The Citizens' Bank of Mound City v. State
| Decision Date | 01 September 1898 |
| Docket Number | 297 |
| Citation | 54 P. 510,8 Kan.App. 468 |
| Parties | THE CITIZENS' BANK OF MOUND CITY, KANSAS, AND A. G. SEAMAN, its Receiver, v. THE STATE OF KANSAS, ex rel |
| Court | Kansas Court of Appeals |
Opinion Filed September 22, 1898.
Error from Linn district court; J. S. WEST, judge. Reversed.
Reversed, and cause remanded.
John W Poore, for plaintiffs in error.
Stebbins & Evans, for defendant in error.
The proceedings of the trial court were upon an agreed statement of facts, in substance as follows: On July 19, 1893, in a suit brought by the attorney-general, a receiver was appointed by the district court of Linn county to wind up the affairs of the Citizens' Bank of Mound City, Kansas, the bank being insolvent. A. G. Seaman was appointed receiver and immediately took charge of the affairs and assets of the bank. While the bank was a going concern, Milton F. Mitchell had received from it collateral notes amounting to $ 1044.16 to secure his deposit of $ 1375.68. On February 6, 1894, Mitchell presented his claim on his certificate of deposit to the receiver for allowance, and the same was thereupon allowed in full. Three days later, Mitchell reported to the receiver that he had collected from the collateral notes held by him the sum of $ 1,089.16, and had applied it on his claim against the bank. In November, 1893, the receiver declared and paid a dividend of ten per cent., and in April, 1894, he declared and paid another dividend of five per cent., but paid no part of either of the dividends to Mitchell, and refused to pay any dividend to him. On June 14, 1894, Mitchell filed a motion asking the court to order the receiver to pay fifteen per cent. on his claim as allowed, and three days later the court heard the motion and granted the order as prayed for. The receiver, for himself and on behalf of the unsecured creditors of the bank, brings these proceedings for a review of said order.
The question for decision is whether the defendant in error is entitled to dividends on the whole amount of his claim as proved and allowed, irrespective of the collateral security held by him. Upon this question the courts of the various states are somewhat unequally divided, a majority maintaining the affirmative position. An examination of the authorities indicates that the rules applicable to the distribution of an estate assigned for the benefit of the creditors of an insolvent govern in the distribution of the estate of an insolvent corporation in the hands of a receiver. Probably the most exhaustive consideration of the question herein involved to be found in any one case is given in the opinion of the United States circuit court of appeals in the case of Chemical Nat. Bank v. Armstrong, 16 U.S. App. 465 59 F. 372, in which it was held that the claims of creditors of...
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