Elm Creek State Bank v. Department of Banking

216 N.W.2d 883, 191 Neb. 584, 1974 Neb. LEXIS 913
CourtNebraska Supreme Court
DecidedApril 4, 1974
Docket39211
StatusPublished
Cited by8 cases

This text of 216 N.W.2d 883 (Elm Creek State Bank v. Department of Banking) is published on Counsel Stack Legal Research, covering Nebraska Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Elm Creek State Bank v. Department of Banking, 216 N.W.2d 883, 191 Neb. 584, 1974 Neb. LEXIS 913 (Neb. 1974).

Opinions

McCown, J.

This is an action by a state bank to enjoin further [585]*585administrative proceedings by the Director of Banking, State of Nebraska, after the Director had taken possession of the bank and declared its insolvency in accordance with section 8-194, R. R. S. 1943. The action here was brought under the provisions of section 8-195, R. R. S. 1943. At the hearing the plaintiff bank requested a continuance. Upon denial of the continuance, the plaintiff bank refused to proceed and the court granted the motion of the Department of Banking, to deny the plaintiff bank any relief. The bank has appealed.

On April 20, 1973, the Department of Banking of the State of Nebraska, through its Director, took possession of the Elm Creek State Bank of Elm Creek, Buffalo County, Nebraska, in accordance with the provisions of sections 8-187 and 8-188, R. R. S. 1943. On May 8,-1973, the Director of Banking- filed a declaration of insolvency of the Elm Creek State Bank in the District Court for Buffalo County, as provided by section 8-194, R. R. S. 1943, together with an inventory of the property, assets, and liabilities of the bank, as provided in section 8-192, R. R. S. 1943. These filings were designated as case No. 3382.

On May 16, 1973, the Elm Creek-State Bank filed this proceeding in the District Court for Buffalo County against the Department of Banking and Henry E. Ley, Director, under the authorization granted in section 8-195, R. R. S. 1943: The initial pleading was designated as a motion for an order -to show cause. The filings by plaintiff bank were designated as case No. 3393. On the same day, May 16, 1973, the court notified the parties that the,motion for equitable relief would be heard on its merits on May 19, 1973. On that date the bank filed its motion to disqualify’the trial judge. The trial judge disqualified himself and on May 21, 1973, the successor trial judge set the matter for hearing on-June 4, 1973; and directed, counsel for each party to submit a trial brief not later than May 30, 1973. On May 24, 1973, the [586]*586Federal Deposit Insurance Corporation filed its petition to intervene in case No. 3393, alleging that it had been in possession of all the assets of the Elm Creek State Bank since May 8, 1973; had begun making payments to depositors on May 19, 1973; and that the Elm Creek State Bank was insolvent. On May 29, 1973, the Federal Deposit Insurance Corporation was allowed to intervene and was made a party.

On June 4, 1973, after two continuances until later in the day, the bank filed an amended motion to inspect and copy certain records. The motion was sustained as to the first four paragraphs and overruled as to the balance. Based on stipulation of counsel, cases Nos. 3382 and 3393 were ordered consolidated and the matter was continued until the following day.

On June 5, 1973, the Department of Banking filed its response to the motion for order to show cause. On June 5, 1973, the Elm Creek State Bank filed a “motion for discovery,” alleging that it was necessary to take the depositions of 10 individuals. The motion stated that six of the persons were individual customers or borrowers having material information as to their transactions with the bank. Another individual was an allegedly hostile witness involved in an application for a national bank in Elm Creek. Two individuals were employees of the Federal Deposit Insurance Corporation, and one was the Director of Banking for the State of Nebraska, who was an individual party. The testimony of these four was indicated to be material to establish the motivation for the proceedings against the bank. The only reason stated in the motion as justification for taking these requested depositions was that the trial court had stated that plaintiff “is required to sustain the burden of proof * * *.” Along with the “motion for discovery,” the Elm Creek State Bank filed a motion for continuance. The only ground stated in support of the motion for continuance was to give the [587]*587plaintiff bank time to complete the depositions referred to in the “motion for discovery.”

The judge’s minutes show that the motion for continuance was overruled and that the bank was ordered to proceed to trial and refused to proceed. The Department of Banking moved that the bank’s motion to set aside the order of the banking department be denied. That motion was sustained and the bank’s motion for relief was denied. Thereafter the motion of the Elm Creek State Bank for a new trial was overruled and this appeal followed. There is no bill of exceptions, but the transcript is 467 pages.

This case turns upon the issue of who had the burden of proving the solvency or insolvency of the Elm Creek State Bank in a proceeding under section 8-195, R. R. S. 1943. A secondary issue is whether or not the refusal to grant a motion for continuance made on the day set for trial was an abuse of discretion.

Section 8-195, R. R. S. 1943, provides: “Whenever any bank of whose property and business the director has taken possession or whose insolvency has been declared as provided in section 8-194 deems itself aggrieved thereby, it may, at any time not later than ten days after such declaration of insolvency has been filed with the clerk of the district court of the county in which the bank is located, petition the district court to enjoin further proceedings, and the court, after citing the director to show cause why further proceedings should not be enjoined, and hearing the allegations and proofs of the parties and determining the facts, may, upon proof by the bank, its officers or directors, that it is solvent, that the business of the bank has been and is being conducted as provided by law, that it is not endangering the interests of its depositors and other creditors, and that the director has acted arbitrarily and abused his discretion either by taking possession of the bank or by finding and declaring the bank to be [588]*588insolvent and ordering its liquidation, set aside such declaration of insolvency and enjoin the director from proceeding further, and direct him to surrender the business and property to the bank. On proof that the bank is insolvent and that its stockholders have, failed to restore solvency as provided by law, or that the bank is being operated in violation of law, and that the director has acted within his powers, the petition shall be dismissed by the court.”

: This section provides the statutory method of appeal or collateral attack upon a determination of insolvency of a state bank made by the Director of Banking under the provisions of section 8-194, R. R. S. 1943.

The transcript here reflects a maze of confusion, both substantive and procedural. There is no “petition” by the plaintiff but only a motion for an order to show cause, which we shall treat as an initial pleading to institute the action. There is no order to show cause, but we shall treat the court’s notification that the motion for equitable relief would be heard on a specified date sufficient notice. There are no findings of fact nor is there any journal entry of judgment. Only the judge’s minutes are available and for the purposes here, we shall assume that the minutes showing the plaintiff bank’s motion for relief is denied was intended also to constitute a dismissal of the proceedings.

' Whether the proceedings instituted by a state bank under section 8-195, R. R. S. 1943, are regarded as an appeal or as a statutory form of collateral attack is actually immaterial.

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Elm Creek State Bank v. Department of Banking
216 N.W.2d 883 (Nebraska Supreme Court, 1974)

Cite This Page — Counsel Stack

Bluebook (online)
216 N.W.2d 883, 191 Neb. 584, 1974 Neb. LEXIS 913, Counsel Stack Legal Research, https://law.counselstack.com/opinion/elm-creek-state-bank-v-department-of-banking-neb-1974.