Opinion ID: 1119218
Heading Depth: 2
Heading Rank: 7

Heading: first national bank as a defendant

Text: The relief sought by the State against First National Bank of Anchorage was a declaratory judgment that the Bank was not a holder in due course of the Windsong lot purchasers' promissory notes. The Bank held these notes as security for its loans to Brown used to finance the Windsong Subdivision. Although when delivered the notes were unendorsed, the collateral and loan agreements between Brown and First National authorized the Bank to endorse the notes to itself on Brown's behalf. After a time it did so and then notified purchasers that they were obligated to make their payments to the Bank, despite the lower court's directive that those purchasers seeking restitution should make their payments to the court registry. It was at this point that the State amended its complaint to add First National as a defendant. The lower court dismissed the State's action against the Bank, reasoning that the State was without standing to assert potential claims that individual lot purchasers might have against First National because the Bank had violated no law. [33] In our view, the lower court impermissibly substituted its own judgment for that of the executive official charged with bringing suit when, in his judgment, the public interest requires, and therefore erred in dismissing the State's action against First National. We have already had occasion to discuss the Attorney General's broad common law powers. What we have said is equally applicable to the question of the State's authority to sue the Bank. Under the common law, an attorney general is empowered to bring any action which he thinks necessary to protect the public interest... . Public Defender Agency v. Superior Court, Third Judicial District, 534 P.2d 947, 950 (Alaska 1975) (emphasis added). And, subject to constitutional bounds, what is or is not in the public interest is a matter committed to the Attorney General's sound discretion. Id. That the State saw fit to try to prevent First National from collecting on notes executed by persons whom it had reason to believe may have been the victims of fraud, is not a decision subject to the control or review of the courts. The trial court's concern that allowing the State to sue First National in the absence of a specific statutory violation by the Bank would create a horrendous risk of overreaching by the State as litigant, is answered by the observation that the fact that the exercise of power may be abused is no sufficient reason for denying its existence. United States v. San Jacinto Tin Co., 125 U.S. 273, 284, 8 S.Ct. 850, 856, 31 L.Ed. 747, 751 (1888). We conclude, therefore, that the trial court erred in dismissing the State's claim against First National. On remand, the State must be given the opportunity to show, with respect to the individual purchasers represented, [34] that the Bank does not occupy the status of a holder in due course of the various purchasers' promissory notes. The judgment is AFFIRMED in part and REVERSED in part and the case is REMANDED for further proceedings consistent with this opinion. [35]