Case Name: Kelsey, Appellant, v. Wagner, Supt. of Building & Loan Assns., et al., Appellees
Court: Ohio Court of Appeals
Jurisdiction: Ohio
Decision Date: 1947-01-23
Citations: 79 Ohio App. 507
Docket Number: No. 1907
Parties: Kelsey, Appellant, v. Wagner, Supt. of Building & Loan Assns., et al., Appellees.
Judges: Hornbeck, P. J., Wiseman and Miller, JJ., concur.
Reporter: Ohio Appellate Reports
Volume: 79
Pages: 507–514

Head Matter:
Kelsey, Appellant, v. Wagner, Supt. of Building & Loan Assns., et al., Appellees.
(No. 1907
Decided January 23, 1947.)
Messrs. Harshman & Young, Mr. Mason Douglass, Messrs. Morgan, Powers & Cooper, Mr. Gilbert Bettman, Jr., and Messrs. Magrish & Magrish, for appellant.
Mr. Hugh S. Jenkins, attorney general, and Mr. Philip R. Becker, for appellees.

Opinion:
By the Court.
This is an appeal on questions of law from a judgment dismissing plaintiff's second amended petition after the trial judge had sustained defendants' demurrer to plaintiff's second amended petition and plaintiff elected to plead no further. The plaintiff's second amended petition consists of four causes of action.
There are four grounds for the demurrer each directed to all causes of action of the second amended petition. They are:
1. Plaintiff's want of'capacity to sue.
2. The court has no jurisdiction of the persons of the defendants.
3. The court has no jurisdiction of the subject matter of the action.
4. The second amended petition does not state facts which show a cause of action.
The trial judge sustained all branches of the demurrer to each cause of action of the second amended petition. Ten errors are assigned, each of which is argued at length. Counsel have provided very extensive briefs and have discussed every legal aspect of the case brought on to the record by the assignments of error. We are also provided with the opinion of Judge Martin in the trial court, which recites all the operative facts as pleaded and considers all the questions of law raised by the demurrer. It would serve no good purpose and add nothing to the literature of this cause for us to restate how the questions arose and to take up and discuss in detail each separate assignment of error as it relates to each cause of action.
The question the answer to which is determinative of this case is whether the plaintiff has in any of his four numbered causes of action stated a case. If he has, then the questions of jurisdiction and capacity of the plaintiff to sue will have to be considered at length.
Without respect to the form of the four causes of action, it is common to all of them that recovery is sought for detailed, extensive, valuable and successful services performed under Section 687-9, General Code. In two of the causes of action it is so pleaded specifically. In the other two it manifestly appears.
.There is- no direct authorization in the Eikenberry Act for payment to counsel for the services here performed. Is there any implied authority for such payment? If there is not, then the form of action, whether legal or equitable, whether a class suit, whether a fund was protected or preserved or whether the principle of equitable contribution is properly presented, is without controlling consequence.
The purpose, scope and effect of the Eikenberry Act are clearly defined in Slocum v. Mutual Building & Investment Co., 130 Ohio St., 312, 199 N. E., 175, wherein it was said in the first paragraph of the syllabus:
"By the enactment of Sections 687 to 687-21, General Code, the state has exercised its power to preempt the field in providing a specific, adequate, exclusive and constitutional method of procedure for the dissolution of building and loan associations and the liquidation of their assets." (Emphasis ours.)
The court there could not have been more explicit in indicating not only that the procedure set out in the designated sections was specific but also that it-, was exclusive and constitutional, and that the state preempted the field as to the liquidation of building and. loan associations.
In the light' of the definite pronouncement of' the Supreme Court in the Slocum case, no proceeding may accomplish that which is not in contemplation of or included in the specific provisions of the Eikenberry Act.-
As to the Slocum case, we have in two instánces' searched the act and particularly the applicable sections thereof to determine the answer to the question presented in that case, which answer in our judgment likewise determines if plaintiff in the instant case has stated a cause of action in his second amended petition.
This court has twice held that counsel who appear for shareholders on an application by the Superintendent of Building and Loan Associations under Section 687-9, General Code, may not have remuneration for such services performed out of the assets of a building and loan association in liquidation.
In In re Liquidation of Columbian Bldg. & Loan Co., 21 Ohio Law Abs., 35, although the record was meager, it was clear that Levinson claimed that in a proceeding upon a plan of reorganization proposed in the liquidation of the Columbian Building '& Loan Company he had performed services as legal counsel for his client as a result of which the proposed plan of reorganization was refused. His claim was filed as an intervening application in the liquidation proceedings. The trial judge dismissed Levinson's application and refused him opportunity to offer evidence in support of his claim.
In passing on the appeal we said among other things:
"The statute [Section 687-9, General Code], in our judgment, does not have for its purpose the making of parties to the action in adverse relationship, nor the filing of pleadings as contemplated by the Code. It accords only to a shareholder, depositor or creditor the right to appear and be heard in some manner other than by the raising of an issue in the form of pleadings. This conclusion is heightened by reason of the further language of the statute, which says that 'no order of the Common Pleas Court or judge thereof entered pursuant to this section shall be deemed a final order' * ft # ? ?
'If the action below were in chancery and not limited by provisions of the statute, we would be disposed to say that the court should have heard appellant touching the result of his activity as counsel for the guardian and the value of. his services. But as the whole matter proceeded under specific authority of the statute and as it does not contemplate parties adverse to the Superintendent of Building and Loan Associations nor pleadings under our civil code nor a final order or judgment as of the time when the determination under consideration here was made, the trial court was with out authority to fix a fee for the services rendered, no matter how valuable they may have been." (Emphasis ours.)
- Later, upon the identical facts and parties as in the instant case, in the cases of In re Liquidation of American Loan & Savings Assn., 21 Ohio Law Abs., 374, the following headnote appears:
"The Common Pleas Court has no authority [either at law or in equity] to allow attorneys' fees for services rendered by attorneys in successfully resisting the application of the Superintendent of Building and Loan Associations for a loan from the Reconstruction Finance Corporation and the pledging of the assets of ' such associations, in liquidation or reorganization proceedings."
That part of the headnote in brackets is not found in the reported opinion, but it could well have been included, upon the viewpoint of this court as expressed in the opinion.
Appeals in those cases were dismissed by the Supreme Court of Ohio (131 Ohio St., 330, 2 N. E. [2d], 823). In those cases, as here, it was urged that the services in behalf of plaintiff were for the benefit of all the shareholders of the associations in liquidation, and that the court should make an order for the payment of counsel fees out of the fund. The decisive question in the trial court and on appeal was raised by a motion of counsel for the superintendent to refuse the application because the court did not have jurisdiction to consider or allow such fees. It was our theory then, and is now, that- the only procedure available to the shareholders, whom counsel for the plaintiff represented in the hearing at the juncture at which they appeared, was that set out in Section 687-9, General Code; that the provisions of such section were comprehensive, complete, exclusive and subject to the limitations which we had defined in the Columbian case; and that such section did not contemplate any award of counsel fees out of the assets of the association for services rendered in such a proceeding. If such award could not be accomplished by application to the Common Pleas Court in the proceedings under Section 687-9, General Code, it could not be brought about by a separate suit. If the court had authority to allow the compensation, it could apply such legal or equitable principles as would be required to accord the remedy. The barrier to recovery in this case is not technical or is it the form of the action, but is based upon the terms of the statute.
But it is urged with much force that the trial court did not make distinction, nor can distinction be made, between the instant case and the cases of Smith v. Kroeger, Supt. of Bldg. & Loan Assns., 138 Ohio St., 508, 37 N. E. (2d), 45; Dennick, Admr., v. Miami Savings & Loan Co., 44 Ohio Law Abs., 586, 69 N. E. (2d), 86; and Pickrel, Schaeffer & Ebeling v. Merion, Supt., 45 Ohio Law Abs., 23, 66 N. E. (2d), 273.
In the Smith case, it was held that the suit was a class suit and that the action taken by the trial court and approved by the appellate court was within the powers of a court of equity. That case was a separate proceeding on the chancery side of the court in which the Superintendent of Building and Loan Associations and the Miami Savings & Loan Company were defendants, and in which it was held that the books of Miami should be reformed and that former shareholders of the Buckeye Building & Loan Association should be classified as creditors of Miami all adverse to the claim of defendants. As a result of such court order approximately 1,600 persons situated similarly to the plaintiff had their status changed to their pecuniary advantage in a sum that was capable of specific calculation.
The Dennick case was enough like the Smith case to permit this court to decide the former upon the strength of the latter case. The Supreme Court, sua sponte, dismissed the appeal from the judgment in the Dennick case (143 Ohio St., 490, 55 N. E. [2d], 795). An appeal to the United States Supreme Court was dismissed for want of a substantial federal question, 323 U. S., 667, 89 L. Ed., 542, 65 S. Ct., 58, rehearing denied, 323 U. S., 813, 89 L. Ed., 647, 65 S. Ct., 113.
In the Pickrel, Schaeffer & Ebeling case, the Mutual Home & Savings Association was in process of liquidation pursuant to the provisions of Section 687-21, General Code. There was a deputy Superintendent of Building and Loan Associations assigned to the association and board of directors of nine members. The Superintendent of Building and Loan Associations took over the business, assets and affairs of the company by virtue of Section 687-21, General Code, claiming that the liquidation was being improperly conducted and that the interests therein were not being properly protected. The board of directors resisted the action of the superintendent in an adverse civil action, Section 687-22, General Code, and in conjunction with this authorized procedure the plaintiffs represented the board of directors as legal counsel. The rationale of the opinion is that from the specific authority granted to the board of directors to resist the action of the superintendent, there was implied authority for it to employ counsel and to pay counsel from the funds of the association in liquidation.
Manifestly, all those cases were, from their inception, adversary in character, and proceeded either upon well recognized general equitable principles, against which there was no statutory inhibition, or under specific or implied authority of the liquidation statutes.
We will not discuss the numerous other questions presented on this appeal but will b¿ satisfied to affirm the judgment on the excellent, well considered and learned opinion of Judge Martin, wherein is considered the determinative questions presented on this appeal. We find no error in this record to the prejudice of plaintiff's cause;
The judgment is affirmed.
Judgment affirmed.
Hornbeck, P. J., Wiseman and Miller, JJ., concur.