Boss v. Hardee, 6849.

Decision Date20 September 1937
Docket NumberNo. 6849.,6849.
PartiesBOSS et al. v. HARDEE.
CourtU.S. Court of Appeals — District of Columbia Circuit

Frederic D. McKenney, John S. Flannery, and G. Bowdoin Craighill, all of Washington, D. C., for appellants.

Swagar Sherley, Charles F. Wilson, and Henry B. Weaver, Jr., all of Washington, D. C., for appellee.

Before MARTIN, Chief Justice, and ROBB, GRONER, and STEPHENS, Associate Justices.

PER CURIAM.

On February 28, 1933, the Commercial National Bank of Washington became insolvent. The appellee Hardee is the Receiver. The appellants, copartners engaged in the real estate business in Washington and vicinity, were, on the date mentioned, indebted to the Bank in the sum of $118,000.00, evidenced by promissory notes, and secured by collateral. There was on the same date on deposit in the Bank in the name of the appellants, under certain account designations requested by them, the sum of $54,090 distributed as follows:

                  General Account           $1,124.86
                  Sales Department           7,663.65
                  Rent Department           22,147.95
                  Collection Account        14,007.65
                  Special Account            1,987.07
                  Insurance Department       7,158.82
                                           __________
                                           $54,090.00
                

After the Bank closed, the appellants made demand upon the Receiver1 to set off the total of the deposits against the indebtedness, and demanded also the return of the collateral — this upon the theory that the set-off, together with certain other credits which had accrued for the appellants, would discharge the entire indebtedness thereby entitling them to the possession of the collateral. Except to the extent of $3,746.93, representing the sum of the amounts in the General Account and the Special Account, plus an adjusted Rent Department item of $635, the Receiver refused to make the set-off, and refused to return the collateral. The appellants then brought this action in equity to compel the Receiver to make the set-off and to return the collateral.

As a factual predicate for the relief sought the appellants asserted in their bill of complaint that the deposits in question were owing to them in their own right as partners. They relied as a matter of law upon D.C.Code (1929) tit. 24, § 411, providing for set-off of mutual debts and claims under contract, and upon Scott v. Armstrong, 146 U.S. 499, 13 S.Ct. 148, 36 L.Ed. 1059, to the effect that set-off is not forbidden, as a preference, by the National Banking Laws. The factual foundation of the Receiver's refusal to make the set-off and to return the collateral, was, as set out in the answer, that the deposits in question were the deposits of the appellants not in their own right, but as agents for their clients and customers. The Receiver relied as a matter of law upon Dakin v. Bayly, 290 U.S. 143, 54 S.Ct. 113, 78 L.Ed. 229, 90 A.L.R. 999, and like cases, to the effect that debts may not be set off as mutual unless they stand in the same legal right.

At the trial witnesses were called by both parties, and documentary evidence was introduced. At the close of the hearing the trial court made certain purported findings of fact, followed by a conclusion of law that:

"Plaintiffs' appellants' accounts designated as Sales Department, Rent Department, Collection Account and Insurance Department, on deposit in the Commercial National Bank, aggregating $50,343.07,2 when the Bank was placed in the hands of the Receiver on February 28, 1933, were trust accounts and plaintiffs are not entitled to have such deposits set-off against plaintiffs' indebtedness to said Bank.

"Plaintiffs' bill of complaint should, therefore, be dismissed, with costs."

Thereupon a decree was entered dismissing the bill of complaint.

Examination of the purported findings of fact and of the pleadings and of the statement of the evidence contained in the bill of exceptions, discloses that the purported findings of fact are largely a repetition...

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  • Jordan v. American Eagle Fire Ins. Co., 9507.
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    ...federal. 43 German Alliance Ins. Co. v. Lewis, 1914, 233 U.S. 389, 34 S.Ct. 612, 58 L.Ed. 1011, L.R.A.1915C, 1189. 44 Boss v. Hardee, 1937, 68 App.D.C. 75, 93 F.2d 234 (under Equity Rule 70½, 28 U.S.C.A. § 723 ...
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    ...298 A.2d 211 (1972). 18. 79 U.S.App.D.C. at 22, 142 F.2d 82. 19. Defendant 4 and 5 refers to the appellants. 20. Boss v. Hardee, 68 App.D.C. 75, 93 F.2d 234 (1937). 21. D.C.Code 1973, § 22. D.C.Code 1973, § 28:3-305(2). ...
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