dissenting.
I respectfully dissent to the result reached in this case.
I concur in the well reasoned logic of the majority opinion and I concur in the rules of law expressed therein. Tennessee Law does not require every creditor to be treated exactly the same. Paine v. Fox, 172 Tenn. 290, 112 S.W.2d 1 (1938). Such seems allowable so long as: (1) there is no intent to effect a preference; (2) there is a logical and reasonable basis to treat certain creditors differently; and (3) no creditors are prejudiced. If certain creditors receive a windfall from a collateral source, then others cannot complain. The continuation and maintenance of a failed banking facility is a worthwhile and desirable objective. It should not be made impossible by a requirement that all creditors must be paid in full.
Thus, the utilization by FDIC of a so-called “hybrid” Purchase and Assumption Agreement would comply, in my opinion, with Tennessee Law if such were reasonable. Such would require the FDIC to place funds in the hands of the Receiver initially in an amount reasonably sufficient to pay out the anticipated liquidation values. Distribution(s) could take place promptly and interest could be earned on the funds during any delay.
To this extent, I concur in the majority opinion that the Trial Judge was in error in decreeing 100% distributions solely on the basis of insuring that all creditors were treated equally.
However, a Trial Judge’s correct judgment should not be reversed simply because it may have been predicated upon an erroneous reason. Cherokee Insurance Company v. U.S. Fire Insurance Company, 559 S.W.2d 337 (Tenn.App.1977).
The facts of this case, in my opinion, do not support the majority’s conclusion that there has been no preferential treatment, nor prejudice to the unassumed creditors. The P. & A. left no assets in the hands of the Receiver and it decisively preferred FDIC in its corporate capacity. If a fund exists for pro rata distribution, it is based upon the liability of the Receiver and not upon any preservation of assets. Assuming that the claims asserted herein are bona fide and provable, the unassumed creditors have been prejudiced to an incalculable extent. Furthermore, it appears that the FDIC as Receiver has subjected its duties and responsibilities to the interest of FDIC in its corporate capacity.
As to the existence of the source of funds for distribution, the Chancellor found:
FDIC Corporation has told the Court and stated in its brief that, “The FDIC is willing to adhere to Tennessee Law and make payments to all bona fide creditors on a pro rata basis ... If a surcharge is appropriate, the appropriate amount is enough to establish a pro rata distribution to those persons who have been recognized as bona fide creditors of the receivership estate — which the FDIC is willing to voluntarily pay.”
Therefore, the majority gives credence to the “willingness” of the FDIC and con*922strues such as a fund available for distribution. However, the Purchase and Assumption Agreement obviously transferred all assets of United American Bank to the First Tennessee Bank and the FDIC in its corporate capacity. It was only after the intervening petitioners filed their claim that this nebulous fund came into existence. In its initial response to the intervening petition, FDIC contended that “pro rata payment” of unassumed creditors “is a discretionary policy not subject to review in this Court.” Later, upon the invitation of the Chancellor to enter an Order providing for this fund, FDIC refused to approve such unless it encompassed its interpretation of “pro rata.” Before the Trial Court, FDIC — as a fiduciary for the creditors— threatened to rely upon sovereign immunity and pay nothing unless the Chancellor accepted its determination of its responsibilities as Receiver. In the Court of Appeals, FDIC asserted and relied upon the case of FDIC v. Citizens Bank and Trust Company, 592 F.2d 364 (7th Cir.1979). wherein that Court held that the FDIC was immune from creditors’ tort claim that they had wrongfully transferred as Receiver assets of an insolvent bank to itself in its corporate capacity. The FDIC has consistently maintained that it would assert sovereign immunity if the Court did not accept its interpretation of its obligations as a fiduciary. Certainly, the willingness, or intent, of FDIC to pay liquidation values was not such that the creditors could put in the bank or borrow upon it. The liquidation officer for FDIC-R testified that the Receivership had insufficient funds “to even buy an ice cream cone.”
If United American Bank had been liquidated, FDIC would have been responsible to pay large sums to depositors promptly. “... payment of the insured deposit in such bank shall be made by the corporation as soon as possible ...” 12 U.S.C.A. § 1821(f). By the provisions of the Purchase and Assumption Agreement used, First Tennessee Bank assumed all of the depositor liability and certain of the creditors. Thus, any outlay of funds by the FDIC as insuror was postponed until FTB sustained losses “in excess of 86.5 million.” P. & A. Sec. 3.2. Payments to FTB by the corporation in its insuror capacity are to be charged with interest. P. & A. Sec. 3.3. No provision, of course, exists for the payment of interest to the unassumed creditors. Clearly, FDIC-C was preferred in the Purchase and Assumption Agreement.
FDIC strongly argued that the unas-sumed creditors could not possibly be prejudiced as they will ultimately receive the same distribution that they would have received in a straight liquidation plus a pro rata portion of the enhanced value paid by First Tennessee Bank. Clearly, the unas-sumed creditors have been prejudiced by being required to file suit to seek any payment. In straight liquidation, they would have undoubtedly received partial distributions. Here, they are unlikely to receive any payment until the FDIC completely winds up all of the proceedings. The determination of the “value” of the failed bank and the cost of collection are strictly within the control of FDIC in its corporate capacity. It is difficult to ascertain how the Trial Judge could ever ascertain the reasonableness of these amounts.
The majority place great confidence in the Trial Judge’s ability to insure that proper accountings can be obtained and, ultimately, a proper pro rata distribution made. However, until FDIC-C concludes all proceedings to determine what “pro rata” means, FDIC-R has no assets upon which to make any accounting. FDIC-C, who holds all of the assets not transferred to FTB, is not accountable to State Court. 12 U.S.C.A. § 1819; FDIC v. Ashley, 585 F.2d 157 (6th Cir.1978). In fact, the Chancellor has no control over the collection of the assets or the payment of liabilities outside the Receivership. As stated in Ashley,
“... the assignment agreement eliminated the need for constant Court supervision of a Receivership. A Receiver needs Court authority for the disbursement of funds to pay expenses, the negotiations of settlements, the issuance of *923accountings, and the payment, pro rata, of creditors. By virtue of the assignment agreement, the FDIC owned the ‘unacceptable assets’ and could liquidate them without Court supervision.”
Thus, FDIC-C has unbridled discretion to file suit, compromise claims and incur expenses. Yet, these decisions are determinative of what “pro rata” means in this case.
It is clear that the “chain of additional bank failures" referred to in the majority opinion has complicated the job of FDIC. Yet, from the record before this Court, there are inadequate accounting procedures to properly allocate the collection of assets between the numerous failed banks.
The law is abundantly clear that the FDIC is allowed to operate in separate capacities as Receiver and Insurer. 12 USCA § 1811; FDIC v. Ashley, supra; FDIC v. Godshall, 558 F.2d 220 (4th Cir.1977). Such functions are entirely separate and one is accountable to Federal Courts and the other to State Courts. As a Receiver, FDIC is a fiduciary to all of the creditors. In its Corporate, or Insurer, capacity, the obligations are to fulfill the statutory requirements for payment and preserve the insurance fund. We have a distinct conflict of interests and, as Receiver, FDIC has consistently taken the position of its counter-part, FDIC-C, in these proceedings. Their separate identities have so merged as to be indistinguishable. It would appear: (1) that FDIC-C exercises complete dominion over FDIC-R, (2) such control has caused FDIC to violate its legal duties, and (3) the unassumed creditors have been injured. I would hold FDIC-R as the alter ego of FDIC-C. See Electric Power Board of Chattanooga v. St. Joseph Valley Structural Steel Corp., 691 S.W.2d 522 (Tenn.1985).
Under the facts of this case, I would concur in the Chancellor’s determination that it is “impossible to unscramble the eggs.” I would affirm the determinations made by the Trial Court and the Court of Appeals.
ORDER
DROWOTA, Justice.Pursuant to Rule 39 of the Tennessee Rules of Appellate Procedure, C. Ralph Fontaine, et al., MBank Dallas, N.A., and Thomas E. DuVoisin, Liquidating Trustee of Southern Industrial Banking Corporation, have filed Petitions to Rehear. After consideration of same, the Court is of the opinion that the Petitions should be and the same hereby are overruled at the cost of Petitioners. The members of the Court adhered to the positions stated in the original opinion filed in this cause on September 8, 1987.
HARBISON, C.J., and FONES and BROCK, JJ., concur.
R. VANN OWENS, Special Justice, dissents.