Bank v. O'Donnell

• Decision Date: 19 January 1897
• Citation: 45 N.E. 984,165 Ill. 32
• Parties: JOLIET NAT. BANK v. O'DONNELL.
• Court: Illinois Supreme Court

165 Ill. 32

45 N.E. 984

JOLIET NAT. BANK

v.O'DONNELL.

Supreme Court of Illinois.

Jan. 19, 1897.

Appeal from appellate court, Second district.

Petition by the Joliet National Bank against James L. O'Donnell, assignee of Henry Fish & Sons, to be allowed to prorate with other creditors in the assets in the hands of said assignee. From a judgment of the appellate court (65 Ill. App. 543) affirming an order denying the petition, petitioner appeals. Reversed.

Magruder, C. J., and Cartwright, J., dissenting.

Donahoe & McNaughton, for appellant.

Haley & O'Donnell, for appellee.

This is an appeal by the Joliet National Bank from a judgment of the appellate court affirming an order of the county court of Will county denying appellant's petition, in which it prayed that it might be allowed to prorate with the creditors of Henry Fish & Sons in the assets of the firm in the hands of the assignee for distribution. Henry Fish & Sons, bankers doing business under the name of the Stone City Bank, failed and made an assignment on the 30th day of November, 1892, to James L. O'Donnell, assignee. O'Donnell qualified as such assignee on December 2, 1892, and is still acting as such. The appellant, doing a banking business at Joliet, Ill., at about an hour or two before the Fish Bank closed its doors and made the assignment to O'Donnell, paid to the Fish Bank the sum of $4,200 in money, receiving therefor a draft or bill of exchange drawn by said Fish Bank on its New York correspondent, the Third National Bank. This money was, in good faith, at once taken to the Fish Bank, and either immediately paid over to its depositors, who, it seems, had about that time made ‘a run’ on the Fish Bank, or was on the same day turned over to assignee, the appellee, and constitutes a portion of the funds that came to appellee's hands. The draft was at once forwarded by the Joliet National Bank to its New York correspondent, the Hanover National Bank, and by the latter, on December 2, presented for payment to the Third National Bank; but payment was refused, and the draft went to protest. There is no question, and the record discloses the fact, that when the draft was drawn, and at the time of its presentment for payment, the Fish Bank had more funds to its credit in the Third National Bank than that demanded by the draft. Payment of the draft, however, was refused because the Third National Bank of New York then held Joliet Enterprise Company paper which had been indorsed by the Fish Bank and discounted by the Third National Bank, and the proceeds placed to the credit of the Fish Bank, in consequence of which they claimed they had the right to a set-off on the Enterprise paper, as against the deposit to the credit of the Fish Bank. The right of set-off was at once challenged, and suit immediately commenced in the supreme court of New York by the Joliet National Bank against the Third National Bank, when it was afterwards, on motion of the Third National Bank, transferred to the United States district court for the Southern district of New York, where, under the issues presented, the case was decided adversely to the Joliet National Bank. Soon after the case was decided the Joliet National Bank, on November 26, 1894, presented the claim to the assignee, and filed it in the county court, together with a petition for an allowance of the claim. Objection being made to filing the claim, on December 26, 1894, appellant entered a motion for leave to file the claim. The court held the motion under advisement until April 6, 1895, when leave was granted to file the claim and petition for the allowance thereof. The county court allowed the claim, but ordered that it should not share in the dividends until payment in full of all claims which had been presented to the assignee prior to March 15, 1893. At the time the claim was filed in the county court, the assignee had made no payment on any claim, nor had any payment been made any creditor when judgment was entered by the county court in this case. The following is a copy of notice published by the assignee in the Joliet Times on the 12th day of December, 1892, notifying creditors to present their claims against the insolvent estate: ‘Assignee's Sale. The undersigned having been appointed assignee of the property and effects of Henry Fish, Henry M. Fish, George M. Fish, and Charles M. Fish, doing business as Henry Fish & Sons, by deed of assignment filed in the office of the county clerk of Will county, public notice is given to all persons having claims against said Henry Fish & Sons to present such claim, under oath or affirmation, within three months after December 15th, 1892. Such claims may be presented by filing the same, under oath or affirmation, with the county clerk of Will county, at his office. J. L. O'Donnell. Assignee. Joliet, Ill., Dec. 12th, 1892.’

CRAIG, J. (after stating the facts).

It will be observed that the assignee notified creditors, by publication, on the 12th day of December, 1892, to present claims against the insolvent estate within three months after December 15, 1892; and as appellant, the Joliet National Bank, failed to make a formal presentation of its claim to the assignee within the time specified, the question arises whether it is absolutely barred from sharing with other creditors who presented their claims in the assets of the insolvent estate. Section 2 of the voluntary assignment act provides: ‘That the assignee or assignees named in such assignment shall forthwith give notice thereof by publication in some newspaper published in the county, if any; and if none, then in the nearest county thereto, which publication shall be continued at least six weeks, and shall also send forthwith a notice thereof by mail to each creditor, of whom he or they shall be informed, directed to their usual place of residence, and notifying the creditors to present their claims under oath or affirmation to him within three months thereafter.’ Section 10 is as follows: ‘That any creditor may claim debts to become due as well as debts due, but on debts...