Advance Exchange Bank v. Baldwin

• Decision Date: 12 September 1930
• Citation: Advance Exchange Bank v. Baldwin, 224 Mo.App. 616, 31 S.W.2d 96 (Mo. App. 1930)
• Parties: ADVANCE EXCHANGE BANK BY S. L. CANTLEY, COMMISSIONER, RESPONDENT, v. THOS. A. BALDWIN AND MABEL BALDWIN, APPELLANTS
• Court: Missouri Court of Appeals

31 S.W.2d 96

224 Mo.App. 616

ADVANCE EXCHANGE BANK BY S. L. CANTLEY, COMMISSIONER, RESPONDENT, v. THOS. A. BALDWIN AND MABEL BALDWIN, APPELLANTS

Court of Appeals of Missouri, Springfield

September 12, 1930

Appeal from the Circuit Court of Stoddard County.--Hon. W. S.C. Walker, Judge.

REVERSED AND REMANDED (with instructions).

Judgment reversed and remanded.

Dearmont & Russell and Homer Williams for appellant.

(1) The rule that personal property descends to the administrator is an invention for the convenience and benefit of creditors and his title is only a qualified one, the heir at all times having an equity in such property.Richardson v Cole,160 Mo. 372;McCracken v. McCaslin,50 Mo.App. 85;Byers v. Weeks,105 Mo.App. 72;Todd v. James,157 Mo.App. 416;Bell v. Bank,188 Mo.App. 388.(2) On the 29th day of November, 1927, the probate court of Lewis county, Missouri, ordered this deposit in respondent bank paid to appellant, "sole legatee and distributee, by way of distribution."The suit was not filed until July 3, 1928.Therefore, appellant was, at the date of the filing of the suit, the legal as well as the equitable owner of the deposit and, as such was entitled to have the full amount of it credited on his note which was past due.Hall v. Allen,80 Mo. 286.(3) The Commissioner of Finance took the property of the bank subject to every disability to which it would have been subject in the bank had it not become insolvent.State ex rel. Gentry v Bank, 14 S.W.2d 597;R. C. L. 656, 720.

Wammack Welborn & Cooper for respondent.

(1) The Commissioner of Finance in liquidating the affairs of an insolvent bank, takes title to its assets in the same way that any other assignee for the benefit of creditors takes title to the assigned estate.Merchants Ice & Fuel Company v. Holland Banking Co.,8 S.W.2d 1031, par. 1.(2)He takes the property subject to all set-offs based on liabilities of the bank existing at the time he took charge.The status of both the debtors and creditors of the assignor becomes fixed by the assignment, and whether or not the right of set-off exists between an assignee of an insolvent and a debtor, in favor of the latter, depends upon whether or not at the time of the assignment there existed a mutual indebtedness between the insolvent and the debtor, that is to say such as would have entitled the insolvent to an action against the debtor and the debtor to an action against the insolvent.Storts v. Mills,93 Mo.App. 206;Kortjohn v. Natl. Bank,63 Mo.App. 166;Storts v. George,150 Mo. 1;Reitz v. Hayward,100 Mo.App. 229;Homer v. Bank of Commerce, 140 Mo. 236.

BAILEY, J. Cox, P. J., and Smith, J., concur.

OPINION

BAILEY, J.--

This is a suit on a promissory note instituted by the Commissioner of Finance of the State of Missouri, in charge of the Advance Exchange Bank, which failed March 27, 1927.The petition is in regular form, alleging defendant executed his note of date February 22, 1926, payable to the Advance Exchange Bank, for $ 2000, upon which was due, after deducting credits, the sum of $ 1147.85.Defendant, by his answer, admitted the execution of the note but set up a counterclaim based upon the alleged facts that on October 4, 1926, his mother, Carrie Pool Baldwin, of Adams county, Illinois, died testate, leaving all her property to defendant; that she owned no mansion house in Missouri, but owned real property in Lewis, Cape Girardeau, Stoddard and Bollinger counties, in this State; that she owed no debts in Missouri, but that an administration was necessary in order to comply with the inheritance tax laws of Missouri, and that for such purpose only, administration was had on said estate in Lewis county, where decedent had property; that after the death of Carrie Pool Baldwin and probate of her will in Illinois, defendant presented to the officers of plaintiff bank a duly authenticated copy of said will for the purpose of withdrawing $ 1078.24, which she had in said bank at the time of her death; that at the earnest solicitation of the bank's president, he permitted the money to remain in the bank and no change was made in the style of the account except by changing it from "Carrie Pool Baldwin" to, "Harry Carstarphen, administrator for C. P. Baldwin, deceased;" that, "from time to time the Missouri administrator, who was keeping separate the estate in Missouri, for inheritance tax purposes, from the general estate, deposited in the plaintiff bank money collected from the assets of said estate, including rents from real estate, all of which passed to defendant under the terms of the will of his mother, Carrie Pool Baldwin, at her death, subject only to the payment of the debts, if any, which the said Carrie Pool Baldwin owed to the citizens of Missouri."The answer further set up that the administrator collected, for this defendant, rents on real estate amounting to more than the sum of $ 1221.25, which was on deposit in the plaintiff bank in the name of "Harry Carstarphen, administrator of Carrie Pool Baldwin, deceased;" that, "said administrator withdrew from said plaintiff bank from time to time before it closed its doors all of the funds, if any, which properly belonged to him as such administrator, by order of the probate court having jurisdiction of said estate and that said sum of $ 1221.25, while appearing on the books of the bank in the name of 'Harry Carstarphen, administrator of C. P. Baldwin, deceased,' in fact and in equity and good conscience, belonged to the defendantThomas A. Baldwin."

The answer further alleged the finance commissioner had recognized that the account deposited in the name of said administrator belonged solely to defendant by mailing him a dividend check on February 13, 1928; and that prior to the institution of this suit the administrator had been ordered by the probate court of Lewis county to transfer the entire Baldwin estate to defendant.

The reply was a general denial.Upon the issues thus made the cause was tried before the court, without a jury, resulting in a judgment for plaintiff, from which defendant has duly appealed.

The evidence was offered in support of the allegations of defendant's answer but there is no necessity of setting forth such evidence.The only error assigned is that the court erred in finding that Thomas Baldwin, the defendant, was not entitled to set off the amount of the deposit in the bank in the name of "Harry Carstarphen, administrator of C. P. Baldwin, deceased," at the time it closed its doors, against his note held by the bank at the same time.There is no dispute as to the facts which the evidence shows were about as alleged in defendant's answer.

The question then in this case is, whether or not a deposit in the name of an administrator of an estate, after the bank in which such deposit was made has failed and been taken over by the State Commissioner of Finance, can be set off by the sole heir to such estate against a note of such heir owing by him to the bank, the evidence showing the estate to be free of debt.The law, of course, is well settled that, when the commissioner took charge of the...