178 Ga. 130 | Ga. | 1933
Griffin Banking Company being insolvent and in the possession of R. E. Gormley as superintendent of banks for the purpose of liquidation, the superintendent applied to the judge of the superior court of Spalding County for an order authorizing him to obtain a loan from the Reconstruction Finance Corporation to aid in the liquidation of such bank, and to pledge the assets of the bank as security for such loan. Upon the grant of the application by the judge of the superior court, Touchstone, a stockholder and a creditor of the bank, filed a suit against Gormley in his official capacity, to enjoin the obtaining of such loan, on the sole ground that the superintendent of banks had no authority to contract for such loan or to pledge the assets to secure the same. An interlocutory injunction was denied, and Touchstone excepted.
The petition, together • with the exhibits attached thereto, disclosed the following facts: Griffin Banking Company failed and went into the hands of the superintendent of banks for liquidation, on March 23, 1933, with liabilities amounting to about $1,600,000. According to an appraisement made by or at the instance of the superintendent of banks, the value of the assets was about $780,000.
The petition further showed, by an exhibit, certain terms and conditions to be included in the proposed contract between the superintendent of banks and the Eeconstruction Finance Corporation, some of which were as follows: The rate of interest to be paid is 4-1/2 per cent, per annum, payable semi-annually, and the note tQ
The superintendent of banks in his answer admitted the allegations of fact contained in the petition, but denied that he was -without authority of law to obtain the loan and to pledge the assets as security therefor, as claimed by the plaintiff. By way of additional response the superintendent alleged: The assets of Griffin Banking Company consist largely of "“frozen assets,” which can not be liquidated at once, and in order to realize anything like their appraised value it will be necessary to continue the liquidation through several years. Unless the defendant is permitted to secure advances from the Reconstruction Finance Corporation as proposed, depositors and creditors of the insolvent bank will be delayed in the collection of their claims for a period of years. In his application to the judge of the superior court, which preceded the filing of the petition for injunction, and a copy of which is attached thereto as an exhibit, it was stated by the superintendent that “it is to the best interests of the creditors of said bank, and in order to secure a fair value for said assets, that a loan be procured thereon and the liquidation continued through a considerable period of time.” This statement was not denied in the plaintiff’s petition.
At the interlocutory hearing the case was submitted to the judge of the superior court upon “the verified petition of the plaintiff” and “the verified answer of the defendant,” no demurrer having been filed.
Section 7 of article 7 of the banking act of 1919 (Ga. L. 1919, p. 135), is as follows: “Upon taking possession of the assets and business of any bank, the superintendent is authorized to collect all moneys due to such bank, and to do such other acts as are noces
Certain provisions of the banking laws, stating the time within which stated acts must be performed, tend to show that an expeditious liquidation was expected (Ga. L. 1919, p. 135, art. 7, §§ 12,13, 15, 20); but no particular time limit for completing liquidation is actually prescribed, and the provisions just referred to are not conclusive. We can not attribute to the General Assembly the indiscretion of putting haste above prudence, and we think that if necessary the superintendent should extend the liquidation through such period of time as would prevent the sacrifice of assets and conserve the interests of all concerned. Thus, it is no absolute objection that the Eeconstruction Finance Corporation is authorized by the acts of Congress to make loans for a period of not exceed
It does not appear that the terms and conditions of the loan and the requirements to be met by the superintendent will necessitate the surrender of any powers conferred upon that officer by the laws of this State (as was held to have been done, in Mobley v. Marlin, 166 Ga. 820, 144 S. E. 747), or restrict him in the performance of any duty resting upon him as a public officer. On first impression this conclusion might seem to be incorrect, in view of the facts that after pledging the assets the superintendent can not further deal with them except upon such terms as may be stated by the pledgee, and may be required to give bond to account to the pledgee for collections made. The former condition, however, is a necessary incident of every pledge, while the latter is not unusual in a trust agreement. It is not assumed that the Reconstruction Finance Corporation will be unreasonable in any matter relating to the bond. If any unreasonable demand should be made, the superintendent could withdraw. Accordingly, the authority to meet these requirements even at some expense will find place in the greater power to obtain the loan and to make the pledge. The fact that the bond may include a condition that the superintendent will faithfully discharge his duties as liquidating agent can hurt no one, although he is already under bond to the State of Georgia upon substantially the same condition.
Under the facts of this case it appears that the assets of the bank have been valued by the Reconstruction Finance Corporation at about $961,000; and that under the liberal policy of the Reconstruction Finance Corporation, which is seeking as a governmental agency to promote national recovery, the superintendent may ob
Since the record discloses nothing which can be seized upon as an absolute legal ground of objection, it does not appear that the superintendent would exceed or abuse his discretion in proceeding to negotiate the loan and to pledge the assets therefor, as contemplated, the proposed transaction having been approved by the judge of the superior court upon application duly made. So long as the superintendent does not exceed or abuse his discretion in such a matter, his action when approved by the judge of the superior court in an administrative capacity' (Mobley v. Greene, 169 Ga. 82, 149 S. E. 703); Cochran v. Bennett, 37 Ga. App. 202, 139 S. E. 428) can not be controlled by the courts. A court of equity should not interfere with the conduct of the superintendent in a matter of this kind “unless such action is arbitrary, and amounts to an abuse of discretion.” Dyer v. Martin, 132 Ga. 445 (3) (64 S. E. 475); Dunn v. Beck, 144 Ga. 148 (86 S. E. 385); Jackson v. State Highway Department, 164 Ga. 434 (4) (138 S. E. 847); Talmadge v. Sutton, 175 Ga. 811 (166 S. E. 240). A case might arise in which it would appear as a matter of law that no loan whatever should be obtained, or that a particular loan would be unwise in view of the terms thereof, and in such a case the superintendent would be subject to restraint by judicial action; but under the facts of this record it is apparent that the superintendent was acting within the sphere of his legally delegated powers. The judge properly denied an injunction.
Judgment affirmed.