October 17, 1930.
Before TOWNSEND, J., Pickens. February, 1930. Affirmed.
Action by W.L. Traynham and others against L.H. Smith and others. On petition of J.L. Love, as receiver of the Easley Loan Trust Co., to be made party plaintiff. The demurrer of the receiver to the complaint was sustained and the complaint dismissed and plaintiffs appeal.
The order of the Circuit Judge, Townsend, requested to be reported, is as follows:
This matter comes before me on a petition by J.L. Love, as receiver of the Easley Loan Trust Company, to be made a party defendant in the above-entitled action brought by W.L. Traynham and others, depositors in said loan and trust company, against the stockholders of said loan and trust company, for the enforcement of their stockholders' liability, in order that said receiver might demur to the complaint in said action and determine the rights of the plaintiffs to amend the same.
The attorney for the plaintiff consents to the order making the receiver a party to the action in order that the questions which he desires to raise may be presented to the Court, and that those questions may now be considered on an oral demurrer to the complaint. The receiver demurs to the complaint upon the ground that, under the provisions of the Act March 16, 1929, § 6, 36 Statutes at Large, pages 199, 200, the receiver is the party designated by the statute to bring the action to recover upon the stockholders' liability for the benefit of the depositors.
The counsel for the plaintiffs argue that the Act of 1929 is permissible merely and does not preclude the institution of the action by the plaintiff prior to the appointment of the receiver for the bank; and, even though the Act imposes a duty upon the receiver to bring such action, the power to bring it is not exclusive.
Upon consideration of the grounds of the demurrer and argument in opposition thereto, I hold that the purpose of the Act of 1929 was to give the primary right to the receiver to bring such action for the benefit of the depositors, and that no depositor had a right to bring a separate action to enforce such liability until the receiver appointed by the Court has refused to do so upon the demand of the depositors. It appears that this action was commenced before the appointment of a receiver and without any application to the Court for the appointment of a receiver to bring such action.
The demurrer by the receiver to the complaint is therefore sustained, and the complaint dismissed, with leave to the receiver to institute such action as contemplated by the statute; and upon his failure to institute such action within ten days, that then the plaintiffs be allowed to commence a new action on their own account.
Mr. B.F. Martin, for appellant, cites: Right of depositors to bring action on stockholders' liability not destroyed by 36 Stat., 199; 140 S.C. 14; 138 S.E., 401; 138 S.C. 424; 136 S.E., 888; 138 S.C. 409; 136 S.C. 885; 131 S.C. 54; 126 S.E., 399; 36 Cyc., 1145; 25 R.C.L., 1954; 74 A.S.R., 20; L.R.A., 1915-D, 1150; 26 L.R.A. (N.S.), 575.
Messrs. J.D. Wyatt and Blythe Bonham, for respondents, cite: Construction of statutes: 112 S.C. 528; 131 S.C. 144; 143 S.C. 104; 149 S.C. 178; 129 S.C. 481. Exclusive right in receiver to bring action: 36 Stat., 199.
October 17, 1930. The opinion of the Court was delivered by
The facts and issues involved in this case are stated in the order of his Honor, Judge W.H. Townsend, from which order the appeal is taken. Under the authority of the case of Branchville Motor Company et al. v. L.H. Adden et al. 158 S.C. 90, 155 S.E., 277, recently filed, the order of Judge Townsend is sustained, and the judgment affirmed.
MESSRS. JUSTICES COTHRAN, BLEASE and STABLER and MR. ACTING ASSOCIATE JUSTICE MENDEL L. SMITH concur.