Court Opinion

ID: 3690054
Source: CourtListenerOpinion
Date Created: 2016-07-06 06:32:50.60746+00
Date Added: 2024-06-11T14:09:31.752093
License: Public Domain

The judgment attacked by this appeal should, in my opinion, be reversed, and on the undisputed facts established by the pleadings, and *Page 220 
the admissions of counsel shown by the bill of exceptions, judgment should be entered for plaintiff to the extent of "directing," by mandatory injunction, the defendant, Superintendent of Banks, to prosecute a suit against the holders of the land trust certificates, to set aside the trust, making the trustee of the trust a party also, although the petition does not specifically so pray, and contains much surplusage.
I do agree with the majority in its assertion that, "as none of the certificate holders, either individually or as a class, are made parties defendant to this action, it is only such rights and interests of Keeley, as successor trustee thus acquired, that are subject to adjudication herein." Discussion might well stop with that sentence, because he, the successor trustee, could not possibly have any "rights or interests" other than those within the execution of the trust, unless the Superintendent of Banks was, in virtue of law, the certificate holders and the depositors and other creditors by representation.
If he was not such, the certificate holders, other than possibly Garson, were in no manner affected and as to them that case fell to nothingness because of their absence as actual parties.
I would also decide that the record here fails to show that the depositors, the plaintiff and those he represents, ever have had a day in court concerning the validity of the trust and certificates thereof either by the Garson case or otherwise, inasmuch as the very essence of plaintiff's purpose in that case, namely, the appointment of a successor trustee, was utterly repellent to even a suggestion that the trust was not valid, and the attitude of defendant, Superintendent of Banks, shown by the record, cannot possibly be construed otherwise than as an attempt on his part to ratify the trust and the certificates, if the trust was then and there open to successful attack. Otherwise *Page 221 
stated, none of the parties to the Garson case in any manner whatsoever evinced a litigious disposition, but on the contrary complete accord existed and all semblance of contest was absent. Thus all of them excluded foundation for the application of the principle of implied or presumed adjudication which is the basis of the decision of the majority.
What might be the situation if the Superintendent of Banks had litigated the issue of the trust's validity, instead of having joined in its exclusion, need not be inquired into, for if under the guise of litigation he could ratify the trust, there is no reason why he could not have attained the same result outside of the case.
What other recourse, if any, plaintiff and those he represents in the instant case would have were it not for a portion of Section 710-95, General Code, is foreign, and we now quote that portion as the majority opinion does.
"In case of doubt or difficulty, the superintendent may ask the instructions of such court, or a judge thereof, as to the manner in which he should exercise his powers and discretion. He shall not be directed or restrained in the exercise of his powers or discretion otherwise than in a suit in equity in which it shall be alleged and proved that he has exceeded or abused such powers and discretion."
The present case, not relating to instructions askable by the superintendent, does not call for a designation of the court which would have jurisdiction thereof but the court is plainly described wherein the Superintendent of Banks is to be directed or restrained, that is, enjoined mandatorily or prohibitorily, as one "in equity."
When is the latter type of a case to be brought, that is, a case like the one plaintiff is seeking to prosecute? The majority says it must be when there is about to be an exceeding or an abuse of the powers and discretion *Page 222 
by the Superintendent of Banks; but the statute says that in the suit "it shall be alleged and proved that he [superintendent] has
exceeded or abused such powers and discretion." (Italics ours.)
While liquidating a bank the superintendent necessarily encounters many matters involving the exercise of discretion, the pendency of which matters cannot be actually or constructively known to the depositors and other creditors.
Whether, since depositors have contractual rights in the assets of a liquidating bank, by reason of its unlawful diversion of its assets in the form of trusts, the superintendent in charge of the liquidation of such bank, has any power or discretion at all
affecting such rights, is, to say the least, extremely doubtful in view of the constitutional inhibition of statutory impairment.
Webster's New International Dictionary defines "abuse" as "improper treatment or use," and "discretion" as "power of free decision."
Tested by that definition the conclusion is inescapable that the Superintendent of Banks did abuse his discretion, for although the Garson case was disposed of prior to the decision inUlmer v. Fulton, Supt. of Banks, 129 Ohio St. 323,195 N.E. 557, the judgment in the latter case, as well as in several other subsequent cases in lower courts of Ohio, only reflects the unquestioned law as it had universally and long existed, making void such transactions as the attempted creation of the trust and certificates thereof in issue in the present case.
The paragraph immediately preceding presupposes that the Superintendent of Banks had some discretion to exercise in theGarson case.
A trust certificate holder may himself bring a suit as was done in Haggerty v. Squire, Supt. of Banks, 26 Ohio Law Abs., 40, to set the trust aside and cancel *Page 223 
the certificates, or the Superintendent of Banks can bring a suit, for the like purpose as in State, ex rel. Squire, Supt. ofBanks, v. National City Bank of Cleveland, 56 Ohio App. 401,11 N.E.2d 93, wherein an unusually fine and comprehensive opinion by Judge Matthews was filed, admirably covering the principal point in the instant case, namely, that though large, undefined discretion is vested in the superintendent when liquidating insolvent banks, the statutory provision twice quoted furnishes a remedy to aggrieved persons having contractual rights, one class of whom would be depositors questioning the validity of unlawful trusts created by the banks.
GUERNSEY, P.J., CROW and KLINGER, JJ., of the Third Appellate District, sitting by designation in the Eighth Appellate District.