File No. 6270 | S.D. | May 5, 1927
This case was commenced by plaintiff against the defendant in the circuit court of Codington County on or about November 19, 1923, and the Presho State Bank, of Lyman county, was made garnishee defendant. The garnishee answered, and plaintiff took issue thereon. Later judgment was rendered against the principal defendant, but the issue between the garnishee and plaintiff was not tried. In February, 1924, the garnishee, Presho State Bank, suspended business because of insolvency, and went into the hands of the superintendent of banks for liquidation. Because of this change in the management of the garnishee bank the issue between the garnishee and plaintiff was not tried! in the regular manner. By means of show -cause orders, the superintendent of banks was required- to intervene, the issues were enlarged, and the court not only tried the liability of the garnishee- as a debtor of the principal defendant, but, because of the insolvency of the garnishee, undertook to establish the deposit as a special deposit, to follow the deposit into a trust fund subject to- the payment of plaintiff’s judgment as preferred claim, and to compel payment thereof into court. The superintendent of banks did not file a -complaint in intervention, but instead entered into a stipulation of fact upon which it was agreed judgment should be entered. Among other things, it was stipulated that the claim was a preferred claim for $6,000; that there were other preferred claims amounting to $3,704.73, which were entitled to- share pro- rata with plaintiff’s claim out of the cash on hand, cash items, and money due from
The single assignment of error is that the court erred in denying the superintendent’s application “to be relieved from the stipulation and judgment.”
The proposed amendment to the stipulation was a separation and itemizing of the fund which was in the first stipulation conceded to be subject to the payment of preferred claims. The first stipulation did not state the amount of cash and the amount of the cash items, but it did state that the $3,160, was composed of cash and other items. Respondent contends that, if it was a mistake to include the money due from banks and cash items, it was a mistake of law and not of fact. That would 'be true, if the first stipulation had set out the items composing the amount conceded to be subject to the payment of preferred claims. But to correct the mistake of law additional facts were necessary, if the cash items and money due from banks could not be used to pay preferred claims. The facts necessary to a proper judgment should have been before the court either by proof or stipulation. ■From the stipulation without amendment the court could not find the necessary facts, and consequently the conclusion of law stipulated and afterwards found by the court was not supported by the evidence, and could not support the judgment. Except where the claimant has been able to trace his trust fund into precific property,
Respondent says that he was willing to follow the $6,000 fund through the International State Bank and into the property of the Presho State Bank, and, if the position now taken by appellant 'had first been taken by him, the stipulation would never have been entered into; that he cannot now be placed in the position he was in before the stipulation, and the settlement made to avoid expense to both parties ought not now to be set aside. Respondent is charged with knowledge of the law, and must be held to have 'known that the superintendent could not, for the purpose of settling litigation, take a fund belonging to general creditors and pay it to preferred creditors. We do. not think respondent was prejudiced by the stipulation. It was approved, by the superintendent more than seven months after the deposit was made'. If after that long delay respondent could have so traced the funds, he would have done much better, than any success of his during the seven months promised for the future. He could not establish the trust by showing the bank’s assets were increased to. the amount of the deposit, but would have to point out the specific property impressed with the trust.
Appellant questions the jurisdiction of the circuit court of Codington county over the subject-matter of the litigation, so far as it pertains to the determination of the priority of the claim, the manner and time of its payment, the funds from which the payment is to be made, and all other matters pertaining to the administration of the estate of the Presho. State Bank, claiming
“The banking department at all times has, and still does, recognize the jurisdiction of the Third judicial circuit court to find the facts entitling plaintiff’s claim to preference in payment over the claims of general creditors of Presho 'State Bank, * * * and the department will how concede full jurisdiction (if the court will * * * make sitch judgment as the superintendent has now decided the court can make).”
This criticism of the superintendent’s position seems to be justified, but, in extenuation of the conduct of both parties, it may be said that, at the time many of the proceedings in this case were had, the law was not. well understood by the courts and bar. Since then this court has definitely decided that the administration of the estate of an insolvent bank is within the exclusive jurisdiction of the circuit court of the bank’s domicile. Hanson v. Sogn, supra; Dockstader v. Hirning, supra. That being the case, the circuit court of Codington county had' no jurisdiction of the subject-matter of the Presho State Bank’s estate, and was without power to determine the priority of claims against its funds. Jurisdiction over the subject-matter could not be conferred by consent.
Whether or not a judgment may be rendered against an insolvent garnishee bank fixing the amount of the garnishee’s liability after it passes into the hands of the superintendent of banks for liquidation, by the circuit court of another circuit, is not decided. Such court cannot decide the character of the claim, whether
No costs to be taxed in this court.