Opinion
No. 26741
Decided February 9, 1938.
Ranks and banking — Liquidation — Custodianship of Superintendent of Banks over property exclusive, when — Jurisdiction vested in Common Pleas Court where discretion abused — Sections 710-95 and 710-101, General Code — Stockholder sued for superadded liability entitled to inspect bank books, when — Superintendent of Banks in custody of trust company liquidating bank — Writ of prohibition against Common Pleas Court denied.
IN PROHIBITION.
The Ohio State Bank of Cleveland entered into an agreement with The Guardian Trust Company of Cleveland, by which the latter agreed to assume, pay and discharge substantially all the liabilities of The Ohio State Bank, and that bank agreed to transfer substantially all of its assets to the trust company to liquidate such assets, apply the proceeds thereof to the expense of liquidation, to reimburse The Guardian Trust Company for liabilities assumed, and to pay any excess remaining after expenses and reimbursements to The Ohio State Bank. Pursuant to that agreement The Ohio State Bank transferred assets to The Guardian Trust Company, which dealt with and liquidated such assets in its trust department until that company was taken over for liquidation by the Superintendent of Banks who also took over for liquidation The Ohio State Bank.
The Superintendent of Banks, as liquidator of The Guardian Trust Company, filed a claim against The Ohio State Bank, and also filed separate petitions against the stockholders of that bank for superadded liability in an amount of seventy-five per cent of the par value of the stock held or owned by them, with interest.
A demand was made upon the Superintendent of Banks for permission to audit and inspect the books and records of both The Guardian Trust Company and The Ohio State Bank, which demand or request was refused by the Superintendent of Banks.
Philip Spira, on behalf of himself and other similarly situated stockholders, filed a petition in the Court of Common Pleas of Cuyahoga county against the Superintendent of Banks and The Guardian Trust Company, in which he pleaded that unless an inspection and audit were granted he would be unable to maintain a defense to the action against him for super-added liability; that the Superintendent of Banks was about to allow the claim against The Ohio State Bank, filed by him as liquidator of The Guardian Trust Company against himself as liquidator of The Ohio State Bank, and was about to publish the claim. That petition prayed for an order against the defendants, to be effective during the pendency of the litigation:
"1. Enjoining the Superintendent of Banks, as liquidator of the Guardian Bank, from asserting and prosecuting the claim of Guardian Bank against Ohio State Bank;
"2. Enjoining the Superintendent of Banks, as liquidator of Ohio State Bank, from allowing any claim presented by the Superintendent of Banks, as liquidator of the Guardian Bank, and from publishing such claim in the list of claims presented to him as liquidator of Ohio State Bank;
"3. Enjoining the Superintendent of Banks from further prosecution of the suits filed by him as liquidator of Ohio State Bank against the stockholders of Ohio State Bank."
Upon motion for a temporary restraining order seeking the same relief, the Court of Common Pleas, upon the evidence, briefs and arguments of counsel, granted the motion in part, enjoining the Superintendent of Banks, pending final determination of the cause, "from allowing any claim against Ohio State Bank of Cleveland which has been or may be presented to him by the said Superintendent of Banks in charge of the liquidation of The Guardian Trust Company of Cleveland, and from publishing any such claim in the list of claims piesented to him as liquidator of The Ohio State Bank of Cleveland."
The Attorney General seeks from this court a writ prohibiting the Court of Common Pleas from proceeding further upon the petition or application for temporary restraining order. A demurrer was filed by respondents.
Mr. Herbert S. Duffy, attorney general, Mr. Will P. Stephenson, Mr. Robert J. Selzer and Mr. Joseph L. Heffernan, for relator.
Messrs. Horwitz, Kiefer Harmel, for respondents.
In Commercial Bank Savings Co. v. Woodville Savings Bank Co., 126 Ohio St. 587, 186 N.E. 444, this court held that "the jurisdiction of the Superintendent of Banks, over the property of a state bank, is exclusive, except in so far as it is limited by Section 710-101, General Code." While that is true, so far as the custodianship of the property is concerned, this court has never held that the acts of the superintendent in administering the property are not subject to review by the courts. Under the specific provisions of Section 710-95, General Code, the Court of Common Pleas is given jurisdiction in a suit in equity if the superintendent "has exceeded or abused such powers and discretion."
In this controversy, Spira is a stockholder in The Ohio State Bank of Cleveland, and it is claimed by the Superintendent of Banks that that institution is indebted to the Guardian Trust Company of Cleveland.
From the allegations of the petition filed in this court we find Spira is attempting to resist and defend against the claim which the superintendent is presenting upon behalf of The Guardian Trust Company against himself as custodian of The Ohio State Bank.
In order to determine the justice of the claim, Spira sought an examination of the books of The Guardian Trust Company which had acted as liquidating agent for The Ohio State Bank. This request was refused. If stockholders of The Ohio State Bank do not have the right to inquire into the validity of this claim, no one but the superintendent has such a right.
In view of the fact that the superintendent was in charge of both banks and an inspection of the books was refused, we are of the opinion that such facts would show a prima facie case of abuse of discretion on the part of the superintendent. The right to demand an inspection of books by a stockholder has been enforced in this state by an injunction ( Cincinnati Volksblatt Co. v. Hoffmeister, 62 Ohio St. 189, 56 N.E. 1033, 48 L.R.A., 732, 78 Am. St. Rep., 707; American Mortgage Co. v. Rosenbaum, 114 Ohio St. 231, 151 N.E. 122, 59 A.L.R., 1368; 10 Ohio Jurisprudence, 394, 395, Section 280) and Section 710-95, General Code, specifically authorizes actions in equity where there has been an abuse of discretion by the superintendent.
Since the Court of Common Pleas has jurisdiction of the action, it is not proper in this proceeding to determine whether the scope of the temporary injunction was greater than the facts warranted. The writ of prohibition is not available as a substitute for a proceeding on appeal ( Silliman v. Court of Common Pleas of Williams County, 126 Ohio St. 338, 185 N.E. 420; Jones v. Court of Appeals of Seventh District, ante, 116) or to anticipate an erroneous decree by the Court of Common Pleas in deciding the injunction proceeding on its merits. State, ex rel. Carmody, v. justice, Judge, 114 Ohio St. 94, 150 N.E. 430.
The demurrer to the petition is therefore sustained.
Demurrer sustained.
WEYGANDT, C.J., MATTHIAS, DAY, ZIMMERMAN, WILLIAMS, MYERS and GORMAN, JJ., concur.