42 N.E.2d 160
Nos. 29049 and 29067Supreme Court of Ohio.
Decided May 27, 1942.
Banks and Banking — Liquidation — New bank organized — Participation certificates issued to depositors and creditors of old bank — Application by Superintendent of Banks to pay cash-and-stock dividend — Certificate holder party to liquidation proceeding and entitled to appeal — Mandamus denied to compel payment of cash dividend — Writ not issued to control discretion — Or as substitute for appeal and contempt proceedings — Sections 710-98, 12285 and 12228-3 et seq., General Code.
IN MANDAMUS.
Cause No. 29049 is a proceeding in mandamus which originated in this court and is now submitted on a general demurrer to the petition.
The allegations of the petition will be summarized
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so as to make plain the legal question raised by the demurrer.
The relatrix, R. Bertha Steckhan, who sues in her own right and on behalf of other persons similarly situated, seeks a writ of mandamus against the respondents, W.L. Hart, as Superintendent of Banks, and E.D. Fritch, a judge of the Common Pleas Court of Summit county, Ohio, to compel payment of a 20 per cent dividend to depositors and creditors of the old The First-Central Trust Company of Akron (who held certificates of participation) wholly in cash instead of 16 per cent in cash and 4 per cent in stock of the new The First-Central Trust Company. This stock is held in trust by the Superintendent of Banks for such depositors and creditors and consists of 78,250 shares, which at a valuation of $11 per share would produce the equivalent of a 4 per cent cash distribution.
On June 21, 1933, the Superintendent of Banks took possession of the business property and assets of The First-Central Trust Company of Akron (the old bank). On November 21, 1933, a plan for resumption of business by the bank was approved whereby $1,300,000 of assets of the old bank, of which possession previously had been taken by the Superintendent of Banks, were turned over to The First-Central Trust Company (new bank). The capital stock of the new bank consisted of 148,329 shares of the par value of $5 each. In accordance with the plan this stock was delivered to The National City Bank of Cleveland, Ohio, to be held for the benefit of depositors and creditors of the old bank who were given certificates of participation as therein provided. These certificates of participation were issued to depositors and creditors who were to participate in distributions to be made on liquidation as set out in the plan. The plan provided further that, if three years after the resumption of business by the new bank the depositors and creditors of the old bank had not been paid in full pursuant to the certificates
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of participation, the Superintendent of Banks could sell as many shares as necessary to make full payment.
On or about April 5, 1937, the Superintendent of Banks held a public auction and as superintendent bid $12 per share for 65,026.6 shares of such stock. No higher bid was received and the superintendent retained possession of such shares. Later additional shares were received by him in the liquidation of the remaining assets so that at the time in question he had 78,250 shares as above stated. Under the plan of resumption the Superintendent of Banks was authorized to liquidate the assets coming into his hands under the plan and to do all things necessary thereto.
On or about December 29, 1941, the Superintendent of Banks filed an application in the proceedings for the liquidation of the old bank in the Court of Common Pleas of Summit county, asking authority to pay a 20 per cent dividend to depositors and creditors of the old bank who held certificates of participation under the plan of resumption, 16 per cent of such dividend to be paid in cash and 4 per cent by distributing in kind such 78,250 shares of stock in the new bank. Notice of the filing of such application and hearing thereon was published on December 30, 1941, and January 13, 1942, in the Akron Beacon Journal, a newspaper of general circulation in Summit county, the hearing on such application being duly set for January 15, 1942. On the date set a hearing was had, evidence taken, and the application granted.
On February 20, 1942, the relatrix, a depositor and holder of a certificate of participation, filed her petition herein, setting forth the foregoing facts and praying for a peremptory writ of mandamus commanding and directing the Court of Common Pleas and E.D. Fritch, as a judge thereof, to set aside and vacate the part of the order that provided for distribution of the 78,250 shares of stock as a 4 per cent dividend and commanding and directing the respondent, W.L. Hart,
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as Superintendent of Banks, to sell such stock in accordance with the plan of resumption and the statutes with respect to the liquidation of closed banks.
In cause No. 29067 the relators, Hugo W. Hofman and Grant M. Wills, depositors and holders of participation certificates, filed their petition in this court alleging substantially the same facts as set forth in the petition in cause No. 29049, and seeking a writ of mandamus to compel the respondent, W.L. Hart, as Superintendent of Banks, to distribute such 78,250 shares of stock as ordered by the Court of Common Pleas.
Each case is submitted on a general demurrer to the petition.
Mr. Isadore Topper and Messrs. Gottwald, Hershey Hatch, for relatrix, in cause No. 29049.
Mr. Thomas J. Herbert, attorney general, Mr. Clemens R. Frank
and Mr. Ross R. Ormsby, for respondent, W.L. Hart, superintendent of banks, in cause No. 29049.
Messrs. Wise, Roetzel Maxon and Mr. William A. Kelly, for respondent, E.D. Fritch, judge, in cause No. 29049.
Messrs. Slabaugh, Seiberling, Guinther Pflueger and Messrs. Brouse, McDowell, May Bierce, for relators, in cause No. 29067.
Mr. Thomas J. Herbert, attorney general, and Mr. Clemens R. Frank, for respondent, in cause No. 29067.
BY THE COURT.
Cause No. 29049 will be considered first.
In making the order distributing the 78,250 shares of stock as a dividend in the liquidation proceeding the Court of Common Pleas acted under Section 710-98, General Code, which in part reads:
“As soon as practicable after the expiration of the date fixed for the presentation of claims, the Superintendent
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of Banks may, out of the funds remaining in his hands after the payment of expenses, declare one or more dividends. Each such dividend shall be paid to such persons and in such manner and amounts and upon such notice as may be directed by the Court of Common Pleas in which the proceedings for the liquidation of such bank are pending, or a judge thereof.”
Does this section vest the Court of Common Pleas with a discretion? By the very language employed the manner and the amounts to be paid are under the direction of the court. Then there was an interpretation of the statutes to be made. For example, Judge Fritch conducted a hearing upon the application for an order permitting payment of the dividend partly in cash and partly in stock, permitted evidence to be introduced, and necessarily passed upon the question whether the term “fund” included the shares of stock involved here now, holding that the terms of the statute were sufficiently broad to permit the distribution of such stock in kind. He had the matter before him and a decision was rendered. He could not decide without exercising discretion and this court cannot control the judicial discretion of an inferior tribunal. Section 12285, General Code. We can only conclude that to issue the writ as prayed for would be to control the discretion of a judge of the Court of Common Pleas in a matter properly before him.
It is suggested, however, that relatrix was not a party to the liquidation proceeding in the Court of Common Pleas and so had no right to be heard and could not appeal.
Notice was provided for in the statute and was given in that proceeding. What was its purpose? Evidently the purpose was to give creditors and depositors, holding participation certificates, an opportunity to come into court and be heard in opposition to the application. So other reason for the notice is apparent. Furthermore an order on such an application
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would affect a substantial right and be final. The Constitution (Section 6, Article IV) empowers the Courts of Appeals to review judgments of inferior courts of record within the district, and “judgments” as used therein includes final orders. The manner and method of perfecting an appeal from the Court of Common Pleas to the Court of Appeals are prescribed by Section 12223-3 et seq., General Code. We cannot support relatrix’s contention that she and others similarly situated had no right to be heard and therefore no right of appeal.
For the reasons given the demurrer must be sustained and a writ denied.
In cause No. 29067, a writ of mandamus is sought to compel the Superintendent of Banks to distribute the 78,250 shares of stock as directed by the Court of Common Pleas. That court has full power to enforce its own orders and there is no reason why this court should interfere. Under such circumstances there is a remedy in the ordinary course of law by proceedings in contempt in the lower court and a writ of mandamus will not lie. Therefore this demurrer must also be sustained and a writ denied.
Writs denied.
WEYGANDT, C.J., WILLIAMS, MATTHIAS, HART and ZIMMERMAN, JJ., concur.
TURNER, J., dissents in cause No. 29049 and concurs in cause No. 29067.
BETTMAN, J., not participating.
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