Insured Sav. and Loan Ass'n v. State ex rel. Patterson

• Decision Date: 04 December 1961
• Docket Number: No. 42023,42023
• Citation: 242 Miss. 547,135 So.2d 703
• Parties: INSURED SAVINGS AND LOAN ASSOCIATION, Norman Gradsky, B. J. Gradsky and Howard Meadors, v. STATE of Mississippi ex rel. Joe T. PATTERSON, Attorney General.
• Court: Mississippi Supreme Court

Page 703

135 So.2d 703

242 Miss. 547

INSURED SAVINGS AND LOAN ASSOCIATION, Norman Gradsky, B. J Gradsky and Howard Meadors, v. STATE of Mississippi ex rel. Joe T. PATTERSON, Attorney General.

No. 42023.

Supreme Court of Mississippi.

Dec. 4, 1961.

Creekmore & Beacham, Jackson, for appellant.

Joe T. Patterson, Atty. Gen., by Rubel Griffin, Asst. Atty. Gen., for appellee.

RODGERS, Justice.

This is an appeal from a final decree of the Chancery Court of the First Judicial District of Hinds County, Mississippi, in which the Chancellor granted a decree enjoining the Insured Savings and Loan Association, a Mississippi corporation, and its officers, Norman Gradsky, President, B. J. Gradsky, Vice President, and Howard Meadors, Secretary-Treasurer, from operating said Savings and Loan Association, and from receiving deposits therein, issuing any stock, withdrawing any funds therefrom, or performing any act or holding out or representing the Insured Savings and Loan Association as a going business concern authorized to transact any business in Mississippi. The Chancellor's final order appointed a permanent receiver for the Insured Savings and Loan Association, and required him to post a $50,000 bond. The Receiver's bond was duly approved and filed.

The decree appealed from was the result of a suit filed by the Attorney General of Mississippi against the aforesaid Insured Savings and Loan Association, its named officers, and Norman Gradsky, B. J. Gradsky, Howard Meadors, Dewey D'Angelo, Roger D'Angelo, and Finley Painter. The bill of complaint filed by the Attorney General on behalf of the State of Mississippi charged that the officers and other defendants conspired to defraud the citizens of Mississippi who had deposited money with the defendant Insured Savings and Loan Association. The bill of complaint enumerated several specific charges as evidence of the general charge of fraud, larceny, embezzlement, and obtaining money by false pretense, and sought an interlocutory injunction against the defendants enjoining them from doing business, accepting deposits and issuing stock, in the business of Insured Savings and Loan Association, and asked that a receiver be appointed pendente lite to take over the business, with the power to liquidate and settle the affairs of the defendant Loan Association. Upon ex parte hearing, the Chancellor entered an order enjoining the defendants from doing business as requested by the Attorney General, and also appointed Frank H. Hagaman as Receiver. The Insured Savings and Loan Association (hereinafter referred to as Loan Association) and its officers were then summoned and they filed a general and special demurrer, an answer, and also a motion to dissolve the temporary injunction. The other named defendants filed their separate answers denying fraud and requesting that they be released.

The court released and discharged all of the defendants before final decree in the case, except the Loan Association and its officers. Mr. Norman Gradsky testified during the trial that he then owned all of the stock in the company, as follows: 'Q. Did I understand you to say that you owned all of the capital stock in Insured Savings and Loan? A. That is right. I said that about ten times, I believe through this trial.'

After the Chancellor rendered his oral opinion at the conclusion of the final hearing, and had given an oral finding of fact on certain questions requested by the attorney for appellant, but before the final decree was entered, he entered a separate order on the 10th day of February 1961. In this order it is stated: 'Defendant Norman Gradsky offered to settle all the matters involved in this cause by advancing to defendant Insured Savings and Loan Association a sum of money, evidenced by its open unsecured non-interest bearing note, sufficient to (a) to pay off and discharge in full all receivership expenses and all accounts payable and (b) to pay in full all such holders of share accounts and time certificates as should desire their money, all on condition that the temporary injunction heretofore issued and served be dissolved, and the defendant Insured Savings and Loan Association be permitted to resume normal business as a building and loan association, and

'The court having carefully considered said offer, is of the opinion that it will be to the best interest of the creditors of the defendant Insured Savings and Loan Association and to the best interest of those who have monies on deposit with the said defendant Insured Savings and Loan Association as evidenced by pass books and by time certificates, and to the best interest of the public that said offer be accepted * * *'

The record does not disclose what happened to this offer of settlement, and this offer of settlement and order is pointed out here so as to connect chronologically the acts of the court shown by the record with the orders entered by the court after final decree.

After this case reached this Court on appeal, a motion was filed by appellee, State of Mississippi, ex rel., Attorney General, asking this Court to 'docket and dismiss' this appeal upon the ground that the decree of the Chancery Court under date of March 20, 1961, 'has been vacated and is not a final decree within the meaning of Sections 1147 and 1945, Miss.Code 1942', and in support of this motion, the appellee offered certified photostatic copies of court records showing that, (a) Insured Savings and Loan Association and Norman Gradsky, together with Southern Life and Surety Insurance Company and on Glen M. Graham, petitioned the Chancery Court to direct the receiver to turn over the Insured Savings and Loan Association, all of the property of the Association, except such money as was necessary to pay off all accounts payable and receivership expenses, and to permit the defendant Loan Association to resume normal business as a loan association; (b) the certified photostatic court record of the Receiver's answer in which he offered no objection to the request of the petition; (c) a photostatic certified court record of the order of the Chancellor directing the receiver and appellants to proceed to turn over the property and assets of the Loan Association; (d) a certified photostatic copy of the court record of the petition of the Receiver stating that all of the conditions and agreements have been consummated, that Glen H. Graham has purchased 55% of the stock of the Loan Association; that Norman Gradsky, B. J. Gradsky, and Howard Meadors have resigned as directors of the corporation and that new officers have been elected, and that Southern Life and Surety Insurance Company has deposited $100,000 worth of municipal bonds to insure payment of the time certificates due the depositors.

Appellants do not deny, and in effect admit, the truth of the evidence offered with the motion to docket and dismiss, but say that these petitions and decrees are administrative in nature, entered for the purpose of protecting and preserving the assets of the receivership, and are mere steps in execution of the final decree of March 20, 1961.

The so-called 'motion to docket and dismiss', with the attached evidence, has brought to the Court's attention the following factual situation: (1) Norman Gradsky, B. J. Gradsky and Howard Meadors have resigned and are no longer parties to this cause of action as officers of the defendant-corporation; (2) Norman Gradsky has sold 55% of his stock to one Glen E. Graham, and they both signed a petition to the Chancellor asking the court to permit the Loan Association to resume normal business; (3) that the order enjoining the Loan Association from doing business has been abrogated, the injunction, in effect, dissolved, since the Loan Association is permitted to resume normal business; and (4) that all parties requested the Chancellor to 'pay the receivership expense' and to turn over to the Loan Association all of its assets except 'such amount of cash as is necessary to pay off and discharge * * * all receivership expense', and appellants could not now be heard to complain of the court's order paying such expenses.

The final decree of March 20th ordered that (a) the affairs of the Loan Association have been badly mismanaged by the officers thereof, that the Loan Association is insolvent; (b) that a conspiracy to defraud the investing public by the officers of the Loan Association has been proven, and damage has been done and will continue to be done if the defendants who are the officers are allowed to continue to operate the business; and (c) the injunction is made permanent, and the receiver is made permanent and required to post a bond. It is apparent that all of this has been removed and settled except to discharge the Receiver, and advising appellants whether there has been fraud in the affairs of the company; whether or not the suit was properly brought; and whether or not the Insured Savings and Loan Association was insolvent. The order of the court to discharge the Receiver is ministerial and will follow as a matter of course upon his final report. All of the foregoing issues have been settled, and there is nothing left for this Court to pass upon.

The Supreme Court has no power to render advisory opinions. McLendon v. Laird, 211 Miss. 662, 52 So.2d 497; Van Norman v. Barney, 199 Miss. 581, 24 So.2d 866, 25 So.2d 324; Shelton et al. v. Ladner, Secretary of State et al., 205 Miss. 264, 38 So.2d 718; Gipson v. State, 203 Miss. 434, 35 So.2d 327, 36 So.2d 154.

The general rule that an apellate court will not entertain an appeal after the interest of the parties has terminated is stated in 2 Am.Jur., Appeal and Error, Sec. 151, p. 943, as follows: 'Although a party may have had an appealable interest at the commencement of a suit, if his interest has terminated before judgment, he cannot, as a general rule, appeal. Thus, a party to an action who, after judgment, conveys all his...