61 S.W.2d 904 | Ky. Ct. App. | 1933
Affirming.
The question for consideration on this appeal was presented in another form and determined adversely to the contentions of appellant in Wilson, Banking Commissioner, v. Louisville Trust Company,
The Bankers' Trust Company, a Kentucky corporation, prior to November 20, 1930, was engaged in the general bank and trust company business in the city of Louisville, Ky. On November 20, 1930, its board of directors closed its doors, posted the notice required by statute (Ky. Stats., sec. 165a-18), and so informed the banking and securities commissioner of the commonwealth of Kentucky. He appointed Walter F. Jacobs as special deputy banking and securities commissioner, and placed him in charge of the institution to liquidate its business. At the time he assumed charge, the Bankers' Trust Company had issued various bonds, aggregating more than $1,600,000, on which the Bankers' Trust Company was bound as guarantor. These bonds were outstanding in the hands of numerous owners. The bonds so issued by it were all secured by various real estate mortgage deeds of trust executed to the Bankers' Trust Company as trustee. Prior to its closing, the Bankers' Trust Company under the mortgage deeds of trust made collections of both principal and interest of the bonds. The special deputy banking and securities commissioner in charge of the affairs of the Bankers' *3 Trust Company began, and continued, to make the collections of the principal and interest on the real estate mortgage bonds then outstanding, and in the hands of purchasers. The separate mortgage deeds of trust in existence exceeded 2,000 in number. The bonds secured by each separate mortgage were designated by "series" numbers. The bonds, among other things, provided that the payments on the principal and interest were to be paid to the Bankers' Trust Company as trustee for the owners or holders thereof. L.C. Riley was the owner of certain of these bonds. He instituted this action in the Jefferson circuit court, seeking the appointment of a trustee in the place of the Bankers' Trust Company for the purpose of liquidating the outstanding bonds to the end that the interests of all might be protected according to their respective rights or priorities, without any other conflicting interests.
On the hearing of the application for the appointment of a new trustee, the banking and securities commissioner and Walter Jacobs, the then acting special banking and securities commissioner, interposed their objections. Later numerous holders of bonds representing more than one-half million dollars also made objections to the appointment of a new trustee. The court, on the pleadings and the presentation of the theories of the respective parties, sustained the motion of Riley, entered an order appointing Walter F. Jacobs receiver of "all the real estate mortgage deeds of trust, guaranteed by the Bankers' Trust Company," and directed him forthwith to assume and to discharge the duties recited in the judgment. Later Wilson, the banking and securities commissioner, went out of office, when James R. Dorman was appointed and qualified as his successor. Gates F. Young was appointed special deputy banking and securities commissioner and placed in charge of the liquidation of the Bankers' Trust Company. Dorman, as banking and securities commissioner, and Young as special deputy banking and securities commissioner in charge of liquidation, entered a motion to set aside the appointment of Walter F. Jacobs, receiver. This motion was overruled, and this appeal is prosecuted from the original order appointing him and from the order overruling the motion to set aside the same order. The banking and securities commissioner and his deputy in charge of the liquidation of the Bankers' Trust Company are here insisting that section 616, Ky. Statutes, *4
prescribes the only condition upon which a receiver may be appointed by the circuit court of an insolvent bank or corporation and that the appointment of Jacobs as receiver was and is not within the purview of this section. To sustain this insistence, American Southern National Bank v. Smith,
The Bankers' Trust Company by its articles of incorporation was authorized and actually engaged in the business of a combined bank and trust company, which is authorized and permitted by sections 577, 603, and 612a, Ky. Statutes. It was also engaged in the business of a trustee, as authorized by section 598b-4, of the $1,600,000 bonds outstanding in the hands of the owners *5
and upon which it was guarantor at the time it closed its doors, posted notice, and was placed in the hands of the banking and securities commissioner. Its duties and obligations as such trustee are severable and distinct from those of a bank or combined bank and trust company. The case of Wilson v. Louisville Title Company,
Sections 165a-1 to 165a-22 do not confer or vest in either the banking and securities commissioner, or his deputy, the authority or right to act as trustee in the place of the Bankers' Trust Company under the mortgage deeds of trust executed to it as trustee. When it became insolvent and ceased to function as a bank and trust company, the office of trustee, ipso facto, became vacant.
Section 598b-4, which confers on a bank or combined bank and trust company the power to act as trustee, also confers on it the authority to act as executor, administrator, guardian, receiver, assignee, committee or curator, or in any other capacity in which the duties, powers, liabilities, and rights are fixed or regulated by law, and in which an individual may act in any of these capacities. Suppose the Bankers' Trust Company, at the time it closed its doors and went into liquidation, was acting in any one or more of these several capacities named in the statute, for different estates, individuals, or corporations; it could not be insisted, upon any authority, or with reason, that on its ceasing to function as a corporation, or after it was placed in the hands of the banking and securities commissioner under section 165a-1 et seq., that the duties of such offices, or any of them, would devolve upon the banking and securities commissioner.
An exemplification is the case of the death of a personal representative, his administrator or executor only retains the possession of the first estate until a successor is appointed (Boyd v. Immegart's Ex'r, 91 S.W. 1132, 29 Ky. Law Rep. 20; Enlow's Adm'r v. Bethel College, 67 S.W. 989, 24 Ky. Law Rep. 31), or where a trustee or assignee for the benefit of the grantor's creditors, dies, the title passes, not to his administrator, but to his successor. Sears v. Hull,
The duty and power of the banking and securities commissioner are creatures of the statutes. There is no statute conferring upon him, or a liquidating agent, the power to act as trustee in the place of the bank or bank and trust company, placed by the statute in his hands for liquidation. Wilson, Banking Commissioner, v. Louisville Trust Co., supra. His bond as such is not intended to, and does not, cover his duties or obligations as trustee. Enlow's Adm'r v. Bethel College, supra.
A mere statement of the amount of the mortgage bonds and the number of holders thereof is sufficient to show that the duties of the trustee relative thereto were not passive, but active, and that a trustee should be appointed for the purpose of discharging the duties and obligations of the trustee. Enlow's Adm'r v. Trustees of Bethel College, supra; Warfield v. Brand's Adm'r, 76 Ky. (13 Bush) 77; Allen v. Kennedy, 8 S.W. 882, 10 Ky. Law Rep. 336.
The rule that equity never allows a trust to fail for want of a trustee admits of no exception, and if a trust is once created, the incompetency, disability, or death of the trustee will not defeat it. Harris v. Rucker, 13 B. Mon. 564; Green's Adm'rs v. Fidelity Trust Co.,
Judgment is affirmed.