Merrill v. First Nat. Bank

• Decision Date: 15 June 1896
• Docket Number: 486.
• Citation: 75 F. 148
• Parties: MERRILL v. FIRST NAT. BANK OF JACKSONVILLE.
• Court: U.S. Court of Appeals — Fifth Circuit

75 F. 148

MERRILL v. FIRST NAT. BANK OF JACKSONVILLE.

No. 486.

United States Court of Appeals, Fifth Circuit.

June 15, 1896

This was a bill filed by the National Bank of Jacksonville against T. B. Merrill, as receiver of the First National Bank of Palatka, and shows, among other things, that the appellee was a creditor of the First National Bank for one class of indebtedness, consisting of sundry drafts, amounting to $6,010.47, and for another class of indebtedness, consisting of certificates of deposit, loans, and interest, amounting to $10,093.34,-- making a total of $16,103.81 due the appellee from the First National Bank of Palatka on the 17th day of July, 1891; that the appellee held certain collateral to secure the last-mentioned indebtedness, amounting to $10,896.22, according to the face thereof; that the appellee collected a portion of the collateral after insolvency of the bank, leaving a balance due on its said indebtedness, so secured by collateral, of $4,496.44; that the receiver and comptroller allowed the appellee dividends on this balance and dividends on the unsecured indebtedness, but refused to allow dividends on the total indebtedness from the date of insolvency; and that there has been great delay by said receiver in winding up the matters of said First National Bank of Palatka, and that the receiver has made no distribution of assets of said bank since the 17th day of May, 1893. The prayer of the bill is: 'That the defendant may discover the amount of assets of said First National Bank of Palatka that came into his hands, and account for the same, and that the defendant may be decreed to pay to your orator (and to all other creditors of said First National Bank of Palatka, in like situation, who may come in and make themselves parties to this suit, and contribute to the expenses thereof) a pro rata distribution upon the entire amount of indebtedness due to your orator from the said First National Bank of Palatka, to wit, upon the sum of sixteen thousand one hundred and three and 81/100 dollars, together with interest thereon from the 17th day of July, A.D. 1891, without deduction therefrom the amount realized from collateral given to secure a portion of said amount due your orator from said bank as aforesaid; that the defendant may wind up the affairs of said bank and of his said receivership thereof without further delay; and that your orator may have such other and further relief in the premises as to your honor may seem meet, and the necessities of this case may require, and as shall be agreeable to equity.'

The receiver demurred to the bill on the following grounds 'First. That the said bill does not contain any matter of equity whereon this court can ground any decree or give any relief against this defendant. Second. Because the complainant seeks to make proof of its claim without deducting amounts collected by it from collateral securities prior to making proof, and further seeks to compel the defendant to pay it ratably in proportion with other creditors on a basis of the gross amount of indebtedness without crediting the collections from said collateral securities. Third. Because the complainant is estopped in equity from making new proof, having made proof according to law, and received dividends upon the basis of the said proof.'

This demurrer was overruled, and the receiver answered as follows '(1) That this defendant has never made or declared any dividend to the creditors of the First National Bank of Palatka. On the contrary thereof, this defendant says that he was made receiver of the said bank by appointment of the United States comptroller of the currency, under section 5234 of the Revised Statutes, and that since his said appointment he has paid over to said comptroller all moneys derived by him from the assets of the said bank in accordance with the terms of the said law, and that the appointment of the complainant and the dividend thereunder set forth in the bill of complaint were made by the said comptroller and this defendant had nothing whatever to do therewith, except to transmit to the complainant the checks of the said comptroller representing the said payments, which said payments were made in pursuance of the provisions of section 5236 of the Revised Statutes, and that this defendant has not and cannot have any authority to make disbursements to any of the creditors of the said bank, nor has he in his hands any funds which are available for that purpose. On the contrary thereof, this defendant is charged under the law of his appointment with the duty of transmitting to the comptroller all moneys realized from the assets of the said bank. (2) And, further answering the said bill, this defendant denies that the complainant gave due notice that it would demand a pro rata dividend upon the whole amount due to it without deducting the amount collected on collateral security. On the contrary thereof, this defendant avers the fact to be that the complainant accepted the said ruling of the said comptroller without demur, and accepted from the said comptroller, through this defendant, without protesting notice of any kind, the checks of the said comptroller in payment of the dividends mentioned in the bill, and that it was not until the 15th of March, 1894, that the complainant gave notice of any kind that it dissented from the said ruling of the comptroller, and would demand payment upon a different basis; that since December 1, 1892, the said comptroller has made disposition of the assets of the said bank in his hands in good faith, believing that the matter of his said ruling was at rest; so that the complainant should now be estopped to demand an apportionment on a different basis. (3) And, further answering the said bill, this defendant says that he has realized in money from the assets of the said bank the sum of $176,317.91; that under the orders of the said comptroller he has disbursed the sum of $51,561.33, for the expenses of his receivership, 'in which expenses are included moneys paid on decree in litigated case in this court, and for loans paid, etc amounting to the sum of $17,653.55'; that there remains in the hands of this defendant the sum of $907.55, which is subject exclusively to the orders of the said comptroller; and that the remaining assets of the said bank consist of sundry parcels of real property and some securities and choses in action, many of which are absolutely worthless, and the value of the rest of which cannot be estimated. (4) And, further answering the said bill, this defendant denies that there has been great or any delay in winding up the matters of the said bank. On the contrary thereof, the assets of the said bank have been realized upon with the utmost expedition consistent with the character of the same, and the great business depression which has existed in Florida since this defendant took charge of the affairs of the said bank. Moreover, this defendant, in all matters concerning the management of the assets of the said bank, has acted strictly in accordance with instructions received from the comptroller of the currency.'

The complainant excepted to this answer as insufficient, but the exceptions were overruled, whereupon the complainant, without replying, set the case for hearing on bill and answer. On the hearing the circuit court rendered a decree as follows 'It is ordered, adjudged, and decreed that the complainant is entitled to receive from the assets of the said First National Bank of Palatka a distributive share and dividend as one of the creditors of said bank, based upon, and to be calculated upon, the whole amount of the indebtedness due said complainant from said bank, principal and interest, to wit, upon the basis of the sum of $16,103.81, as the amount of the indebtedness due complainant on July 17, 1891, with interest thereon from July 17, 1891, and crediting thereon as partial payments the dividends heretofore paid on the dates of their several payments. It is further ordered, adjudged, and decreed that the said defendant, as received, declare the dividend to be due to complainant upon the said basis of its said claim, as above stated, and that said amount of such dividend should be paid out of any assets of the defendant bank which were in the hands of the said defendant, as receiver, on the 15th day of March, 1894, or came into his hands since the said 15th day of March, 1894, after the...