent of all the allowed and unpaid claims against said bank. This the State Examiner has refused to do, but intends, unless restrained by the...