State Ex Rel., Etc. v. Willmer

Whitfield, P.J. — Creditors of an insolvent State bank, whose assets and business are being administered under the authority of the State Comptroller pursuant to the Statute, brought this suit in the Circuit Court against the bank, the Comptroller, his liquidator and the State Treasurer. The bill of complaint, upon elaborate allegations of mismanagement and wrong-doing in administering the affairs of the insolvent bank under the authority of the Comptroller, prays: “1. That the defendants and,each of them may be required to answer this Bill of Complaint, but not under oath, the answer under oath being hereby expressly waived. 2. That the defendant, JOHN A. NEWSOM aforesaid, may be enjoined both pendente lite and permanently from further engaging in the service of liquidator of the defendant, Citizens Bank & Trust Company, or acting as such; and in the administration of full and complete equitable relief in the conjunction with such prayer for injunction, that said defendant may be removed and discharged from such liquidator-ship, by this Court. 3. That the further liquidation of the affairs, assets, property rights, business and business interests of said defendant Citizens Bank & Trust Company by any other than a receiver of this Court may be forthwith restrained and enjoined both pendente lite and permanently, by appropriate and proper injunction orders and writs against either or both of the parties defendant hereto, and against all, of such parties; that the defendant Ernest Amos as comptroller may be enjoined both pendente lite and permanently from further engaging in or exercising supervision and control over the liquidation of the said defendant bank. 4. That this Honorable Court will appoint a fit and proper person to serve as a receiver to take charge of the business, assets, property rights, and interests of *66 the said defendant Citizens Bank & Trust Company, to administer and liquidate the same for the benefit of its creditors and stockholders as a trust estate under the supervision and control of this Honorable Court, and within the purview of the statutes and general law in such cases made and provided, with a proper bond to be fixed, both in amount and condition, by order of the Court, to be given by such receiver, and upon such proper and appropriate and reasonable compensation as may be by this Court determined and adjudicated for the services of such receiver after the rendition thereof, such receiver to be vested with the power, right and authority to take charge of, custody and control over all of the visible, tangible and intangible existing assets, and its property rights and interest of every kind and character whatsoever, to collect all outstanding debts due the said corporation and to sue for, in the name of such receiver on behalf of such corporation, all of its dissipated, and/or otherwise lost, destroyed, converted, improperly transferred, and diverted assets, to hold such assets and each and all of them as the same may be recovered for the benefit of said corporation, pending the orders of this Court from time to time governing and with respect to their liquidation and distribution among creditors; and with such other adequate, commensurate and appropriate power and authority in the premises as may be required, and to the Court may seem meet. 5. That the defendant corporation, its officers, and agents, may be required to turn over and deliver to a receiver of this Court the books, records, accounts, properties, and assets of every kind and character whatsoever, of the said defendant bank; that the receiver herein applied for may be named and appointed by the Court pendente lite after notice, as well as permanently, and that the injunction and restraining order herein asked for may be issued and granted by the Court pendente lite as well as permanently. 6. That these complainants may have such other and general relief in the premises as to the Court may seem meet and as equity would require.” The Chancellor overruled a general demurrer to the *67 bill of complaint and “decreed that the motion for a temporary injunction and for the appointment of a receiver pendente lite be and the same is hereby denied without prejudice and the right reserved to the complainants herein to renew said motion whenever they deem the facts and circumstances “to warrant”. The defendants were ordered to answer the bill of complaint. A rule in prohibition was issued by this court. By answer to the rule the respondent Circuit Judge avers that “the allegations of insufficient and inadequate statutory administration of the assets of said bank as well as the allegations of the invasion of vested property rights by the Comptroller and his agents are sufficient to invoke the aid of a court of equity to review and restrain the alleged unlawful acts complained of”. In State ex rel. vs. Barnes, Circuit Judge, et al., 99 Fla. 1258, 128 Sou. 860 it is said: “The Comptroller may perform official acts throughout the State and may be amenable to the jurisdiction of the courts where official acts, the subject of litigation in such courts, have been performed. In the exercise of the sovereign power of the State, statutes provide administrative regulations for the supervision of banks and of building and loan associations by the State through the State Comptroller, and also provide that under stated conditions relating to insolvency or illegality of management, the Comptroller may take possession of the property and business of ■such banks and associations; and if necessary or advisable to do so, the Comptroller is by statute authorized to appoint as his agents, liquidators through whom the Comptroller shall administer on such assets and business, the legislative purpose being to facilitate the liquidation and settlement of the affairs of such insolvent banks and associations in the most economical and expeditious manner. Should the Comptroller or his agents violate the law in the statutory administration of the property and business of insolvent banks and building and loan as *68 sociations, the courts may adjudicate controversies or afford appropriate relief as to particular matters that may be involved in such statutory administration. The law does not contemplate that the entire statutory administration of the affairs of an insolvent bank or building and loan association shall be superseded by equity proceedings through a chancery receiver, at least unless it is clearly shown by due allegations and proofs that the statutory administration is inadequate to 'conserve property rights that are secured by the Federal and State Constitutions. See Port Newark Nat. Bank vs. Waldman, 46 F. (2nd) 296, C. C. A.....; Bank of Bay Biscayne vs. Hawkins, 42 Fla. (2nd) 209, C. C. A...... The prayer is not for specific relief respecting the conduct of the Comptroller and his liquidation in administering the assets and business of the insolvent bank, or that the court “review and restrain the alleged unlawful acts complained of” as stated in the order, but the prayer is: (1) that the liquidator “be enjoined both pendente lite and permanently from further engaging in the service of liquidator of the defendant bank, ’ ’ and that such liquidator “be removed and discharged from such liquidatorship by this Court;” (2) that “the further liquidation of the affairs, assets, property rights, business interests of said” bank “by any other than a receiver of .this court may be forthwith restrained and in joined both pendente lite and permanently” * * * that the * * * Comptroller “be enjoined both pendente lite and permanently from further engaging in or exercising supervision and control over the liquidation of the said defendant bank;” (3) that the court appoint a receiver to take charge of the “business, assets, property rights and interests of the said” bank “to administer and liquidate the same;” that the defendant bank “be required to turn over and deliver to a receiver of this Court the books, records, accounts, properties, and assets of every *69 kind and character whatsoever of the said defendant bank ’ ’ &c and for general relief. The allegations of the bill of complaint do not show that the statutory authority of the Comptroller to administer on the assets and business of the bank is not appropriate and adequate to conserve the property rights of the complainants or that such statutory authority is so abused by the Comptroller as to render the statutory system of administering upon the assets and business of the insolvent banks inadequate to protect the property rights of the complainants, and as there is no prayer for relief by requiring the Comptroller and the liquidator to pursue the law in the particulars wherein it is alleged that the law has been violated, the bill of complaint does not state an equity, for the relief prayed. In a ease of this nature an appeal from a decree rendered in accordance with the prayer of the bill of complaint would not afford complete and adequate relief, therefore, prohibition may be invoked. Writ awarded. Terrell, and Brown, J.J., and Gray, Circuit Judge, concur. Bueord, C.J., and Ellis, J., dissent. Davis, J., disqualified.