Court Opinion

ID: 3425002
Source: CourtListenerOpinion
Date Created: 2016-07-05 19:52:52.041702+00
Date Added: 2024-06-11T13:34:00.602688
License: Public Domain

DISSENTING OPINION.
The action here sought to be prohibited was brought against the Meyer-Kiser (state) Bank by creditors who seek to recover $6,000, and to have a receiver appointed for the bank. They allege that the bank is insolvent; that it has $2,000,000 in deposits due creditors; that its assets are frozen and incapable of conversion into cash; that it is illegally conducting an insurance, real estate and safe deposit business to the loss of creditors; that the State Bank Commissioner has failed and refused to act except to release the assets to a liquidating committee of the bank's officers; that these liquidators are attempting to prefer claims without right, are creating excessive expenses and occupying large and unnecessary office space; that suits are being threatened by depositors; that expense of litigation will be incurred, and waste committed; that creditors in the sum of $50,000 are claiming preference over others and a general controversy exists as to the rights of the parties; that titles to real estate sold cannot be given without dispute as to their validity; and that an emergency exists for the appointment of a receiver to protect the property.
It is apparent that the action in the superior court of Marion County was brought under § 245, ch. 38, Acts 1881, § 1300 Burns 1926, which reads in part as follows:
"A receiver may be appointed . . . in the following cases: . . . Third. In all actions when . . . the property (or) fund . . . in controversy is in danger of being lost, removed or materially injured. . . . Fifth. When a corporation has been dissolved, or is insolvent, or is in imminent danger of insolvency, or has forfeited its corporate rights. . . . Seventh. . . . where, in the discretion of the court . . . it may be necessary to secure ample justice to the parties." *Page 610 
In applying for a writ of prohibition (under § 1244 Burns 1926) to restrain Thomas D. McGee, as special judge of the Marion Superior Court, from exercising any jurisdiction in such action, the relator herein contends that the procedure outlined in ch. 161, Acts 1929, § 3965 Burns Supp. 1929, for the appointment of a receiver for insolvent or failing banking corporations is exclusive and that the lower court has no jurisdiction to hear or consider any application for the appointment of a receiver for a state bank except one made in pursuance to such act of 1929, by the banking commissioner of the state (or under certain conditions by the Attorney-General).
Chapter 161, Acts 1929 p. 495 (which amends § 2, ch. 263, Acts 1921 p. 816, which amends §§ 1, 2 and 3, ch. 17, Acts 1911 p. 30, which repealed ch. 182, Acts 1907 p. 300), provides for the examination of banks by bank commissioners, and if such bank "be in an insolvent or failing condition, or if the assets thereof are being wasted or improperly used or converted, said examiner shall at once notify the bank commissioner; and if said bank commissioner shall deem it necessary and expedient he shall thereupon direct said examiner or some other person appointed by him to at once take charge and control of said . . . bank . . . and said bank commissioner shall, if he finds it to the best interests of the depositors and creditors of said bank, make application to the judge of the circuit court or superior court of the county where such . . . bank . . . is situated . . . for the appointment of a receiver," etc.1
Much can be said in support of a legislative policy to *Page 611 
place exclusively in the hands of the banking department (created by ch. 50, Acts 1919, p. 112, as amended by ch. 105, Acts 1921 p. 259) the right to apply for receivers for insolvent and failing banks. In the present state of our banking law and our antiquated liquidation statute (§ 11, ch. 8, Acts 1873 p. 21, § 3867 Burns 1926) something can also be said in favor of retaining the general law of receivers as applicable to banking as well as other corporations. The courts, however, are not concerned with legislative problems. The question to be decided is: Did the Legislature limit applications for receivers for banks to those filed by the banking commissioner? We are impressed by the fact that if the Legislature had intended to prevent the general statute (§ 1300, supra) from applying to banking corporations, it could easily have done so by an express provision to that effect.
In Wehmeier v. Mercantile Banking Co. (1911),49 Ind. App. 454, 97 N.E. 558, it was held that § 8, ch. 113, Acts 1907 (the language of which has largely been carried forward in the amendments of 1911, 1921 and 1929), which provided for the examination of banks and if the bank be insolvent or in a failing condition the Auditor (now banking commissioner) shall make application for a receiver, merely extended to such officer a right theretofore available only to others. The court stated the principle of law that where a right of action is created by statute, or an existing right is changed thereby and a remedy is provided for its enforcement, the statutory remedy is exclusive; but held that § 8 giving to the Auditor (now banking commissioner) the right to apply for a receiver for an insolvent bank and providing that such bank shall not be subject to any other "visitorial powers . . . except such as are vested in the several courts of this state" (which quoted language is carried forward in the present law), indicates an intention not to interfere with the existing authority of the courts *Page 612 
to appoint receivers for such banks. In that case, p. 462, the case of Ryan v. Ray (1886), 105 Ind. 101, 4 N.E. 214, was distinguished on the ground that in the act there considered a new right was created and a specific mode of relief provided. I believe this court in Farmers Deposit Bank v. State, ex rel.
(1929), 201 Ind. 117, 166 N.E. 285, misinterpreted the holding inRyan v. Ray, supra, and that the dicta there stated (bottom of p. 120 and top of p. 121) is unwarranted. An examination ofHawley v. Huntington County State Bank (1929), 201 Ind. 390,165 N.E. 546, indicates that the courts have continued to hear applications by creditors for the appointment of receivers of state banks on the ground of insolvency.
The amendment of 1911, although not involved in Wehmeier v.Mercantile Banking Co., supra, was passed before that case was decided. The amendments of 1921 and 1929, passed after the Appellate Court had construed the meaning of the language used in the act of 1907, continued the use of that language which had been held not to limit applications for a receiver for a bank solely to those filed by the auditor (bank examiner). In my opinion the Legislature has not limited applications for the appointment of receivers of insolvent and failing banks solely to those filed by the banking commissioner. A conclusion that § 1300, supra, has been repealed or amended so far as it applies to banking corporations can only be reached, I believe, by a process of judicial legislation, which is not permitted by the Constitution.
This court, in a proceeding for a writ of prohibition, cannot upon the pleadings and without proof determine the fact of whether the bank is solvent or insolvent or try any issue of fact between the parties to the action in the Marion Superior Court. If the allegations contained in the complaint filed therein should be found by that court to be true, a receiver doubtless would be *Page 613 
appointed. If upon trial the facts should be established which relator contends exist, the appointment of a receiver doubtless would be refused.
A simple, adequate and effective remedy exists in the trial court which has jurisdiction to try the cause there pending, and it follows that the temporary writ of prohibition should be dissolved.
1 The title of this act, and of the acts which it amends, contains nothing upon the subject of the appointment of receivers for banks, but concerns "the appointment and fixing the powers of examiners for and regulating the examination of . . . banks," etc. The title of the original act of February 7, 1873 is "An act to authorize and regulate the incorporation of Banks of Discount and Deposit in the State of Indiana."