Ronna v. American State Bank

The American State Bank operated as a banking institution at Walnut, Iowa, until it became insolvent and the State Superintendent of Banking took charge thereof on May 23, 1922. While the American State Bank was a going concern, George Bohnk, on February 20, 1922, borrowed from it the sum of $3,061.83. To evidence this indebtedness, George Bohnk executed his promissory note payable to the American State Bank, and secured the same by giving a chattel mortgage and assigning a $10,000 life insurance policy. Before the debt was paid, George Bohnk died on September 24, 1922. He was unmarried and left no children. His mother also was dead. Consequently his only heir at law was his father, Hans F. Bohnk.

Following the death of George Bohnk, Otto Ronna was appointed the administrator of his estate. The loan above named came due and the American State Bank sold the property covered by the chattel mortgage and applied the same on the indebtedness. These proceeds, however, did not satisfy the debt, and a balance remained which was paid from the money collected on the $10,000 life insurance policy. After subtracting the necessary moneys to pay the obligation to the American State Bank, there remained of the life insurance proceeds $8,927.08.

While the affairs of the American State Bank were being administered under the receivership proceedings aforesaid, a new bank was organized, known as the Walnut State Bank. Under written agreement with the receiver of the American State Bank, the new bank assumed the deposits of the American State Bank shown upon the books thereof to the extent of forty-five per cent. This forty-five per cent thus assumed under the agreement was to be paid to the respective depositors of the American State Bank upon their execution of a waiver relinquishing their right to the remaining fifty-five per cent of their deposits.

On September 18, 1926, Otto Ronna, as administrator of the George Bohnk estate, commenced an action against the American State Bank and the Walnut State Bank to recover: First, $170.00 being the balance due on a checking account; second, the $10,000 proceeds of the life insurance policy; and, third, $2,015.14, alleged to be the proceeds of the personal property sold by the bank. That suit ignored the contract above named under which the Walnut State Bank assumed forty-five per cent of the debts owed by the American State Bank.

The district court in said cause allowed the administrator $13,033.70. An appeal was thereupon taken to this court by the American State Bank, of Walnut, and the Walnut State Bank. See Ronna v. American State Bank, 213 Iowa 855. Upon that appeal this court reversed the judgment of the district court. A petition for rehearing was then filed by the administrator, which was overruled by this court. Also a motion for judgment was filed by the administrator, and this court overruled the same. Then the cause was remanded by procedendo to the district court, with directions to that tribunal to take "further proceedings" * * * "not inconsistent with the opinion of the Supreme Court." When the cause reached the district court, however, the administrator together with Hans F. Bohnk filed a motion in the district court for a judgment on the record. This motion was resisted by the American State Bank and the Walnut State Bank on the theory that the trial court had jurisdiction to do nothing except dismiss the administrator's petition filed in Ronna v. American State Bank (213 Iowa 855), supra.

On the hearing under the motion, the administrator and Hans F. Bohnk introduced the entire record in the original case which was appealed, and the banks offered in evidence the administrator's motion for judgment in the Supreme Court, the motion to strike the same, filed by both banks, and the ruling of the Supreme Court thereon. The district court sustained the administrator's motion and entered judgment against the American State Bank and the Walnut State Bank for $6,540.16, made up as follows:

1. The checking account of the administrator ...... $ 170.86 2. Interest thereon from September 18, 1926, to date of judgment ............................. 62.56 3. Forty-five per cent of George Bohnk's insurance 4,017.19 4. Interest thereon at five per cent for three years 602.57 5. Additional interest ............................ 1,686.98.

Following this action of the district court, the American State Bank and the Walnut State Bank applied to this court for an order requiring the trial court to dismiss the administrator's petition in the original case of Ronna v. American State Bank (213 Iowa 855), supra, in accordance with the reversal thereof and the remand of the cause under procedendo. A stay order was issued by a judge of this court to maintain the status quo until the application for the new mandate is passed upon by this court.

It is argued by the administrator and Hans F. Bohnk that this court has no jurisdiction to issue the mandatory order required by the two banks, because a judgment has been entered in the district court. This judgment was thus entered, the administrator and Hans F. Bohnk argue, under a discretion which the trial court had to proceed with the case after the reversal and remand of the original cause. Consequently the administrator and Hans F. Bohnk conclude that the only remedy available to the banks under the circumstances is an appeal from the second judgment.

I. For convenience in discussion, consideration will first be given to the question involved as it relates to the administrator alone.

[1] Undoubtedly the two banks could have appealed from the judgment entered after reversal and remand had they so desired. See Code Section 12823, 1931 Code. But because of that, it does not necessarily follow that the banks could not, in lieu of appealing, successfully apply for a mandatory order of this court requiring the district court to comply with the procedendo of this court. As to whether or not the banks can thus apply, depends upon the facts and circumstances involved in the case. If the procedendo issued in Ronna v. American State Bank (213 Iowa 855), supra, under the circumstances gave the trial court discretion not to dismiss the administrator's petition, but to proceed farther in the original case, then the banks would not be entitled to the mandatory order. On the other hand, if the procedendo allowed the district court no discretion to proceed farther with the original case, but required it to dismiss the administrator's petition therein filed, then the banks are entitled to the mandatory order which they now seek.

[2] A procedendo ordered by the court according to the particular case may direct the district court to do only a special thing after remand, or such mandate may, in harmony with the case, permit the trial court to exercise discretion, within proper limitations, to proceed further with the cause after remand. Section 12871 of the 1931 Code provides:

"* * * The court may reverse, modify, or affirm the judgment, decree, or order appealed from, or render such as the inferior court should have done. No cause is decided until the written decision is filed with the clerk."

When the opinion of this court indicates that the cause is reversed and remanded for a special purpose, the district court, upon the remand, is limited to do the special thing authorized by this court in its opinion, and nothing else. Such special purpose may be indicated in the opinion of this court or in the procedendo ordered by the court. Whitmer v. Board of Independent School District of White Pigeon, 210 Iowa 239; Pauly v. Montgomery, 209 Iowa 699; Pace v. Mason, 206 Iowa 794; Miller v. Perkins, 204 Iowa 782; City of Charles City v. Ramsay, 199 Iowa 722; Manchester v. Loomis, 197 Iowa 1049; Haggerty v. Brower, 105 Iowa 395; Board of Supervisors of Pottawattamie County v. Board of Supervisors of Harrison County, 214 Iowa 655.

Again this court may reverse an equity cause without specifically directing the trial court, either in the opinion or in the procedendo, what to do upon remand. In such case, after the procedendo has been issued remanding the cause, the district court may, within proper limitations, proceed as it can in an equity suit between the submission of the record and the entry of the decree. However, in such event, a case cannot be tried by piecemeal, and the district court must act in harmony with the opinion of the Supreme Court. Even in the special event contemplated, a further or supplemental trial is all that is generally allowed (Allen v. City of Davenport, 115 Iowa 20), and a retrial is permissible, if at all, only in rare instances. Sexton v. Henderson, 47 Iowa 131; Austin v. Wilson, 57 Iowa 586. The district court, when proceeding with the further or supplemental trial, may, under proper circumstances, allow the amendment of pleadings and the introduction of specific testimony. Adams County v. B. M. Ry. Co., 44 Iowa 335; Sanxey v. Iowa City Glass Co., 68 Iowa 542; Hogle v. Smith, 136 Iowa 32; Sleeper v. Killion, 182 Iowa 245; Dierksen v. Pahl, 194 Iowa 713; Kossuth County State Bank v. Richardson, 141 Iowa 738. When thus allowing an amendment to the pleadings or the introduction of additional evidence, the district court exercises a legal, as distinguished from an absolute or arbitrary, discretion.

For the purpose of aiding the understanding at this juncture, the following excerpt is quoted from Sanxey v. Iowa City Glass Co. (68 Iowa 542), supra, reading on page 547:

"It has been held * * * in actions of (the kind in question), * * * when the cause is remanded for judgment in the lower court, that the parties may be permitted to introduce material evidence which has been discovered since the original trial; also that they may set up matters materially affecting the merits of the cause which have occurred since the former trial; and that the amendment to the pleadings necessary for this purpose may also be made."

Where, however, after a remand by procedendo, as in the case at bar, the district court, under its discretion aforesaid, has neither allowed an amendment to the pleadings nor the introduction of testimony that differs substantially from that before the Supreme Court on the appeal, there is nothing for the trial court to do but to enter judgment in accordance with the opinion of this court. Under the opinion of this court in Ronna v. American State Bank (213 Iowa 855), supra, the trial court, after the remand by procedendo, should have dismissed the administrator's petition at his costs. On the appeal of that case, this court tried the causede novo "upon the very merits of the case." Consequently, our decision upon the merits "was final, and there remained nothing for the court below to do, except to enforce, by proper decree, the decision of this court. * * * The trial of a chancery case in this court, which was heard in the court below upon written evidence, being de novo, is final and another trial cannot be again had in the court below unless for some special reason it is so ordered." Sexton v. Henderson, 47 Iowa 131; Adams County v. B. M. Ry. Co., 55 Iowa 94; Austin v. Wilson, 57 Iowa 586; Lombard v. Gregory, 88 Iowa 431; Allen v. City of Davenport, 115 Iowa 20; City Council of Marion v. National Loan Investment Co.,130 Iowa 511; Kossuth Co. St. Bank v. Richardson (141 Iowa 738), supra; Grove National Fire Insurance Co. v. American Bonding Casualty Co., 200 Iowa, 847; McNiel v. District Court, 174 Iowa 417 (local citation 420).

Each allegation of the petition forming the basis for the district court's judgment after remand was before this court on the appeal. As said in the opinion, the administrator was not entitled to recover because the beneficiary of the estate, Hans F. Bohnk, who, under the record, was entitled to the funds, had waived his right against the American State Bank above named to fifty-five per cent of all the deposits and sums due, and he accepted the obligation of the Walnut State Bank for the remaining forty-five per cent thereof. But, before this forty-five per cent can be collected from the Walnut State Bank, as indicated in the original opinion in Ronna v. American State Bank (213 Iowa 855), supra, it is necessary for the owner to sign the written waiver contemplated by the contract between the superintendent of banking and said bank. Assuming, without deciding, that upon some theory it may be said that the beneficiary of the estate can be held to have, in effect, signed a waiver of fifty-five per cent of part of the money involved, deposited in the old bank, yet, although the beneficiary did, by letters and action, waive the entire fifty-five per cent of his and the estate's funds deposited in the original bank, under no circumstances, however, can it be said that such beneficiary, or the administrator, executed a written waiver, as contemplated by the contract with the superintendent of banking, for all the money, of the beneficiary and the estate, involved, which was thus deposited in said bank. Moreover, the original petition proceeded upon the theory that the administrator could recover from the banks because they converted the property belonging to the estate. Under the original petition, there was no cause of action predicated on the certificates of deposit issued, or to be issued, by the banks for the said forty-five per cent. These certificates of deposit for the forty-five per cent, so far as prepared, are still held by the banks. Demand for them has not been made upon the banks by the administrator or the beneficiary of the estate. Consequently, in the very nature of things, these certificates of deposit could not have been the basis for recovery in the original petition. This original petition was the only pleading before the district court when judgement was entered in the case at bar.

In Ronna v. American State Bank (213 Iowa 855), supra, this court held that the administrator, or the beneficiaries of the estate, might receive such certificates of deposit from the banks for forty-five per cent when the waiver above named was executed and the original certificate for one hundred per cent returned. Obviously, then, the administrator, contrary to the opinion in Ronna v. American State Bank (213 Iowa 855), supra, was not entitled to judgment in the district court after the remand. No certificate of deposit for the forty-five per cent had been delivered by the banks to the administrator or the beneficiary of the estate. There was no pleading authorizing the administrator to recover on the undelivered certificates of deposit. Nor was there evidence in the record proving the delivery of such certificates for the forty-five per cent. The pleadings and evidence were substantially the same after the remand as they were before. That being the situation, the district court, after the remand, had no power or jurisdiction to do anything except enter judgment in accordance with the opinion, which required that the administrator's petition be dismissed at his costs. Hence the district court had no right to enter the judgment it did on the administrator's motion. Rather than so doing, the district court should have dismissed the administrator's petition, as before said, on the motion of the two banks. While this court, in Ronna v. American State Bank (213 Iowa 855), supra, indicated in a closing paragraph that the decision was "without prejudice to the rights of Hans, or his assignees, to payment of the [certificates for forty-five per cent]," yet judgment was not entered therefor. Nor was the district court directed or authorized to enter judgment on such certificates under the petition involved in that litigation. Not only is the administrator or the beneficiary of the estate entitled to collect on the certificates of deposit named in said opinion, but likewise they are entitled to collect forty-five per cent of all the deposits belonging to them, whether now represented by certificates or not.

According to Lombard v. Gregory (88 Iowa 431), supra, reading on page 432:

"The district court (under the circumstances) had no jurisdiction to determine the correctness of the decision of this court. It could do no more than enter a decree in accord with the opinion of this court."

Under the condition of the pleadings and the evidence, the district court, after the remand, had no discretion. There being no discretion in the district court under the circumstances, the Supreme Court can order that tribunal to comply with its mandates. Section 4, Article V, of the state Constitution declares:

"The Supreme Court shall have appellate jurisdiction only in cases in chancery, and shall constitute a Court for the correction of errors at law, under such restrictions as the General Assembly may, by law, prescribe; and shall have power to issue all writs and process necessary to secure justice to parties, and exercise a supervisory control over all inferior Judicial tribunals throughout the State."

Also, Section 12879 of the 1931 Code provides:

"The Supreme Court may enforce its mandates upon inferior courts * * *"

See 38 Corpus Juris 642, Sec. 155; State ex rel. Bradbury v. Thompson, 95 N.W. 47 (Neb.); Gaines v. Caldwell, 148 U.S. 228,13 Sup. Ct. Rep. 611, 37 Law. Ed. 432; In re Sanford Fork Tool Co., 160 U.S. 247, 16 Sup. Ct. Rep. 291; State ex rel. Horton v. Dickinson, 89 N.W. 431 (Neb.); Brictson Mfg. Co. v. Munger, 20 F.2d 793. In State v. Banning, 205 Iowa 826, on page 828, this court said:

"The trial court has no discretion but to observe [the Supreme Court's] * * * command."

To the same effect see Jones v. City of Sioux City, 192 Iowa 99 (local citation 102). Such command of the Supreme Court must be at least substantially complied with by the district court. McClain v. Roberts, 198 Iowa 959 (local citation 961, 963). The power of this court in the premises is somewhat analogous to our power in proceedings involving certiorari, prohibition, habeas corpus, and other like applications for writs.

So, under the circumstances of this record, the district court had no power or jurisdiction to enter judgment against the banks. Therefore, so far as the administrator is concerned, the district court is hereby commanded to set aside the unallowable judgment against the banks. According to the opinion in Ronna v. American State Bank (213 Iowa 855), supra, an action for the forty-five per cent above named is abated until the written waiver is signed and said original certificates surrendered, as required by the contract between the two banks which was approved by the state superintendent of banking. Consequently the dismissal of the petition in the original case will not bar a proper action by the party in interest, after the waiver is signed, to collect the forty-five per cent and any interest that may be due thereon.

[3] II. There remains for consideration, then, the question whether Hans F. Bohnk stands in a different position than does the administrator. Bohnk, it is to be recalled, joined with the administrator in the motion for judgment against the banks after the remand of the cause following the appeal. When so doing, Hans F. Bohnk did not have himself substituted as a party plaintiff. Neither did he intervene by petition. Furthermore, Hans F. Bohnk set forth no pleading and introduced no evidence indicating an issue different from the one presented to the Supreme Court on the appeal in Ronna v. American State Bank (213 Iowa 855), supra.

Under the circumstances, Hans F. Bohnk, as well as the administrator, is bound by the opinion and decision of this court in Ronna v. American State Bank (213 Iowa 855), supra. According to the previous opinion just named, neither Hans F. Bohnk nor the administrator can recover the forty-five per cent due until the proper one of them signs the waiver required by the contract before named.

So, under all the circumstances, Hans F. Bohnk is in no different position than the administrator. The district court, then, had no right to enter judgment against the banks in favor of Hans F. Bohnk. In fact, it had no power or jurisdiction so to do under this record. Not having the power and jurisdiction to enter the judgment, the court is hereby ordered and directed to set the same aside, in harmony with the foregoing opinion.

Wherefore, the mandatory order asked by the banks is hereby granted, and the district court ordered to set aside the judgment entered against them after the remand.

All the Justices concur except EVANS and UTTERBACK, JJ.

EVANS and UTTERBACK, JJ., dissent.