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State v. Wildes

December 31, 1911

THE STATE OF NEVADA, EX REL. EUGENE HOWELL, AS BANK EXAMINER, PETITIONER, V. FRANK L. WILDES, AS RECEIVER OF STATE BANK AND TRUST COMPANY (A CORPORATION), RESPONDENT.


Cleveland H. Baker, Attorney-General, and James R. Judge, Deputy Attorney-General, for Petitioner.

Mack, Green, Brown & Heer, for Respondent.

By the Court, Norcross, J.:

This is an original proceeding in mandamus brought by the state, upon the relation of the state bank examiner, to compel the respondent, Frank L. Wildes, as receiver of the State Bank and Trust Company, to deliver and surren

[34 Nev. 94, Page 112]

der to the relator, as state bank examiner, the custody, possession, and control of the State Bank and Trust Company, and all other property and accounts of whatever kind and nature which he now has in his custody, possession, or control as such receiver of said State Bank and Trust Company. The application for the writ is based upon the provisions of section 79 of an act entitled “An act to regulate banking and other matters relating thereto,” approved March 22, 1911 (Stats. 1911, p. 291), which section reads:

“Sec. 79. Within ten days after the approval of this act the bank examiner shall take possession of all banks and their property and accounts of whatsoever kind and nature which may now be in the custody or possession or control of any receiver or receivers heretofore appointed under the laws of this state; and said bank examiner shall thereupon proceed to administer, liquidate and settle the same as in this act provided, in so far as is necessary to complete the settlement and liquidation of the assets, business and affairs of such banks. And it is hereby made the duty of all such receivers, their agents, employees and representatives to turn over and deliver to said bank examiner, or deputy examiner appointed by him, all real and personal property, accounts, moneys, evidences of indebtedness and securities therefor, books and things of every description belonging to such bank or banks, or relating to their business, together with the possession and custody thereof; provided, that the bank examiner shall permit any such receiver to inspect such books, papers and other memoranda, or the property and things so turned over and delivered to said bank examiner, for the purpose of preparing his final accounts; and it is hereby made the duty of all receivers of banks now holding office under appointment by any court in this state, within sixty days after the approval of this act, to file with the clerks of the respective courts from which the respective appointments of said receivers issued, a full and complete statement and accounting of all their acts, receipts and disbursements, with proper vouchers, of their

[34 Nev. 94, Page 113]

respective receiverships, and receive their discharges from such courts when such final accounts are duly accepted and approved by said courts. And such receivers shall also deliver to the bank examiner a true and correct copy of said statement and accounting so made to the court, together with a full and complete statement of all debtors and creditors of such respective banks and receiverships, with the amount due from or to each of such debtors or creditors; and the terms and conditions of such indebtedness; provided, also, that no suit, action or proceeding which may have been begun by such receiver or receivers, or in which he or they is or are a party or parties, and no right of action which may have accrued to him or them, shall be avoided or rendered ineffectual by anything herein contained, or done pursuant hereto; but such suits, actions, proceedings and rights of action may be carried on and continued and shall inure to such bank examiner for the use and benefit of such respective trusts, as fully and effectually as if such receiver or receivers had continued as such; and the bank examiner shall not dismiss any such action, suit or other proceeding except on the order and approval of the state banking board. And the said bank examiner shall be substituted for any such receiver or receivers in any such action or proceeding now pending in which any such receiver or receivers is or are a party or parties. All attorneys, agents, clerks and assistants now in the employ or acting for and in behalf of any such receiver or receivers shall continue to act in the same capacity, and on the same terms and conditions, until such time as the bank examiner and state banking board shall otherwise provide. All contracts and agreements heretofore entered into by any such receiver duly authorized by the courts by which such receiver was appointed, shall be equally binding on said bank examiner for the use and benefit of such trust, and the bank examiner shall be deemed to be substituted for such receiver in all such contracts and agreements. For the purpose of carrying out the provisions of this section, and subject to the approval of the state banking board,

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the bank examiner shall appoint such special deputies, clerks, assistants and attorneys as shall be deemed necessary, and fix their compensation, same to be paid out of the funds and assets of the said respective trusts for the settlement and liquidation of which such special deputies, clerks, assistants and attorneys are appointed or employed.”

The respondent, Frank L. Wildes, as receiver of the said State Bank and Trust Company, came into possession of the said bank, and all other property thereof, under and by virtue of a judgment and decree of the First Judicial District Court of the State of Nevada, in and for Ormsby County, made on the 18th day of May, 1908, in an action brought by the State of Nevada, on the relation of the board of state bank commissioners, against the State Bank and Trust Company and the directors thereof, wherein it was adjudged that it was unsafe for the said State Bank and Trust Company to continue business, and ordered said company into involuntary liquidation, enjoined the directors of said company from transacting any of its business affairs, appointing the respondent receiver of said company, and directing the then bank examiner to deliver and surrender to said receiver all the property and effects of said defendant corporation.

The judgment and decree ordering the State Bank and Trust Company into involuntary liquidation and appointing the respondent herein as receiver was made under and by virtue of the provisions of section 10 of an act entitled “an act creating a board of bank commissioners, defining its duties, providing for the appointment of a bank examiner, prescribing his duties, fixing his compensation, providing penalties for the violation of the provisions of this act, and other matters relating thereto,” approved March 26, 1907 (Stats. 1907, c. 119), which section, in part, reads as follows:

“Sec. 10. If the bank examiner, on the examination of the affairs of any corporation mentioned in section 4 of this act, shall find that any such corporation * * *

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is conducting business in an unsafe manner * * * or if it shall appear to said examiner that it is unsafe for any such corporation to continue to transact business, it shall be the duty of such examiner to immediately report the condition of such corporation to the bank commissioners; and if the bank commissioners, either from the report of the bank examiner, or from their own knowledge, decide that it is unsafe for any such corporation to continue to transact business, they shall authorize the bank examiner to take such control of such corporation, and of the property and effects thereof, as may be by them deemed necessary to prevent waste, or diversion of the assets, and to hold possession of the same until the order of court hereinafter mentioned, and it is hereby made the duty of the attorney-general, upon being notified by the bank commissioners, to immediately commence suit in the proper court against such corporation and the directors and trustees thereof to enjoin and prohibit them from the transaction of any further business. If upon the hearing of the case the court shall find that such corporation is solvent, and may safely continue business, it may dismiss the action, and order that the corporation be restored to the possession of the property. But if the court shall find that it is unsafe for such corporation to continue business, or that such corporation is insolvent, said court shall by its decree order such corporation into involuntary liquidation, and shall issue the injunction applied for, and shall cause the same to be served according to law, and shall order the examiner to surrender the property of the corporation in his possession to a receiver appointed by the court for the purpose of liquidation in such proceeding, under the orders and directions of the court. * * *”

That the decree ordering the State Bank and Trust Company into involuntary liquidation and appointing a receiver thereof was a final judgment is conceded in this proceeding. It was treated as a final judgment by the parties to the proceeding, an appeal having been taken to this court by the defendants in the action, upon the

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theory that the same was a final judgment, and the judgment affirmed. (State v. State Bank and Trust Co., 31 Nev. 456.) See, also, Chicago Life Ins. Co. v. Auditor, 100 Ill. 478.

The respondent, in his answer, and counsel for respondent, in their brief, have attacked the banking act of 1911 as violative of the constitution, particularly section 79 thereof. It is unnecessary to consider many of the constitutional questions raised, and it would not be proper to do so, in the event any of the objections made to section 79 can be well taken. We think it unnecessary to go further than to consider the objection that the legislature is without power to modify or annul the final judgment of a court. By section 1 of article 6 of the constitution, the judicial power of the state is vested in a supreme court, district courts, justices of the peace, and such other courts as the legislature may establish for municipal purposes only in incorporated cities and towns, and by section 1 of article 3 it is provided: “The powers of the government of the State of Nevada shall be divided into three separate departments—the legislative, the executive, and the judicial; and no persons charged with the exercise of powers properly belonging to one of these departments shall exercise any functions appertaining to either of the others, except in the cases herein expressly directed or permitted.”

By the judgment entered in the case of The State v. State Bank and Trust Company, et al., all the property and interests of the bank were placed in the hands of the receiver, for the purpose of liquidation in such proceeding, under the orders ...


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