In re Marathon Savings Bank
| Decision Date | 10 January 1924 |
| Docket Number | 35355 |
| Citation | 196 N.W. 729,198 Iowa 692 |
| Parties | IN RE RECEIVERSHIP OF MARATHON SAVINGS BANK. v. MARATHON SAVINGS BANK et al., Appellants BUENA VISTA COUNTY et al., Appellees, |
| Court | Iowa Supreme Court |
SUPPLEMENTAL OPINION OCTOBER 17, 1924.
Appeal from Buena Vista District Court.--JAMES DELAND, Judge.
ACTION to recover on a claim of Buena Vista County, Iowa, and to establish same as a preferred claim against the receiver of the Marathon Savings Bank, an insolvent, and to hold the American Surety Company of New York liable upon its depositary bond given to secure the county and its treasurer against deposits in the said bank. The trial court decreed the claim to be preferred in the sum of $ 22,576.78, as prayed for, and found that the bond of the surety company is a valid, existing obligation; and a conditional judgment was entered against the surety company for any balance not in excess of $ 12,000, the amount of the bond unpaid by said receiver. The receiver was directed to pay at once to the county the amount decreed, from any funds in his possession as receiver of the bank, as a preferred claim. The Marathon Savings Bank and A. L. Whitney, receiver, appeal.
Affirmed.
Heald Cook & Heald and Kelleher & Mitchell, for appellants.
Helsell & Helsell, Bailie & Edson, and Stipp, Perry, Bannister & Starzinger, for appellees.
FAVILLE, J., takes no part.
DE GRAFF, J.
This appeal involves two actions which were consolidated for the purpose of trial and decree, and by stipulation were tried on the same evidence and "as an equity action." The first case noted in the caption was instituted by Buena Vista County, Iowa, and W. C. Skiff, as treasurer of said county, to enforce a claim of $ 22,576.78 in favor of the county against A. L. Whitney, receiver of the Marathon Savings Bank, an insolvent, and the petition was filed in a receivership proceeding as a petition and claim for preference. In this case the American Surety Company intervened.
The second case noted in the caption was instituted by Buena Vista County, and W. C. Skiff as treasurer, as an action at law, against the American Surety Company, upon its depositary bond in the sum of $ 12,000, given to secure the county treasurer as to deposits of the county made through him in the Marathon Savings Bank. In this action both the receiver and the bank were made parties defendant.
Preliminary to the disposition of the first point on this appeal, it may be stated that, on the 22d day of April, 1921, W. W. Bennett, cashier of the Marathon Savings Bank, E. B. Wells, its president, A. L. Whitney, its attorney, and one or two other persons, prepared and signed a petition in equity for the appointment of a receiver for the bank. This action was entitled, "W. W. Bennett v. The Marathon Savings Bank of Marathon, a corporation." Due and timely notice of the hearing was given, and subsequently A. L. Whitney was duly appointed as receiver, and qualified. Whatever power he has exercised or claimed is by virtue of his appointment in the receivership proceedings, predicated on Chapter 12 of Title XVIII of the Code. No party to this action can now be heard to question his standing as such receiver or the jurisdiction of the court in the appointment of him. Section 1877 of the Code, in force and effect at the time of the appointment of the instant receiver, is a permissive statute, and provides that the auditor of state may, with the assent of the attorney-general, apply to the courts for the appointment of a receiver of a bank. It therefore results that the status of acts of the receiver in this case cannot now be impeached.
This being true, the first question to determine is whether the claim of Buena Vista County for tax money deposited with the Marathon Savings Bank is a debt due the county. If the claim of the county constitutes a debt in a legal sense, then the receiver must pay such debt as a preferential claim, by virtue of the statute. Section 3825-a, Code Supplement, 1913. This statute provides the order of claims entitled to priority when the property of any person, company, or corporation is in the hands of a receiver for distribution, and with the exception of taxes or other debts entitled to preference under the laws of the United States, "debts due or taxes assessed and levied for the benefit of the state, county or other municipal corporation in this state" are entitled to priority. This is a salutary statute. It is founded in wise policy, and is a recognition of the fact that the state must endure and the functions of government must not cease. Consideration of what is expedient for the community is of vital concern. It involves the doctrine of social self-defense. It arises from an inarticulate conviction, based on an instinctive preference. Every modern civilized society subordinates the individual to society, and at the same time aims to impose the minimum of sacrifice on its citizens. The statute in question applies to all persons or aggregations of persons, natural or juristic, and finds its foundation in strong sense and stern political morality. It must find application in the instant case.
Section 1877 of the Code provides for the liquidation of insolvent banks by the distribution of the assets thereof "ratably * * * among the creditors thereof, giving preference in payment to depositors." This section does not conflict with the terms of Section 3825-a, Code Supplement, 1913. In the latter statute the legislature contemplated and intended that certain claims should have priority over the claims of depositors and creditors, whether preferred or otherwise among themselves, and in fixing the order of priority, determined that the assets of any corporation in the hands of a receiver for distribution should be subject to the payment of certain claims in a defined order of priority. Under this statute, debts due the county are entitled to preference over depositors or other creditors.
With the view of the situation, it is immaterial whether or not the claim of the county against the receiver is bottomed on a trust theory. There is but one primary question: Is a debt owing by the bank, and now owing by its receiver, in a fixed and liquidated amount? If so, it is entitled to statutory preference. The amount is not in dispute. Clearly, the county is the real party in interest. This is irrevocably established by the pleadings and the proof. In fact, no such question was raised in the trial court, and the ownership of the claim cannot for the first time be raised on appeal. The court decreed that the debt was owing to the county, and established its priority. The decree is res judicata as to the substantive rights of all persons interested in the subject-matter.
The undisputed record facts disclose that the moneys received by the appellant bank were received in payment of taxes to Buena Vista County. The moneys so received consisted of cash and checks delivered to the bank by local taxpayers, who, upon making such payments, were given tax receipts by the bank, which had received them from the county treasurer for that purpose. The funds so received were placed to the account and credit of the county, which was the owner, and which was entitled to all these sums so paid by the taxpayers. Clearly, the money belonged to the county, and clearly, it constituted a debt owing by the bank to the county. A debt includes every obligation by which one is bound to pay money. Swanson v. City of Ottumwa, 118 Iowa 161, 91 N.W. 1048. No one disputes that the bank owed the debt in its entirety.
We conclude from the existing relations that there existed a right of preference in favor of the county, and the decree entered by the trial court is--Affirmed.
SUPPLEMENTAL OPINION.
DE GRAFF, J.
By reason of the emphasis placed by appellant on certain propositions in the petition for rehearing, and by reason of the public importance of the propositions involved, we feel that further opinion is justified. What was the legislative intent in the enactment of the statute giving preferential claims in favor of "state, county or other municipal corporation in this state?" Section 3825-a, Code Supplement, 1913. The statute is specific and explicit. In Lewis v. United States, 92 U.S. 618 (23 L.Ed. 513), it is said:
We reaffirm that the conceded sum established as a claim against the receiver in favor of Buena Vista County is a debt, within the purview of the statute. The receiver is a mere stakeholder. The county is the real party in interest. No one questions the constitutional right of our legislature to give preference to claims as defined by Section 3825-a. In the absence of statute, the right of priority of debts due the state would exist as a prerogative derived from the common law. Our statute is simply declaratory of the common law, which affirms that, when the title of the king conflicts with the title of the subject, the former shall be preferred.
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