Summary
In Worth v. Bank, 121 N.C. 343 (347), is the following: "Ordinarily the motion for a receiver must be made before the resident judge of the district, or one assigned to the district or holding the courts thereof by exchange, at the option of the mover.
Summary of this case from Hopkins v. SwainOpinion
(September Term, 1897.)
Insolvent Bank — Receiver, Appointment of — Conflicting Appointment of Receivers — Priority — Jurisdiction — Contempt.
1. Ordinarily, a motion for the appointment of a receiver must be made before the resident judge of a district or one assigned to the district or holding the courts thereof by exchange, at the option of the mover; but it may be made before any other judge, in which case the order, if granted, must be made returnable before one of such judges.
2. Under chapter 155, Laws 1891, as amended by chapter 478, Laws 1893, requiring the State Treasurer to appoint some one to examine and report on the condition of the State banks, and if it appears from such report that a bank is insolvent or in imminent danger of insolvency, to institute proceedings in the Superior Court of Wake County for winding up its affairs, and for the appointment of a receiver according to law, application for the appointment of such receiver may be made before the resident judge holding the courts, by assignment or exchange of the judicial district in which Wake County is situated.
3. In such case, it can make no difference in the Treasurer's right to make such application that the examiner did not make his report until the insolvency of the bank was publicly known.
4. The Laws of 1891 (chapter 155) and of 1893 (chapter 478) do not give to the State Treasurer the exclusive right to institute proceedings for a receiver, so as to take away the right of any creditor, by a general creditor's bill, to begin an action for that purpose in the Superior Court of the county where the bank is situated.
5. Where proper proceedings for the appointment of a receiver are begun in two different courts, and a different receiver is appointed in each case, this Court, in determining the priority of appointment, as between the receivers, will take notice of fractions of a day.
6. The Court which first takes cognizance of a controversy is entitled to retain jurisdiction until the end of the litigation, to the exclusion of all interference by other courts of concurrent jurisdiction; and hence, where permanent receivers were appointed in separate proceedings by different courts having equal authority to appoint, the test of prior jurisdiction is not the first issuing of the summons nor the first preparation and verification of the papers, nor which receiver first took possession, but which court was first "seized of jurisdiction" by making an order upon legal proceedings exhibited before it, as by the appointment of a temporary receiver.
7. Where C. and W. were respectively appointed receivers by two separate courts having equal jurisdiction, and W. took possession of the property in suit under order of court, and refused, on demand, to deliver up possession to C., who was subsequently declared rightfully appointed and entitled to possession, and it appeared that W. acted in good faith and under an order of court which he considered valid: Held, that W. is not punishable for contempt of court in refusing to deliver the property until the question of priority of right should be decided.
(344) ACTION brought in the Superior Court of WAKE by W. H. Worth, State Treasurer, against the Piedmont Bank of Morganton, for the winding up the affairs of the bank and the appointment of a receiver, and heard before Robinson, J., at chambers, on 11 December, 1897, on a motion to appoint a permanent receiver, and on affidavits of W. E. Walton and others in an answer to a rule on said Walton why he should not be adjudged in contempt for refusing to deliver possession of the property of defendant bank to A. D. Cowles, who had been appointed temporary receiver by Robinson, J., on 3 December, 1897.
(346) From the order of Robinson, J., appointing A. D. Cowles permanent receiver and holding that the appointment of W. L. Walton by Judge Green as temporary receiver was subsequent to the appointment of Cowles as temporary receiver, and directing said Walton to turn over the property of the defendant bank to said Cowles, receiver, W. L. Walton appealed.
E. J. Justice for Walton.
F. H. Busbee for Treasurer.
Ordinarily, the motion for a receiver must be made (347) before the resident judge of the district, or one assigned to the district or holding the courts thereof by exchange, at the option of the mover. Code, secs. 379, 336; Corbin v. Berry, 83 N.C. 27. Or, at most, in analogy to the granting of restraining orders, if the motion for a temporary receiver is granted by any other judge than one of those just named, the order must be made returnable before one of such judges. Galbreath v. Everett, 84 N.C. 546; Hamilton v. Icard, 112 N.C. 589. Laws 1891, ch. 55, as amended by Laws 1893, ch. 478, makes it the duty of the State Treasurer to appoint some one to make examination of the condition of the State banks, banking institutions and bankers referred to in that statute, and report thereon; and "if on such report it shall appear to the State Treasurer that any bank, banking institution, or banker is insolvent or in imminent danger of insolvency, or is guilty of fraud, fraudulent practices, or concealments, the said Treasurer shall appear to the State Treasurer that any bank, banking institution, or banker is insolvent or in imminent danger of insolvency, or is guilty of fraud, fraudulent practices, or concealments, the said Treasurer shall institute proceedings in the Superior Court of Wake for the purpose of winding up and settling the affairs of the said bank, banking institution, or banker, and for the appointment of a receiver thereof according to law." Under this act an application by the Treasurer for the appointment of a receiver could be made to the resident judge or the judge holding the courts, by assignment or exchange, of the judicial district in which Wake County is situated. It can make no difference in the Treasurer's right to make the application that the examiner did not make such report till the insolvency of the bank was publicly known. If the report had been made earlier it would have been simply the Treasurer's duty to have moved earlier.
But we see nothing in the act which, by a just construction, gives the Treasurer the exclusive right to institute proceedings for a receiver, etc., nor which takes away the right of any creditor, by a general creditor's bill, to begin an action for that purpose. The only difference (348) is that the Treasurer by means of his examiner may have earlier information than others, and it is made his official duty to take appropriate steps to wind up the bank whenever by the examiner's report it appears to him that "it is insolvent or in imminent danger of insolvency, or is guilty of fraud, fraudulent practices, or concealments," but that does not specify that if he moves it shall invalidate proceedings already taken by creditors for that purpose under the general law.
The proceedings by Webb and other creditors, and that by the Treasurer, were equally authorized by statute. The only inquiry, therefore, is as to which obtained the priority, for only one proceeding for the purpose can be tolerated, and in determining the question of priority in such cases the court will take notice of fractions of a day. People v. Bank, 35 How. Pr., 428; s. c., 53 Barb., 412.
The summons in the proceeding instituted by Worth, Treasurer, was issued 2 December, but a few hours later than the summon issued on the same day in the proceeding begun by Webb and others. On the other hand, the order appointing a temporary receiver was made by Judge Robinson in Treasurer Worth's suit at 9:45 a. m., 3 December, and at 6:45 p. m. the same day Judge Hoke appointed a temporary receiver in the suit brought by Webb and others. The permanent receiver was appointed in the Treasurer's suit on 11 December, a few hours later than the appointment on the same day of the permanent receiver by Judge Greene in Webb's suit. The temporary and permanent receiver appointed in the Webb suit took and still holds possession of the assets.
The test of jurisdiction in such cases is not the first issuing of the summons, nor the first preparation and verification of the papers, which are the acts of the parties, nor which receiver first took possession (349) ( People v. Bank, supra), since that has no effect, unless legally authorized (which it cannot be if a prior order has been made appointing another), but which court is first "seized of jurisdiction" by making an order upon legal proceedings exhibited before it. "That court which first takes cognizance of the controversy is entitled to retain jurisdiction until the end of the litigation, to the exclusion of all interference by other courts of concurrent jurisdiction." Gluke Becker on Rec., sec. 430. "Priority as between receivers is determined by reference to the date of appointment, since the court will not permit both to act." High on Rec., sec. 162. "The title of the receiver dated back to the time of granting the order, even though preliminary conditions must be performed, and he remains out of possession pending such performance." Beach on Rec., sec. 200; Wilson v. Allen, 6 Barb. (N. Y.), 542; Storm v. Waddell, 2 Sandf., 494. The first order was made by Judge Robinson appointing a temporary receiver, and he retains the jurisdiction then acquired. Childs v. Martin, 69 N.C. 126; Young v. Rollins, 85 N.C. 485. Walton, however, was properly not punished for contempt. As was said in People v. Bank, supra, "he appears to have acted in good faith, and had the authority of an order of the court, which he was probably entitled to regard as valid until pronounced otherwise on a question of priority by a competent tribunal." That decision being now pronounced, it will be his duty to obey it and deliver over the assets to the receiver appointed by the court which first acquired jurisdiction — i. e., Cowles.
The order of Judge Robinson of 11 December, 1897, is in all respects
Affirmed.
Upon the filing of the opinion in the above case, the plaintiff moved for judgment in this Court directing the respondent, W. E. Walton, to deliver to Andrew D. Cowles, receiver, the assets of the defendant bank, real and personal, under the decision of the court, and for (350) costs, and in default of the delivery of the said assets to said Cowles by respondent, that an execution issue to the proper officer to place the said Andrew D. Cowles, receiver, in possession of said assets.
Judgment was rendered accordingly.
Cited: Pettigrew v. McCoin, 165 N.C. 477.