State v. Beals

• Citation: 55 S.W.2d 1005
• Decision Date: 12 December 1932
• Docket Number: No. 17697.,17697.
• Parties: STATE ex rel. FARMERS' EXCHANGE BANK OF GALLATIN, DAVIESS COUNTY, et al. v. BEALS, Judge, et al.
• Court: Court of Appeal of Missouri (US)

55 S.W.2d 1005

STATE ex rel. FARMERS' EXCHANGE BANK OF GALLATIN, DAVIESS COUNTY, et al. v. BEALS, Judge, et al.

No. 17697.

Kansas City Court of Appeals. Missouri.

December 12, 1932.

"Not to be published in State Reports."

Original proceeding by the State of Missouri, at the suggestion and relation of the Farmers' Exchange Bank of Gallatin, Daviess County, and others, for a writ of prohibition to be directed to the Honorable Ira D. Beals, Judge of the Circuit Court of Daviess County, Missouri, and others.

Preliminary rule quashed, and proceedings dismissed.

L. A. Warden, of Trenton, Dean H. Leopard, of Gallatin, Ed. C. Hyde, of Kansas City, and L. B. Gillihan, J. W. Alexander, and Dudley & Brandom, all of Gallatin, for relators.

Platt Hubbell, of Trenton, J. Hubert Fuller, of Princeton, and Sam T. Evans, of Gallatin, for respondents.

BLAND, J.

This is an original proceeding in prohibition, by which the relators seek to prohibit the Honorable Ira D. Beals, Judge of the Circuit Court of Daviess County, from hearing the petitions of 36 common claimants of the Farmers Exchange Bank of Gallatin, in liquidation, in which they seek to have a re-classification of their claims from common to preferential.

Upon the filing of the petition for the writ we issued our preliminary rule. Respondents have made their return to which relators have filed their motion for judgment on the pleadings. Under these circumstances, the facts set forth in the return will be taken as true and are the ones upon which the question of the propriety of the issuance of a permanent writ of prohibition will be decided. State ex rel. v. McQuillin, 262 Mo. 256, 171 S. W. 72.

The facts show that the Farmers' Exchange Bank failed and was placed in the hands of the Commissioner of Finance on March 4th, 1926. On the 17th day of that month a special deputy commissioner of finance was appointed. He qualified, took possession of its assets and otherwise proceeded in the manner required by law. The said 36 claimants, including the respondents, Homer Miller, the Bank of Lock Springs and W. O. Nichols (who improperly have been joined as respondents in this proceeding, see State ex rel. v. Barton, 300 Mo. 76, 254 S. W. 85, but this is probably immaterial) filed and made proof of their respective claims as common claims for deposits, without making any claim whatever for preferences. The deputy commissioner approved their claims as common claims and incorporated them in his report to the Circuit Court of Daviess County, presided over by the respondent Beals, as Judge, on the 23rd day of September, 1926. Upon the filing of this report the court began to take proof on contested claims for preferences, conducting hearings from time to time until the 11th day of July, 1928. On the last mentioned day the court entered up a decree establishing the various claims heretofore mentioned as common claims and allowing or denying all claims for preferences that had been before the court. After the decree was entered appeals were taken on the part of various claimants whose preferences had been denied. Many of these appeals have been passed upon by the appellate courts. Several of them, amounting in all to approximately $30,000.00, are still pending therein.

The first of the 36 claims for preference involved in this proceeding was filed on March 27th, 1932. The remainder of the claims for preferences have been filed since that time. No claim for preference had been filed by any of these 36 claimants prior to March 27th, 1932. Each of the petitions, or amended petitions, for a preference is based upon the same ground, to-wit: that the officers, directors, servants and employees in charge of the operation of the Farmers Exchange Bank knew, at the times that the deposit of the different claimants was made, that the bank was hopelessly insolvent and failed to advise the claimants of that fact and, therefore, the bank became a trustee ex malificio for each of the various claimants for the amount of their respective deposits.

The inventory made by the special deputy commissioner of finance of the assets of the Farmers Exchange Bank shows that it was possessed of assets of the value of something over $900,000.00 and that it had liabilities in the same amount, including deposits. It appears from his report to the court that he has realized out of the assets of the failed bank, after the expenses of liquidation, the sum of approximately $120,000.00, which is on hand and available for distribution and that this will be all of the assets. In the month of March, 1932, some of the relators filed a petition asking for an order declaring a dividend upon their claims, but the court denied their request.

To the various petitions, or amended petitions, filed by the said 36 claimants asking a re-classification of their claims, the bank and its liquidating officers filed demurrers and demurrers were also filed by Katherine Porterfield, who holds a large preferred claim allowed against the failed bank. The court has never passed upon these demurrers, but the petition for the writ of prohibition alleges that the trial judge is attempting to assume jurisdiction over the said 36 claims and is threatening to overrule the demurrers to the petitions and pass upon said claims for preferences. The relators consist of holders of common and preferred claims that have been allowed against the failed bank. Three of the relators are failed banks, themselves, having preferred claims.

It is the contention of the relators that the preliminary rule should be made permanent for the following reasons:

That the said 36 claimants, seeking to have their common claims re-classified as preferential ones, have been guilty of laches in that they had their claims allowed as common claims in the first instance and have stood by through all of the proceedings and waited until this late date to have their claims re-classified; that said claimants are barred by the five year statute of limitations; that the filing of the petition for a re-classification of each of the claims from common to preferential is a departure or the setting up of an entirely new and different cause of action; that the allowance of their claims as common claims is res adjudicata; that said claimants are estopped from having their claims allowed as preferential ones after having had them adjudged common claims.

Certainly none of these alleged grounds form a sufficient basis for the issuance of a writ of prohibition (50 C. J. pp. 656, 662, 678, 679, 683), and we do not construe relators to so contend in their brief. But it seems to be their theory that the above mentioned defenses to the re-classification of the claims taken together with the fact that they have no other remedy to have the matter promptly settled other than by a writ of prohibition, entitles them to the writ. To use relators' own words:

"If these respondents are permitted at this late day to file claims for preference and have them considered and litigated, and appealed as they would be, and await the slow process of appeal and determination by the appellate court, then, at any time pending these appeals other claimants would have the same right to file claims for...