Sawyer v. Ellis

295 P. 322, 37 Ariz. 443
CourtArizona Supreme Court
DecidedJanuary 19, 1931
DocketCivil No. 2948.
StatusPublished
Cited by13 cases

This text of 295 P. 322 (Sawyer v. Ellis) is published on Counsel Stack Legal Research, covering Arizona Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sawyer v. Ellis, 295 P. 322, 37 Ariz. 443 (Ark. 1931).

Opinion

LOCKWOOD, J.

This is an appeal from an order of the superior court of Yavapai county dismissing a petition of E. A. Sawyer, hereinafter called appellant, to set aside an order directing the payment of fees to John A. Ellis and T. J. Byrne, hereinafter called appellees, as attorneys for the state superintendent of banks, and for other affirmative relief against Ellis. The facts necessary for a determination of this case are not in dispute, and may be stated as follows:

The Prescott State Bank, hereinafter called the bank, was found to be insolvent some time in 1925, and was taken over by the superintendent of banks, *445 as provided by law. Appellant at tbe time of tbe closing of tbe bank was a creditor thereof. His claim had been duly presented and allowed, bnt not yet paid, and it is admitted that 'the assets of the bank were and are not sufficient to pay all the claims allowed. At the time the bank was taken over as above, A. T. Hammons was the superintendent of banks, and appellee Ellis was employed by him as an attorney under an agreement that Ellis should receive an allowance of $175 per month, which should be considered merely as a retainer, and that there should later be a hearing, at which the total value of the legal services should be determined by the court. Ellis performed various legal services under this agreement from the year 1925 up to September 17th, 1929, during part of which time he was assisted therein by T. J. Byrne. In the latter part of the year 1928 Hammons was succeeded as superintendent of banks by James B. Button, who held such office at all times during the progress of this suit.

On September 17th, 1929, appellees filed a petition, setting up the employment of Ellis, the agreement aforesaid, and his services. The petition then further alleged that Button, owing to the date of his appointment, was not at all familiar with the nature and amount of the legal work performed by Ellis and Byrne, and that he had therefore requested petitioners to ask the court to determine the value of such services. The officers of the insolvent bank were duly notified of the hearing, which was held October 30th, 1929, but no notice was given to any of the creditors. Various witnesses testified as to the value of the legal services, and on this evidence the matter was submitted to the court, and the following minute entry was made:

“It is Ordered that said John A. Ellis recover from The Prescott State Bank an attorney fee in the sum of $35,000.00 in addition to the amount already re *446 ceived in the way of monthly salary, and that he recover from the Commercial Trust and Savings Bank an attorney fee in the sum of $10,000.00 in addition to the amount already received as a monthly salary. It is provided, however, that any sum already paid to John A. Ellis by either of said banks as an advance on attorney fee be deducted from the above amounts.”

On November 12th, 1929, the following order was filed:

“It is hereby ordered, adjudged and decreed that the sum and amount of Thirty-Five Thousand Dollars ($35,000.00) be allowed and paid to said attorneys, and .that there be deducted therefrom any amounts heretofore advanced, but excluded therefrom the monthly payments that have been allowed.”

Thereafter, and on November 14th, 1929, appellant filed a petition praying that 'the orders above quoted be set aside and appellees made to account for all moneys received by them, that Ellis be required to pay to the Bank of Jerome, which had become insolvent and was in the same status as the Prescott State Bank, and to the Prescott State Bank, certain debts owing by Ellis to each bank, and that he be made to respond to them for any loss found to have resulted by reason of his misconduct as attorney therefor. Appellees demurred to the petition, and, the matter having been duly presented on the sole question of the jurisdiction of the court to enter the orders complained of, the demurrer was sustained and the petition dismissed, whereupon this appeal was taken.

The only issue which was raised by the petition was whether or not the trial court had the jurisdiction to make the orders questioned. There are numerous allegations of fraudulent conduct on the part of the two banks, and a statement that the superintendent of banks did not use good judgment in his conduct in handling the bank, but nowhere do we find *447 any allegation that the fee allowed by the court was excessive for the services performed. We therefore proceed to the determination of the question of jurisdiction.

Three things are necessary to confer jurisdiction to make an order upon a court: (1) It must have jurisdiction of the subject matter; (2) it must have jurisdiction of the parties; (3) it must have jurisdiction to make the particular order in question. If these three elements concur, although the order may be erroneous for many reasons, it is not void for lack of jurisdiction. Brecht v. Hammons, 35 Ariz. 383, 278 Pac. 381. Under the Banking Code of 1922 (Laws 1922, chap. 31), the superior court has substantially the same power over the superintendent of banks during the liquidation of a bank that it has over a receiver in the ordinary insolvency, and in the case at bar the court unquestionably had jurisdiction of the subject matter.

Did it have jurisdiction of the parties interested? It is urged by appellant that as a creditor he is interested in the funds of the- insolvent bank, and was therefore entitled to notice in any proceeding which might affect them. It is the claim of appellees, on the other hand, that the superintendent of banks represents the creditors to such an extent that no notice to them is required. Section 46 of the Banking Code, supra, reads as follows:

“Section 46. Relations of Court and Superintendent of Banks When Acting as Liquidating Agent. When the affairs of any bank have come into the hands of the Superintendent of Banks for liquidation the relations between the Superior Court and the Superintendent of Banks shall be the same as the relations of the Superior Court and a receiver under the laws now existing, and the Superior Court shall have the same authority and jurisdiction over the Superintendent of Banks in such matters of liquidation as it would over receivers appointed by the Court, unless in this Act otherwise provided.”

*448 Section 44 of the «ame Code vests the sole and exclusive ownership and title of all the property and assets of the bank in the superintendent, and bestows upon him very wide powers in regard to handling its affairs, subject, however, to the orders of the superior court. It would appear therefrom that the superintendent of banks is in the position of a statutory receiver of the insolvent bank.

The question as to whom a receiver represents has often been discussed. Generally speaking, he is not an agent of any of the parties, but is merely a ministerial officer of the court. He stands in an indifferent attitude, not representing either the owners of the insolvent estate or the creditors, but really representing the court and acting under its direction, for the benefit of all the parties in interest.

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Cite This Page — Counsel Stack

Bluebook (online)
295 P. 322, 37 Ariz. 443, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sawyer-v-ellis-ariz-1931.