State ex rel. Howell v. Bank of Glenrock

• Decision Date: 01 March 1927
• Docket Number: 1291
• Parties: STATE ex rel HOWELL, Atty. Gen., v. BANK OF GLENROCK (SCHULTZ et al., Interveners.) [*]
• Court: Wyoming Supreme Court

253 P. 665

36 Wyo. 125

STATE ex rel HOWELL, Atty. Gen., v. BANK OF GLENROCK (SCHULTZ et al., Interveners.) ^[*]

No. 1291

Supreme Court of Wyoming

March 1, 1927

APPEAL from District Court, Converse County; CYRUS O. BROWN, Judge.

Action by the State of Wyoming, on the relation of David J. Howell Attorney General, against the Bank of Glenrock, for dissolution and appointment of a receiver. F. M. Dumm was appointed receiver and duly qualified, and Robert Schultz and others, depositors of the bank, intervened, seeking the removal of the receiver. From a judgment dismissing their petition, the interveners appeal.

Affirmed.

John D Dawson, for appellants.

Dumm is an interested person within the meaning of Section 6185 C S.; Robinson v. Dicky, 143 Indiana 214. Bank directors are liable in an action at law; 5150 C. S. Savings accounts must be invested in a designated manner; 5211 C. S. Dumm, the present Receiver, was former cashier of the bank; interested persons may intervene in actions of this class; 5593 C. S.; Magee Banks and Banking, 3d Ed., 624 A; Bank v. Whitehead, (Ind.) 49 N.E. 592; 39 L. R. A. 725. Persons appointed Receivers of insolvent banks should be disinterested parties; Booth v. Clark, 17 How. (U.S.) 330; Baker v. Backus, 32 Ill. 79; Ry. Co. v. Ry. Co., 46 Vt. 792; Shannon v. Hanks, 88 Va. 338. They should not be appointed to represent the peculiar interests of one class; Ry. Co. v. Ry. Co., 58 F. 278. Persons, whose interests might influence the administration of the trust, should not be appointed; Meier v. Ry. Co., 5 Dill. (U.S.) 476; Watson v. Bettman, 88 F. 825; Thompson v. Hooaday, 15 Ore. 34. Nor one whose duty or position, already assumed or occupied, may conflict or be inconsistent with his duties as Receiver; Banneson v. Bill, 62 Ill. 411; Kilgore v. Hair, 19 S.C. 488.

C. Leonard Smith, for respondent.

The petition for removal of the Receiver is based upon his alleged interests, and not upon account of any act committed since his appointment; the Receiver is not disqualified by reason of his former connection with the bank; 34 Cyc. 143; McGilliard v. Foundry Works, (La.) 104 So. 254. Interveners asquiesced in the appointment, thereby waiving objections; 34 Cyc. 162; Tardy's Smith on Receivers, Vol. 11, 2105; Woods v. Bank, (Colo.) 199 P. 964; State v. Court, (Wash.) 152 P. 1. Interveners are estopped; Reneau v. Lawless, (Kan.) 100 P. 479. Questions of removal are discretionary; Simmons Co. v. Waibel, 11 L. R. A. 267. No abuse of discretion is shown by the testimony in this case; citations of authorities by counsel for interveners, on the principle that Receivers should be disinterested parties, do not seem to be in point for the reason that the rule against interest is subject to various exceptions.

BLUME, Chief Justice. POTTER, J., and KIMBALL, J., concur.

OPINION

BLUME, Chief Justice.

The Bank of Glenrock, a banking corporation, suspended business on the 14th day of February, 1924. On August 2, 1924, an action was brought in the District Court of Converse County by the State of Wyoming, on the relation of the Attorney General, against said bank, asking that the banking corporation be dissolved and placed in the hands of a receiver. After notice was given to the bank, and upon a hearing on the petition aforesaid, and on August 4, 1924, F. M. Dumm, the cashier of the bank at the time of its suspension, was appointed receiver thereof. He duly qualified as such receiver on the 11th day of August, 1924, giving a bond in the sum of $ 25,000 for the faithful performance of his duties. On September 30, 1924, the interveners herein filed a joint petition of intervention, alleging that they were depositors in said Bank of Glenrock and asking for the removal of the receiver, upon grounds hereinafter mentioned. F. M. Dumm filed an answer to such petition. The matter was heard on October 30, 1924, and the court held that no grounds existed for such removal and dismissed the petition of the intervenors. From this order of dismissal the intervenors have appealed to this court.

1. It is claimed in the first place that the court erred in appointing F. M. Dumm, and, therefore, also accordingly erred in not removing him. It is urged that Dumm was interested in the receivership matter and was, therefore, disqualified to act as receiver by section 6185, W. C. S. 1920, which provides that "no party, attorney or person interested in an action shall be appointed receiver therein except by consent of the parties." No interested person should, accordingly, be appointed receiver unless the parties to the action consent. It may be questioned whether the intervenors, depositors in the bank, were parties to the action in the sense that their consent was necessary to the appointment. In the case of State ex rel. v. Superior Court, 87 Wash. 603, 152 P. 1, the court said:

"It is plain that the relators here were not named as parties in the original receivership case. The plaintiff in that case was the State of Washington, upon the relation of the attorney general. The defendant was the Raymond Trust Company, an insolvent banking corporation. While the creditors of the banking corporation are no doubt interested in the result of the receivership proceeding, they are not parties to that action. They are, at most, quasi parties, interested only in the proceeds of the assets of the insolvent corporation."

Let it be conceded, however, for the purposes of this case, that the intervenors were parties in the sense that their consent was necessary. It appears that some of them gave such consent--how many is not shown. It is clear that those who gave it cannot complain of the appointment, and inasmuch as we are unable to tell from the record which of the intervenors may and which of them may not complain, relief on the ground stated must necessarily be denied to all.

2. Three other grounds for the removal of Dumm are discussed in the brief of counsel for appellants. The first ground is based on the fact that, at the time of the filing of the petition of intervention, he was cashier of the First State Bank of Douglas, and that he kept the money which he had collected as receiver, amounting to approximately $ 12,000, in that bank. If the First State Bank of Douglas is, however, not a proper depositary of this money, the court, upon application and a showing of that fact, will, doubtless, make a proper order safeguarding the funds, and we are unable to see why the receiver should be removed on the ground stated.

Again it is claimed that the receiver should have been removed because Dumm, prior to his appointment as receiver, was a trustee of School District No. 15, situated in the town of Glenrock, and that, as such trustee, he permitted the funds of the district to be deposited in the Bank of Glenrock,...