Donaldson v. Johnson

3 S.C. 216 | S.C. | 1872

The opinion of the Court was delivered by

Moses, C. J.

We do not propose to extend our enquiry beyond what we conceive to be the material question submitted by the brief for our judgment. If “the Judge of the Circuit” had the power to confer the appointment, it must stand, without regard to the consequences wffiich the appellants anticipate will materially affect the interests of the creditors, and possibly the stockholders, of the corporation which they claim to represent.

The Act of March 13, 1869, (14 Stat., 212,) was to change the anomalous relation in which the incorporated banks of the State, which had failed to meet their issue, stood to the source from which they had derived their existence, and to the public, who had become their creditors by holding their bills. It was due to the community with which they had dealt, if they were unable to comply with the conditions intended, and provided as a security for the proper fulfillment of the duties enjoined by their charters, that their corporate rights should terminate. The Legislature, with a commendable liberality, extended the time for their resumption of specie payment to the first of December following the passage of the Act, and in the event of the failure of any bank to accept the proposed alternative, the performance of which was to exempt it from the operation of the Act, the Judge of the Circuit in which such bank was situated, was required to appoint a suitable person as Receiver, to take charge of its property and assets.

We are not now to determine whether the mere fact of such appointment worked a forfeiture of the charter of such non-complying bank, nor whether, without resistance on the part of such bank, according to the forms of law, a forfeiture would follow, nor whether the appellants here can contest the fact of forfeiture, when, in their answer, they do not claim that their bank, on the first of December, 1869, had performed all the conditions demanded by the Act to give continuance to its charter. The objection to the exercise of the power by the Judge of the Circuit, urged by the appellants, rests entirely on the assumption “ that the Act of 1869 did not apply to a bank in liquidation under a decree of the Court before the time at which the Act was operative by its terms.” The other points made are only incidental to this, as, for instance, that the power of the Judge was entirely superseded by the previous appointment of a Receiver in the cause pending in the Court.

The whole design of the Act could have been readily defeated by all the banks on which it was intended to operate if this exception can prevail. If a bill had been filed after the passage of the Act by any of the suspended banks, admitting its insolvency and the violation of its charter, and praying that it might be put in liquidation and a Receiver appointed, it is hot clear that a proceeding set in motion by such defaulting bank to sever itself from the power of the Judge of the Circuit in the particular conferred by the Act, would have proved a successful result. The Receiver to be appointed under the Act had prescribed duties to perform in regard to the State, which would not be incumbent on a Receiver appointed by a Court in the course of a ease, unless required by its order. The appellants, however, so far from seeking, by their bill, the appointment of a Receiver, ask that the President and Directors be protected in the management of the institution “ according to the course they have been pursuing, except it be by the order and direction of this honorable Court.”

A Receiver is usually appointed on the application of a party having a claim “in some case of equitable property.” It is never sought of a Court by a debtor having his own assets in his own hands. He generally considers himself perfectly competent for the management of his property, and the best judge of how it shall be apportioned among his creditors. The bank, already the custodian of its funds, would gain nothing by its application to the Court to allow it to be the possessors of its own property.

The administration of the affairs of this bank was never assumed by the Court. It in no way undertook to vary or transfer the possession of the assets, or to change the relation in which its Directors stood to the bank or to the public.

An order had been made in the cause, requiring the “ creditors of the bank to present statements of their claims, designating the number of their bills or notes of each denomination, at the banking house of plaintiffs,” by a certain day. The President and Cashier made a report of the demands filed, on which the Court ordered their payment “ out of the assets of the said bank, the President and Cashier acting as Receivers to this end, with such further authority as the Board may rightfully confer, as to collections, sales of property, &c., as may be necessary.” This conferred no more authority on the President and .Cashier, acting under the Board of Directors, than they had before, nor, on the other hand, did it restrict them in the exercise of any of their rights under the charter. The end to be accomplished by the appointment of a Receiver might be entirely frustrated, if the debtor should be selected as the custodian of the fund through which thé creditor was to be paid. The Directors represented the bank. Parties are never proper-appointees as Receivers. Where would be the additional security for the assets, if they are nominally taken from the Directors as such, and yet retained in their hands as Receivers ? The Court cannot be supposed to have intended such an absurdity.

We are not, however, to be understood as affirming, that if, under the proceedings referred to, a Receiver had been appointed for this corporation by the Court, after the passage of the Act of 1869, the statutory power authorized and required by the said Act would have beeu destroyed or impaired. The Receiver contemplated by the statute is not the ordinary provisional Receiver, appointed by a Court in the progress of a cause for the benefit of all the parties interested. Although appointed by the Judge of the Circuit, he is not, in a judicial view, the officer of the Court. If the Act had authorized the Governor to appoint the Receiver, it could scarcely be claimed that his nominee would be the officer of the Court, although all the incidents belonging to the position of the ordinary Receiver might attach to the office, and he would be answerable to the order and process of any Court having the right to administer the fund committed to his charge. He is not the creature of the Court in the sense in which the term is applied to the ordinary Receiver.

It is a mistake to suppose that the excercise of the power conferred on the Judge of the Circuit could in any event affect the preference which a creditor might have obtained in the course of legal proceedings in regard to the assets of this corporation, or at all interfere with the vested rights of any creditor. If these are in a condition in which they can be judicially recognized, they must prevail, for they cannot be prejudiced by the mere execution of a power by one having the right to exercise it under statutory authority. As they are beyond the reach of the Legislature itself, they are still further beyond that of their mere agent.

The order affirming the judgment of the Circuit Court, and dismissing the motion, has been heretofore filed.

Willard, A. J., and Wright, A. J., concurred.