In Re Farmers and Merchants Bank of Imperial

PRESTON, J.

Treating the petition herein as one in mandate, the action of the court below in denying it seems clearly correct and its order is hereby affirmed.

We may do this without a discussion of the contention that the petition is but an effort to> modify a previous appealable order that had become final; hence the present order denying the petition was not appealable.' We may also dispose of the cause without a discussion as to whether the so-called bankruptcy rule or the so-called chancery rule obtains in this state in bank liquidation proceedings where

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dividends upon the claims of general and partially secured creditors of the bank are involved.

The underlying facts of the present controversy are as follows: On October 10, 1927, respondent Will C. Wood, then superintendent of banks for the state of California, closed the doors of Farmers and Merchants Bank of Imperial and took possession of its propetry and business under the provisions of section 136 of the Bank Act of the state of California. (Deering’s Gen. Laws 1923, Act 652.) Said respondent at all times herein has been and now is proceeding to liquidate the affairs of said bank and is administering them for the benefit of depositors and creditors thereof.

Petitioner and appellant, Imperial Irrigation District, on the above-mentioned date, had on commercial deposit in said bank approximately $54,547.62 and its claim for that sum was regularly approved as a legitimate claim against said bank. Appellant, however, before making said deposit, had exacted from said bank, as security therefor, United States Liberty bonds of the par value of $50,000. After this controversy arose it appears that appellant collected said bonds and received on account thereof the sum of $51,062.50, which it' still retains. When appellant’s claim for the above amount of said deposit was approved, it was with notice that respondent denied the validity of said pledge of securities, with a demand for the surrender of the bonds or proceeds thereof to him. Appellant refused this demand whereupon respondent instituted in the Superior Court of Imperial County an action to recover said assets from appellant, which action is still pending and undetermined. On April 28, 1928, respondent petitioned the superior court of said county for authority to pay a fifteen per cent dividend to depositors of said bank and with respect to the claims of this appellant he alleged the following: “That a claim was filed against the commercial department of said bank by Imperial Irrigation District, a corporation, for $54,547.62; that said claim has been allowed, but claimant is claiming certain security therefor, and an action to determine the rights of the parties is now pending; that your petitioner does not desire to pay any dividend upon said claim until after said action is determined. ’ ’