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WOOD et al. v. RAINEY, Superintendent of Banks.a1
This is a companion case with Greva et al. v. Rainey (Cal. App.) 33 P.(2d) 697, this day filed. However, the instant action was brought by the stockholders instead of the depositors of the Pan American Bank in liquidation. The appeal is based on the same set of briefs, and the judgment is identical with the judgment in the case of Greva et al. v. Rainey, supra. The complaint was framed in three counts instead of two. The first and third counts are the same as the two counts contained in the complaint in the case of Greva et al. v. Rainey, supra. The additional count in this case is to the effect that the defendant claims the right, and unless restrained he intends, if there are sufficient funds for that purpose, to pay to the creditors and depositors of each of the several departments of the bank 7 per cent. interest on the principal sum of each claim from July 19, 1929, when he took charge of the bank, down to the date of payment. As shown by what we said in Greva et al. v. Rainey, supra, the claimants in the commercial department who have been paid 100 per cent. of their deposits on July 19, 1929, have been paid, within the terms of section 136 of the Bank Act (Deering's Gen. Laws 1931, p. 215, Act 652), in full, and the defendant is not entitled to pay them interest after said date. For the reasons there assigned, and for the following additional reasons, we think the defendant is not authorized to pay interest to other claimants.
The defendant is a statutory officer exercising statutory powers. There is no provision authorizing nor directing the defendant to make such payments. However, by this statement we are neither affirming nor denying that the depositors and creditors may never recover any additional sums as interest.
If and when the depositors and creditors in the instant case have been paid the amounts due them on the day that the defendant entered and took charge of the bank under some circumstances it may be they, or some of them, may assert a claim for interest covering the period elapsing between July 19, 1929, and the date of the defendant's payment. But such cause of action runs in favor of the creditors and against the bank. It was so held as to state banks. People v. American Loan & Trust Co., 172 N. Y. 371, 65 N. E. 200. An examination of the National Bank Act discloses that it is silent on the subject. An examination of the cases discloses that in no single case has it been held that any power or duty, in this behalf, rests on a receiver of a national bank. On the contrary, it was held that the fact that the receiver had funds on hand after having paid all claims as of the date he took charge, did not give rise to a cause of action against him to recover additional claims for interest. Chemical Nat. Bank v. Bailey, 5 Fed. Cas. page 537, No. 2635. The cases, under the National Bank Act, involving the point and in which the action was sustained, were cases brought by the claimants against the insolvent bank. Bank of Bethel v. Pahquioque Bank, 81 U. S. (14 Wall.) 383, 20 L. Ed. 840; Merrill v. National Bank of Jacksonville, 173 U. S. 131, 133, 19 S. Ct. 360, 43 L. Ed. 640; Gamble v. Wimberly (C. C. A.) 44 F.(2d) 329, 332, and 12 U. S. C. A. 305, and Supp. 48. Therefore, we think it is clear that whatever may be the rights of the depositors for reimbursement for interest claimed to have accrued after the defendant took charge of the bank is a subject without the powers and duties of the defendant. It is a subject to be adjudicated in the courts in a proper action to be brought by the depositors and creditors against the bank. But it is not a matter which this defendant is directed or authorized to determine or have determined.
For the reasons which we have indicated, it is ordered that all of the judgment commencing with the words “Now, therefore,” in the second paragraph, and ending with the words “* * * dates of payment of said respective claims,” at the end of the last paragraph, be stricken out and that there be inserted in the place of the portion so stricken out the following:
Now, therefore, it is hereby ordered, adjudged, and decreed as follows:
(1) That plaintiffs are entitled to a judgment or decree of this court ordering and directing defendant as such superintendent and liquidating agent, to transfer any moneys or assets now in the commercial department of said Pan American Bank of California in liquidation, and any moneys or assets hereafter collected in said commercial department, to the savings department of said bank in liquidation for the purpose of paying claims against said savings department.
(2) That plaintiffs are not entitled to a judgment or decree of this court ordering or directing defendant to forthwith, or at all, sell all or any of the assets of said bank in liquidation now in his possession as liquidating agent thereof.
(3) It is further ordered, adjudged, and decreed that the defendant has no authority to pay to the depositors and claimants of and against any of the departments of said bank in liquidation, interest at the rate of 7 per cent. per annum from July 19, 1929.
As so modified, the judgment is affirmed. The plaintiffs will recover their costs on this appeal.
I dissent. The fundamental question which must be decided in interpreting our Bank Act for the purpose of this appeal and the companion appeal (Greva v. Rainey [Cal. App.] 33 P.(2d) 697) is whether the depositors of a bank are ever entitled to interest on their deposits during the time of liquidation. Under the great weight of authority they are so entitled where the assets are sufficient even though the Bank Act is silent on the subject of interest. People v. California Safe Deposit & Trust Co., 34 Cal. App. 269, 167 P. 181; McGowan v. McDonald, 111 Cal. 57, 43 P. 418, 52 Am. St. Rep. 149; State v. Park Bank & Trust Co., 151 Tenn. 195, 268 S. W. 638, 39 A. L. R. 449; National Bank of the Commonwealth v. Mechanics' National Bank, 94 U. S. 437, 24 L. Ed. 176; Richmond v. Irons, 121 U. S. 27, 7 S. Ct. 788, 30 L. Ed. 864; People v. American Loan & Trust Company, 172 N. Y. 371, 65 N. E. 200; People v. Merchants' Trust Company, 187 N. Y. 293, 79 N. E. 1004; Forschirm v. Mechanics' & Traders' Bank, 206 N. Y. 745, 100 N. E. 1127; Ex parte Stockman, 70 S. C. 31, 48 S. E. 736, 106 Am. St. Rep. 741; Lamar v. Taylor, 141 Ga. 227, 80 S. E. 1085. Appellants rely upon In re Prudential Trust Company, 244 Mass. 64, 138 N. E. 702, but in so far as that case may be said to hold to the contrary, it is opposed to the great weight of authority. While the case of People v. California Safe Deposit & Trust Co., supra, was decided before the repeal of section 1917 of our Civil Code, it would seem immaterial that our general interest statute is now embodied in the so-called Usury Law (Deering's Gen. Laws 1931, Act 3757) rather than in the sections of our Codes.
The next question involves the power and duties, if any, of the Superintendent of Banks with respect to the payment of such interest. Disregarding for the moment the departmental nature of the bank in question and having in mind a nondepartmental bank with assets more than sufficient to pay the principal of all claims against such bank, I believe that the Superintendent of Banks has the power and that it is his duty to pay such interest before calling a meeting of the stockholders as provided in section 136 of the act. Such meeting is not to be called until the depositors have been paid the “full amount” of their claims, and such meeting is for the purpose of allowing the stockholders to decide whether the Superintendent of Banks shall be continued as liquidator or whether an agent shall be selected by the stockholders for the purpose of liquidating the remaining assets. The whole plan assumes that the claims of the depositors have already been fully satisfied before the calling of the stockholders' meeting, and if the depositors are entitled to interest as above indicated, that they cannot be said to have received the “full amount” of their claims unless they have been paid both the principal and interest to which they are entitled. In other words, the Bank Act contemplates a complete rather than a partial liquidation by the Superintendent of Banks between depositors and stockholders and it was not intended that the depositors should be compelled thereafter to resort to actions against the corporation or the stockholders in order to recover such interest. There is nothing to the contrary to be found in Chemical National Bank v. Bailey, 5 Fed. Cas. page 537, No. 2635. The National Bank Act there under consideration differs from our Bank Act in several details. In other ways said act is somewhat similar. The case cited recognizes the right of the depositors to interest during liquidation “not only on strict legal grounds * * * but upon considerations of equity and natural justice. * * *” It is there said: “There is nothing in the provisions of the act under which this fund is to be distributed in conflict with this general rule. While the comptroller is not directed, by express terms, to allow interest to creditors, the act contains no language which, in terms, or by implication, prohibits him from doing so.” The opinion discusses the relative functions of the receiver and the comptroller and the analogy between the position of the comptroller and that of an assignee of an insolvent estate and states that interest should be paid by such comptroller as by such assignee as “the interest is an incident of the debt or claim, and to be paid before distribution of the surplus.” The court then discusses the fact that the action was brought as an action in assumpsit. It held that the receiver was not liable in any form of action as he had no control over the assets except to turn them over to the Treasurer of the United States. It is further said: “If an action could be maintained against the comptroller, it would be one to enforce a proper distribution of the fund, and, for this purpose, the action of assumpsit is not an appropriate remedy.” This case appears to be more favorable to respondent's contention here than to the contention of appellants. It clearly indicates that the comptroller had the power to pay interest, even though the act was silent on the subject, and also suggests that he might have been compelled to do so in an appropriate action “to enforce a proper distribution of the fund.” I believe that the present action was an appropriate one for the purpose, and that the trial court properly declared the manner in which the fund should be distributed by the Superintendent of Banks. The supposed difficulty of determining the rate of interest to which various classes of claimants are entitled during liquidation is solved by the holding in People v. Merchants' Trust Company, 187 N. Y. 293, 79 N. E. 1004. See, also, Ex parte Stockman, 70 S. C. 31, 48 S. E. 736, 106 Am. St. Rep. 741.
The third question is one arising by virtue of the departmental system under which this bank was operating. Assuming that in a nondepartmental bank the depositors are entitled to interest where there are sufficient assets, and further assuming that the superintendent of banks has the power and that it is his duty to pay such interest, what then are the rights of the depositors in one department of a departmental bank which department has sufficient assets to pay both the principal and interest due to the depositors in that department as against the depositors of another department of the same bank which last-mentioned department may not have sufficient assets to pay the principal of the claims of its depositors? Sections 23, 25, 26, and 27 of the act clearly indicate that each department must be treated as a separate bank at least until the depositors of said department have been fully paid. From what has been said above, such depositors have not been fully paid until they have received both principal and interest. The cases dealing with preferred and unpreferred claims against an insolvent bank do not appear to be in point.
In my opinion, the trial court correctly determined the questions before it, and the judgment should be affirmed.
STURTEVANT, Justice.
I concur: NOURSE, P.J.
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Docket No: Civ. 9337.
Decided: May 25, 1934
Court: District Court of Appeal, First District, Division 2, California.
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