Court Opinion

ID: 6515370
Source: CourtListenerOpinion
Date Created: 2022-07-19 18:26:07.085396+00
Date Added: 2024-06-11T15:55:00.272406
License: Public Domain

McCLELLAN, J.
These cases involve substantially the same questions and were submitted together. The bill in each of them seeks to have a trust declared in favor of the complainants upon the assets of the suspended First Na-. tional Bank of Sheffield which are now in the hands of and being administered by the respondent, as receiver of said bank by the appointment of the comptroller <of the treasury. *321Tlie facts in the Brewing Company’s case are or may be conceded to be the following: During the month of November, 1889, said bank in various ways represented itself for the purpose of inducing collections and deposits to be solvent, in a perfectly sound condition and to be doing a good, and safe; and paying business. These representations were made to the complainant, for the purpose stated, by its president and cashier, and were acted on by complainant by way of depositing in said bank the money which is now sought to be recovered. The representations were wholly false, and known to be so by the president and cashier when they were made. The bank was utterly insolvent and these officers knew it. It was in a failing condition at the time to the knowledge of these officers, and actually failed on the 29th day of the month. With full knowledge of this state of affairs the bank officers named, and who were managing the concern; induced the complainant to make the deposit and they received the deposit and converted the money to the uses of the bank. These are also the facts of the case on this point of Hancock Bros. & Co., except that the bank made a collection for them and converted the money to its own use sending complainants a worthless check for the amount. We will concede that so far as the right of the complainants to fasten a preference lien in the nature of a trust on the assets of the bank depends upon the fraud of the bank and its officials their cases are made out on the facts we have stated. And if they had further shown that the identical money which was deposited by and collected for them respectively had come to the hands of the receiver and was held by him in specie at the time of bills filed, or that their funds had been mingled with the funds of the bank which came to the receiver’s hands and constituted in part the gross sum held by him, or that their identical money had been invested by the bank in tangible property which came to the hands of the receiver and was held by him, they would have been entitled to the relief they seek. But just here is where the cases fail. It is not shown that the receiver has or- ever had their funds, either segregated from or as constituting in part the money of the bank in his hands, and it is not shown that any property in which their funds were invested is now held by the receiver or ever came into his hands. To the contrary it is made to appear very clearly that the money deposited by the Brewing Company and collected for Hancock Bros. & Co., respectively, having been mingled with the funds of the bank, was paid out by the bank to depositors or other creditors before its *322suspension. No part of this money came to the hands of the receiver in any form, and no tangible property of the bank which had been acquired or paid for by it after the funds of complainant were received—no property into which this money could possibly have gone—is now or ever has been in the possession of the respondent. Indeed only about one hundred and ten dollars in money was turned over to the receiver at all—an amount about equal to the claim of Hancock Bros. & Co., and about one-seventh of the claim of the Brewing Company, and this insignificant sum is in no wise identified as the money collected for the former or as a part of the money deposited by the latter. There is, in short, an utter failure to identify complainants’ money in the hands of the receiver or to trace the money into property of the bank which came to his possession. On these facts no trust can be declared upon any money or property of the bank in the hands of the receiver in favor of the complainants and they are not entitled to any preference over other creditors of the bank in the payment of their demands. This conclusion is so well grounded upon principle and supported by texts and adjudged cases that we need do no more than cite some of the authorities which are collated in appellees’ brief.—2 Story Eq. Jur., §§ 1258-9; 2 Pom. Eq. Jur., §§ 1051, 1058; 2 Morse on B’ks & B’k’g, §§ 590-6; Waite on Insol. Cor., § 659; National Bank v. Dowd, 35 Fed. Rep. 340; Receiver v. Beauregard et al., 1 Woods, 125; Peters v. Bain, 133 U. S. 670; Phila. Nat. Bank v. Dowd, 38 Fed. Rep. 172; Illinois Trust & Savings Bank v. First National Bank of Buffalo, 15 Fed. Rep. 858; s. c. 21 Blatch. 275; Maury v. Mason, 8 Port. 211; Goldsmith v. Stetson, 30 Ala. 164; Parker v. Jones, 67 Ala. 234; McCall v. Rodgers, 77 Ala. 349.
This conclusion has not been reached and is not rested upon any idea that the rights of the complainants in respect of effectuating their equitable titles to the funds in controversy against the receiver are any other than they would have been against the bank itself on the facts we have stated or conceded to be true had the failure of the bank not been followed by the appointment of a receiver. Though the suspended bank had continued in the possession of its assets, these complainants could no more have recovered their funds by the invocation of equity to the declaration- and effectuation of their equitable titles than they could have sued in detinue had their titles been good at law; and for the same reason: in neither case could it be maintained that the defendant bank had their property in its possession.
The rulings on demurrers to the bills in these cases were *323without injury to the complainants, and neither those rulings nor other questions need be reviewed. The cases of the respective complainants were fully developed in the evidence. They were entitled to no relief upon the facts proved. The bills were properly dismissed, and the decrees of the chancellor are
Affirmed.