Sec. Bank & Trust Co. v. Barnett
| Decision Date | 11 September 1934 |
| Docket Number | Case Number: 24551 |
| Citation | 1934 OK 429,169 Okla. 298,36 P.2d 874 |
| Parties | SECURITY BANK & TRUST CO. et al. v. BARNETT et al. |
| Court | Oklahoma Supreme Court |
¶0 1. Banks and Banking--Liquidation of Insolvent Depositors' Guaranty Fund-- Guaranty Fund Warrants Held to Constitute Preferred Claims Entitled to Payment in Full in Numerical Order.
Under the provisions of section 4162, C. O. S. 1921 (repealed, by chapter 137, Session Laws 1923), the Stale Banking Department was authorized to issue and sell Depositors' Guaranty Fund warrants for the purpose of securing cash to supplement the Depositors' Guaranty Fund, said warrants to bear six per cent. interest from date, and to constitute a charge and first lien upon the Depositors' Guaranty Fund, said warrants to be issued in numerical order and retired in like order. In an action to liquidate the insolvent Depositors' Guaranty Fund, held, that the warrants issued and sold under the provisions of said statute, and while it was in full force and effect, constitute preferred or secured claims against the fund, and that the holders of said warrants are entitled to payment thereof in full in numerical order, together with interest thereon, out of the moneys in said special fund.
2. Statutes -- Rights Accrued Under Repealed Statute not Affected by Repeal.
Under the provisions of section 54, art. 5, of the Constitution, the repeal of a statute does not affect any rights already accrued under such repealed statute.
3. Constitutional Law --Legislature Prohibited From Impairing Obligation of Contract by Repealing Statute Under Which Contract Was Executed.
Under section 10, art. 1, of the Constitution of the United States, and section 15. art. 2, of the state Constitution, the Legislature was prohibited from impairing the obligation of a contract made pursuant to existing provisions of law by a repeal of the provisions of law under which said contract was entered into.
Appeal from District Court, Oklahoma County; Sam Hooker, Judge.
Action instituted for liquidation of Depositors' Guaranty Fund. W. J. Barnett, State Bank Commissioner, receiver. From judgment of district court, the Security Bank & Trust Company and other claimants appeal. Reversed and remanded, with directions.
M. M. Thomas and Ames, Cochran, Ames & Monnet, for plaintiffs in error.
M. B. Cope, Snyder, Owen & Lybrand, W. H. Hills, Jos. I. Pitchford, and Malcolm W. McKenzie, for defendants in error.
¶1 This action was instituted in the district court of Oklahoma county by the Attorney General at the direction of the Governor, and was in the nature of an application for a writ of mandamus to compel the Bank Commissioner and the Banking Board to wind up and liquidate the Depositors' Guaranty fund. The Attorney General alleged that he was bringing suit for the benefit of the Security Bank & Trust Company of Miami, Okla., and for the benefit of all others holding claims against the Depositors' Guaranty Fund of the state of Oklahoma.
¶2 It is alleged that there was in said fund $ 214,057.70 in cash and $ 149,621.90 in Liberty Bonds and other securities, and that there are outstanding and unpaid $ 1,200,000 of Depositors' Guaranty Fund warrants. It is also shown that there was available to said fund $ 1,500,000, consisting of promissory notes and other frozen assets received from various failed banks, which are of doubtful value.
¶3 A number of suits pending in the district court of Oklahoma county by various parties asserting claims against the Guaranty Fund are consolidated with this action, and the Bank Commissioner was appointed receiver to administer, wind up, and completely liquidate the Depositors' Guaranty Fund.
¶4 On March 25, 1930, the court directed that all claims of every kind and character be presented to the receiver on or before June 14, 1930. Pursuant to said notice more than 500 claimants intervened and filed their claims against said fund. The claims presented fell into one of the following named four classes:
¶5 First. Holders of the numerically first outstanding and unpaid Depositors' Guaranty Fund warrants who asserted that they had a first and prior lien upon the Depositors' Guaranty Fund, and that the funds on hand in the Depositors' Guaranty Fund should be applied in retiring the outstanding warrants in their numerical order.
¶6 Second. Holders of outstanding unpaid Depositors' Guaranty Fund warrants who contend that because of the alleged insolvency of the Depositors' Guaranty Fund and the repeal of the Guaranty Fund Law, the funds on hand should be applied to the payment of all outstanding Depositors' Guaranty Fund warrants on a pro rata basis.
¶7 Third. Banks which sought the recovery of certain Liberty Bonds, state bonds, and other securities theretofore pledged by them with the State Banking Board to secure and guarantee the payment of lawful assessments made against them, which securities had never been converted into cash, but were held intact by the Banking Board.
¶8 Fourth. Those who asserted claims against the Depositors' Guaranty Fund, which claims were neither based upon nor evidenced by outstanding Depositors' Guaranty Fund warrants. Those claimants also contended that they should be paid on a pro rata basis along with the warrant holders.
¶9 The court referred the matter to a referee, Hon. John B. Harrison, who made extensive findings of fact and conclusions of law, all exceptions being overruled thereto, and judgment being entered in conformity with the recommendations of the referee.
¶10 Included in the judgment of the district court was an order to return all securities held by the Bank Commissioner and the Banking Board for the purpose of securing payment of the assessments due the Depositors' Guaranty fund, to the parties named in the judgment as being entitled thereto, same being subsequently modified, but no question is raised herein concerning that portion of the judgment, and we shall not notice the same further.
¶11 The court's judgment was further to the effect that the numerically first outstanding and unpaid Depositors' Guaranty Fund warrants did not constitute a first and prior lien upon the fund and its assets' that the outstanding and unpaid warrants should not be paid in their numerical order, and that claims were on a parity with warrants and all claims which had been presented to and allowed by the court should share in a pro rata distribution of the Depositors' Guaranty Fund. It was further adjudged that no interest should be paid on the warrants or any other claims.
¶12 The plaintiffs in error herein are the owners of the numerically first outstanding and unpaid Depositors' Guaranty Fund warrants. The propositions upon which they rely to reverse the judgment of the trial court are as follows:
¶13 The Bank Commissioner, defendant in error, contends that, since the Bank Guaranty Law was repealed by section 10, chapter 137, Session Laws 1923, the various statutes cited and relied upon whereby plaintiffs in error seek to establish their priority to the funds now on hand are not now effective; that the fund being insolvent, the distribution made by the district court, as a trust fund in equity, is equitable and just and should be sustained.
¶14 For the sake of convenience, hereinafter the plaintiffs in error will be referred to as plaintiffs and the defendants in error as defendants.
¶15 The principal question involved herein is whether or not the Depositors' Guaranty Fund warrants held by plaintiffs, being numerically first outstanding, together with interest thereon, are entitled to be paid in full. There is a substantial difference, as we shall hereinafter notice, in the nature of the respective obligations involved herein. The warrants held by plaintiffs were issued under and by virtue of the provisions of a portion of section 4162, C. O S. 1921 (section 6, chapter 22, S. L. 1913), which provides in part as follows:
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...trust funds and not general revenue funds of the state. Our attention is also directed to the case of Security Bank & Trust Co. v. Barnett, 169 Okl. 298, 36 P.2d 874, involved the liquidation of the Depositors' Guaranty Fund, wherein it was held that holders of Depositors' Guaranty Fund War......
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Boswell v. State, Case Number: 27935
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