Freeling v. State ex rel. Sebring

1969 OK 62, 452 P.2d 789
CourtSupreme Court of Oklahoma
DecidedApril 1, 1969
DocketNo. 41887
StatusPublished

This text of 1969 OK 62 (Freeling v. State ex rel. Sebring) is published on Counsel Stack Legal Research, covering Supreme Court of Oklahoma primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Freeling v. State ex rel. Sebring, 1969 OK 62, 452 P.2d 789 (Okla. 1969).

Opinion

JACKSON, Justice.

On July 29, 1960, Carl B. Sebring, State Bank Commissioner, closed the Capitol Hill State Bank of Oklahoma City, Oklahoma, and took the bank into his hands for the purpose of liquidation. As authorized by the provisions of 6 O.S.1961, Section 183, the Commissioner appointed The Federal Deposit Insurance Corporation as liquidation agent and F.D.I.C. accepted the appointment.

Upon taking possession of the Bank it was the duty of the Commissioner to make an inventory of the assets and liabilities of the Bank and to file a copy with the Court Clerk of Oklahoma County, the county in which the bank had been doing business. 6 O.S.1961, Sec. 162m. It was the duty of the Court Clerk of Oklahoma County to enter the inventory upon the docket of the Court under a proper number and title. Section 162m, supra. So far as we are [791]*791able to determine from the record, the number assigned was 150,801 on the District Court Docket, Oklahoma County.

During the process of liquidation, and for the purpose of securing the assets of the Bank, the Bank Commissioner brought the instant action entitled State of Oklahoma ex rel. Carl B. Sebring, State Bank Commissioner of Oklahoma, acting by and through Federal Deposit Insurance Corporation, a Corporation, Liquidating Agent, Plaintiff, vs. * * * James R. Freeling, et al. In the First Cause of Action plaintiff sought a money judgment against the defendants in excess of one- and one-half million dollars. The jury was unable to agree upon a verdict and a mistrial was declared upon the First Cause. As to the Second and Third Causes of Action, tried without a jury, the court found that the 1100 shares of stock of the Bank had been purchased by defendant Freeling and others with money that belonged to the Bank and at a time when the purchasers were occupying a fiduciary relationship with the Bank. The court decreed that the stock of the Bank and its Building Corporation was held in trust for the benefit of the State of Oklahoma, ex rel. Carl B. Sebring, Bank Commissioner, as trustee for those lawfully entitled thereto as distributees of the assets of the Capitol Hill State Bank in liquidation in Cause No. 150,801, supra.

Defendant Freeling has appealed and states in his brief that this appeal is not on the merits of this case, but rather is addressed to whether the jurisdiction of the trial court was invoked; whether any claim against the defendant Freeling for relief of any kind was forfeited; whether the Court lost jurisdiction because of such forfeiture; and whether the claim against the defendant Freeling was released by a settlement by judgment and release of the alleged joint tort-feasors, Houlihan’s companies.

The record shows that defendant Freel-ing was president and director of the bank until removed by the Bank Commissioner on or about July 29, 1960. At the time the Bank was seized defendant Freeling had current wages due in the sum of $331.25. He filed a claim which was approved, but not paid. Defendant alleged in his answer that the liquidating agent, F.D.I.C., withheld payment of all of Freeling’s wages due as an off-set against the claim sued on herein; and that the withholding of all of his wages, a portion being exempt from seizure under the provisions of 31 O.S. 1961, Section 4, constituted a forfeiture of any debt owed by defendant. The trial court held that the seizure of defendant’s wages did not constitute a forfeiture of any debts due by defendant, and struck the allegation regarding defendant’s wages from his answer without prejudice to any lawful claim defendant might have for wages in Cause No. 150,801, supra.

Defendant’s argument is presented under the following proposition:

“The seizing by the plaintiff of the exempt wages of the defendant Freeling and the holding of the same as an offset against the alleged debt or obligation sued upon, was violative of the rights of the defendant Freeling under the homestead statutes (31 O.S.1961, Secs. 1 (16), and 4), caused the alleged debt or obligation sued upon to be cancelled and the trial court had no jurisdiction thereafter to proceed with this cause. The trial court erred in striking this defense from the amendment of motion to elect and motion to dismiss, answer, amended answer and second amended answer.”

31 O.S.1961, Secs. 1 and 4, supra, provide in substance that 75% of current wages or earnings for personal or professional services are exempt from execution or attachment, and Section 4 provides that any person or firm, either personally or by agent, violating this provision by attaching or taking more than 75% shall forfeit the entire debt or obligation sought to be satisfied.

We are of the view that the trial court correctly held that the forfeiture provision of Section 4, supra, is not applicable to wages seized by the Bank Commissioner [792]*792under the provisions of 6 O.S.1961, Sec. 162 et seq. The record shows that the Bank Commissioner allowed defendant’s claim for wages under the provisions of Sec. 1621, supra. Section 162n, supra, provides that the title to moneys collected by the Commissioner in liquidating a bank shall be vested in the State of Oklahoma, upon the relation of the Commissioner. Section 162n authorizes the Commissioner, after a specified time, to declare one or more dividends but specifically provides that dividends “shall not be paid except by order of the District Court having jurisdiction of the liquidation of such insolvent bank, upon such notice as may be directed by the Court * * The trial court correctly held that defendant’s claim for wages must be considered in Cause No. 150,801, supra, and that the seizure and retention of defendant’s wages did not cause the alleged debt or obligation of defendant to be cancelled.

In defendant’s second proposition it is said:

“The Federal Deposit Insurance Corporation has no authority to institute an action through its attorneys on behalf of the State of. Oklahoma. The trial court erred in overruling the defendant Freel-ing’s motion to dismiss and in striking this defense from the defendant Freel-ing’s answer.”

6 O.S.1961, Section 162h provides in part that the Bank Commissioner shall have power and authority to institute and prosecute all suits necessary for the liquidation of the assets of the insolvent corporation taken over by him, and such suits shall be brought in the name of the State of Oklahoma, on relation of the Bank Commissioner. As heretofore noted this action was instituted by “State of Oklahoma, ex rel. Carl B Sebring, acting by and through the Federal Deposit Insurance Corporation, liquidating agent, et al. 6 O.S.1961, Sec. 183, supra, authorizes the Bank Commissioner “to tender to said corporation (F.D.I.C.) the appointment as liquidating agent for such close banking institution”, and further provides:

“* * * Upon the acceptance of such appointment the said Corporation shall have and possess all the duties, powers and privileges granted by the laws of this State to individual liquidating agents, attorneys or employees designated by the State Bank Commissioner * * * »

Defendant invites our attention to the pertinent provisions of 74 O.S.1961, Section 18c, adopted in 1947, and subsequent to the adoption of 6 O.S.1961, Secs. 162h and 183, supra. Section 18c provides in pertinent part that:

“ * * * no State Officer * *

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Bluebook (online)
1969 OK 62, 452 P.2d 789, Counsel Stack Legal Research, https://law.counselstack.com/opinion/freeling-v-state-ex-rel-sebring-okla-1969.