Opinion
No. 32466.
January 11, 1937.
1. APPEAL AND ERROR.
Decree approving items paid by bank liquidator as preferred claims would be reversed where statement of facts stipulated that no proceedings had been had to determine whether claims were preferred, notwithstanding recital in decree that court took judicial notice of all things that had transpired "in this case" after appointment of liquidator and subsequent to qualification of successor, since appellee was bound by statement of facts in regard to case at bar, which was beginning of litigation between parties, and since court could not look to other litigation in which kindred question was involved to determine if claims were preferred.
2. EVIDENCE.
In suit to determine whether claims against insolvent bank were properly paid as preferred claims, court could not look to other litigation in which parties had no interest, as claims for preference were independent and each claim was required to stand or fall on evidence relevant to it.
APPEAL from the chancery court of Sunflower county. HON. J.L. WILLIAMS, Chancellor.
Moody Johnson and Jefferson Davis, all of Indianola, for appellant.
The draft given by the Bank of Indianola to the Merchants Bank and Trust Company was for items the Bank of Indianola had cleared or collected for the Merchants Bank and Trust Company. The draft was not paid because of the insolvency of the Bank of Indianola. This court has held time and time again that such a claim is not a preferred claim and that the payee named in the draft is merely a common creditor of the bank.
Billingsley v. Pollock, 69 Miss. 759, 130 So. 821, 30 A.S.R. 585; Alexander County National Bank v. Conner, 70 So. 827, 110 Miss. 653; Love v. Federal Land Bank, 127 So. 723, 157 Miss. 52; Love v. Fulton Iron Works, 162 Miss. 890, 140 So. 529.
The claim of the Merchants Bank and Trust Company against the Bank of Indianola was not a preference claim. Appellee may contend, as he did in the lower court, that both banks were being liquidated in the chancery court of Sunflower county, Mississippi, and for this reason he considered the claim as a preferred claim. We say that such is unsound and that such a relationship does not make the claim a preference claim. It would be just as reasonable to say that the claim held by an administrator of a decedent's estate for his deposits in an insolvent bank was a preferred claim against such insolvent bank because both estates were being administered in the same court.
The claim of the Merchants Bank and Trust Company, in liquidation, not being a preference claim, the liquidator of the Bank of Indianola, in liquidation, had no right to pay the same.
Christensen v. Merchants and Marine Bank of Pascagoula, 150 So. 373, 168 Miss. 43; 3 R.C.L. 642, sec. 272; 7 C.J., page 751, sec. 547, and page 747, sec. 541.
The agreed statement of facts is in lieu of evidence offered on the trial below. In other words the facts disclosed by the evidence is incorporated in the statement of facts.
The recital in the decree is to the effect that the lower court took "judicial knowledge of all things that have transpired in this cause since the appointment of C.C. Moore and subsequent to the qualifications of his successor." This recital, of course, is limited to the proceedings had in the case at bar and cannot be extended to anything that transpired aliunde the proceedings. When so considered the recital is merely one of law, not fact, for a court always takes judicial knowledge of the proceedings had in the case before it.
The issue presented to the trial court was whether the claim, on which the payments were made, was a preference claim. This is an issue of fact and law, as to which evidence must be introduced to prove the essential facts of that issue. As to whether the claim is a preference claim depends upon its nature and the facts with reference to the same could not properly be matters of judicial knowledge.
If the facts, of which the lower court is supposed to have taken judicial knowledge, were pointed out to this court it might be possible to determine the source from which the lower court acquired its judicial knowledge. The trouble is, we do not know, nor does this court know, what facts the lower court is supposed to have taken judicial knowledge. Hence it is impossible for us, as it is for this court, to refer to the source of such supposed facts.
The burden of proof, as to the issue presented in the lower court, is no doubt on the appellant. But that burden was met by evidence introduced on the trial below as is disclosed by the agreed statement of facts, which is in lieu of that evidence.
Neill Townsend, of Indianola, for appellee.
We respectfully submit that the law relied upon by appellant for the reversal of this cause is not applicable to the facts in this case. The court below finally heard and determined the matter, and found that during all of the time appellee was engaged in the liquidation of the Bank of Indianola handling thousands of dollars of money and being charged with the receipt and disbursement of same, all was handled in good faith and according to law.
Frankly, we think the rule to be, in matters such as that of accounting by an executor or an administrator, in rendering an account the burden of proof is on the one claiming credit for the disbursement, that is to say, in the court below.
We submit, however, that in matters such as accounting by an executor or an administrator or a receivership where exceptions are taken the rule is different and the burden of proof is on the contestant. Likewise, where one desires to surcharge or falsify the account of an executor, administrator or a receiver the burden of proof is on the contestant. This matter was heard in the court below on the petition of appellant wherein appellant correctly assumed the burden of trying to show the trial court that appellee had not faithfully accounted for certain specific items, and sought to have appellee surcharged with same, and appellee appeared in answer to same.
Where exceptions to an account are of an affirmative nature, the burden of sustaining such exceptions rests upon the contestant.
24 C.J., pages 1018, 1043.
The order or decree of which a review is sought is as a general rule presumed to be right, in the absence of any affirmative showing in the record to the contrary, and every reasonable presumption will be indulged in favor of the correctness of the proceedings below. Accordingly the burden rests on appellant to show that the ruling complained of was incorrect.
24 C.J. 1050; Gray v. Harris, 43 Miss. 421; Scott v. Porter, 44 Miss. 364; Harper v. Archer, 9 S. M. 71.
The appellant elected, after the rendition of the decree about which he now complains, to enter into an agreed statement of facts to be submitted to this court, wherein he agreed, in effect, to eliminate therefrom things which the trial court properly had before it, and of which it could and did take judicial knowledge. This court can certainly take judicial knowledge of that which the trial court had before it, in this same cause, and did take judicial knowledge of, and too, since appellant has elected to enter into an agreed statement of facts not embracing that which the trial court had a right to and did look at and consider.
Love v. Hytken, 150 So. 777.
Finding of chancellor on facts on conflicting evidence is binding on Supreme Court.
Langston v. Farmer, 170 So. 233; McCandless v. Clark, 159 So. 542.
We realize that a court will not, in a case before it, judicially notice the facts in the record of another and different case, and that a court cannot take judicial notice of what may appear from its own record in another and distinct case, unless made part of the case under consideration; however, we submit that the trial court properly took judicial knowledge of all proceedings had and done in this cause in the court below since the appointment of appellee as such liquidating agent, and subsequent to the qualification of his successor, appellant here, regardless of whether or not appellant saw fit to make all of such a part of the record here.
The court takes judicial notice of its own records and of its proceedings in actions formerly pending before it.
Custer v. Kroeger, 280 S.W. 1035, 44 A.L.R. 1328.
On December 15, 1931, the Bank of Indianola closed its doors for liquidation. Its affairs were taken over regularly by C.C. Moore, liquidating agent, who served in such capacity until June 30, 1934, when the Bank of Indianola Liquidating Corporation, appellant here, was created by a decree of the chancery court under the authority of chapter 146, Laws 1934, sections 97 to 106, inclusive, and in such decree it was ordered that appellant take over and receive the assets of the Bank of Indianola.
Subsequent to the failure of the Indianola Bank, C.C. Moore became the duly qualified liquidator of the Merchants Bank Trust Company of Indianola, Miss. After the organization of the Bank of Indianola Liquidating Corporation, a petition was filed by it against Moore as liquidating agent of the Bank of Indianola, in which it was prayed that he be required to file his final account and turn over, in pursuance of former decrees, all the assets of his predecessor bank.
Moore answered the petition and filed his account, in which it was charged that the Indianola Bank owed two items amounting to one thousand five hundred dollars, which he paid out of the funds of the Indianola Bank into the funds of the Merchants Bank Trust Company while he was liquidator of both banks. These amounts he alleged were preference claims, and were paid as such on the authority of J.S. Love, superintendent of banks, in order to clear the real estate of the Merchants Bank Trust Company of the taxes due thereon.
The appellant excepted to the final account, and especially as to the items amounting to one thousand five hundred dollars, averring that this money still belonged to the Bank of Indianola, and, therefore, to it as the successor thereof.
The court heard the evidence and rendered a decree in which the exceptions were disallowed, the final account approved, and Moore, liquidator of the Bank of Indianola, was finally discharged. The parties to this cause filed, instead of the stenographer's notes, an agreed statement of facts in which there is no evidence tending, in the slightest degree, to establish the items amounting to one thousand five hundred dollars as a preferred claim or as a trust fund in the hands of the Bank of Indianola. The agreed statement of facts simply shows that the status of debtor and creditor was created by the transaction through and by which the items amounting to one thousand five hundred dollars were paid out by the liquidator. So far as the agreed statement of facts is concerned, there is nothing upon which to base the decree of the court below — indeed, counsel for the appellee does not urge upon us anything therein contained. Appellee relies on the following statement found in the final decree of the court: "and the court having and taking judicial knowledge of all things that have transpired in this cause since the appointment of C.C. Moore and subsequent to the qualification of his successor," etc.
The agreed statement of facts contains this statement with reference to the items amounting to one thousand five hundred dollars: "This said claim was carried on the books of the Bank of Indianola under `Drafts Outstanding' along with other drafts outstanding amounting to $30,320.00 and no petition was ever filed in the Chancery Court of Sunflower County, Mississippi, or anywhere else asking that this claim be declared a preferred claim against the Bank of Indianola." (Italics ours.)
In the agreed statement of facts, there is nothing indicating anything by which the court here could understand the nature of the records of which judicial knowledge was taken in order to overturn the case made out by the appellant. The only thing that is relied on here for the affirmance of this cause is the recital in the decree, quoted supra. Therefore, we do not know to what the court referred in said quotation, or what record was examined, or how the question arose.
Conceding, for the sake of the argument, that it be unnecessary here to decide that the burden of proof was upon the exceptor to the final account, the appellant here, it fully met that burden according to the agreed statement of facts. Further, in said statement it is distinctly agreed that no sort of court proceedings had ever been had to test the question of whether the claim involved here was a preferred claim or not. In so far as this case is concerned, the appellee is bound by his agreement to that effect, and the court could not look to other litigation as to other preferred claims to determine this issue here presented. We presume that the statement "all things that have transpired in this cause," refers to the entire liquidation proceedings.
Insofar as the claim of the appellant here against Moore, the liquidator, is concerned, we are, by the agreement, convinced that there had been no previous litigation by which the court could have determined that the claim here involved was a preferred claim. The exception to the final account, so far as this claim is concerned, is the beginning of this litigation between these parties, and the court could not have looked, in order to take judicial knowledge thereof, to some other case in which the same or kindred question might have been involved. In the case of Illinois Central R. Co. v. Walker, 116 Miss. 431, 77 So. 191, this court has held that although it had been shown in other cases before this court that the Yazoo Mississippi Valley Railroad Company was owned and operated by the Illinois Central Railroad Company, in the pending case the court could not take judicial knowledge of those prior records to ascertain that alleged fact. We are, therefore, of the opinion that there was nothing to which the court could properly look in order to take judicial knowledge of facts applicable to the case at bar. The court could not interweave this litigation with some other in which the party had no interest, so McCandless v. Clark, 172 Miss. 315, 159 So. 542, cannot be applied or invoked here. Such claims for preference are independent of each other, and the claim stands or falls on the evidence relevant to it.
The decree of the court below will be reversed, and the judgment here will be that the exceptions should have been sustained as to the one thousand dollars and five hundred dollars, totaling one thousand five hundred dollars, and that the liquidating agent, the appellee, should have been charged with these amounts; and it is so ordered here. And until these amounts are paid to the appellant, the decree, of course, is erroneous in that it discharged Moore, the liquidating agent.
Reversed and remanded.