Butler v. Cantley

• Decision Date: 07 March 1932
• Citation: 47 S.W.2d 258,226 Mo.App. 1047
• Parties: C. B. BUTLER, ADMINISTRATOR OF THE ESTATE OF ALBERT J. RAMSEY, DECEASED, APPELLANT, v. S. L. CANTLEY, COMMISSIONER OF FINANCE AND DONIPHAN STATE BANK, RESPONDENTS
• Court: Missouri Court of Appeals

47 S.W.2d 258

226 Mo.App. 1047

C. B. BUTLER, ADMINISTRATOR OF THE ESTATE OF ALBERT J. RAMSEY, DECEASED, APPELLANT, v. S. L. CANTLEY, COMMISSIONER OF FINANCE AND DONIPHAN STATE BANK, RESPONDENTS

Court of Appeals of Missouri, Springfield

March 7, 1932

Appeal from the Circuit Court of Ripley County.--Hon. Robert I Cope, Judge.

REVERSED AND REMANDED (with directions).

Reversed and remanded.

Fulbright & Sheppard, C. B. Butler and C. T. Bloodworth for appellants.

(1) All funds, which are the proceeds of pensions given by the Federal Government, in the hands of guardians or curators of minors or insane veterans, are government funds held by said guardian merely as agents of the government for the benefit of such wards, and are not subject to assignment, execution attachment or taxation. U. S. Statutes at Large, sec. 3466; U. S. v. Hall, 98 U.S. 343; Title 38, sec. 475 of R S. of U. S.; Tama Co. v. Kepler (Ia.), 96 N.W. 912; 11 R. C. L., sec. 38, p. 525; Manning v. Spry (Ia.), 96 N.W. 875; Adams v. Newel, 8 Vt. 180; Frisbie v. U.S. 157 U.S. 160; Title 38, U.S.C. A., sec. 454; 21 R. C. L., par. 13, p. 247; U. S. v. Hall, 93 U.S. 343; U. S. v. Ryckman, 12 F. Rep. 46; U. S. v. Mayors et al., 15 F. Rep. 411. (2) All government funds, including funds referred to in point 1, in a state bank, are preferred and entitled to priority of payment upon insolvency of the bank, and should be dealt with as trust funds. U. S. Statutes at Large, sec. 3466; State v. Kilgore State Bank (Neb.), 201 N.W. 901; U. S. v. Oklahoma, 261 U.S. 253; Stoner v. U.S. 4 F.2d 748; U. S. v. Porter, 19 F.2d 541; U. S. v. San Juan County, 280 F. 120; United States funds entitled to priority, R. S. 3466, C. S. 6372; Equitable Title Co. v. Conn. Grass Co., 290 F. 712; U. S. F. & G. Co. v. Porter, 3 F.2d 57; Mellon v. Mich. T. Co., 45 S.Ct. 511, Aff., 2 F.2d 194; L. M. Ins. Co. v. J. S. Corp., 300 F. 952; Aff., 46 S.Ct. 182; Davis v. Miller-Link L. Co., 296 F. 649; Nolte v. Hudson Nav. Co., 8 F.2d 859; U. S. v. Adams, 9 F.2d 624; Cook County National Bank v. U.S. 107 U.S. 445. (3) The proceeds of War Risk Insurance Policies, disability, compensation and adjusted compensation of World War veterans in the hands of their administrators, and not yet delivered to the beneficiaries, stand in the same relation as proceeds of pensions, and are subject to the same rules as to exemptions from assignments, execution, attachment and taxation. See authorities under points 1 and 11, and also the following: U. S. Code Annotated. Title 38, page 217, sec. 454; Cassarello v. U.S. 271 F. 486; In re: Cross' Estate, Cross v. State et al., 278 P. 414; Watkins v. Hall, Tax Commissioner, 147 S.E. 876; U. S. Statutes at Large, p. 1226, sec. 514.

Eugene W. McGee and Lawrence E. Tedrick for respondents.

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

OPINION

BAILEY, J.

This is a suit tax by the administrator of the estate of Albert J. Ramsey, deceased, to have certain funds deposited by him in the defunct Doniphan State Bank, derived from the proceeds of War Risk Insurance, declared to be preferred. The claim was duly filed before S. L. Cantley, Commissioner of Finance in charge of said bank. The following is an agreed statement of facts: "Chas. B. Butler is the duly appointed, qualified and acting administrator of the estate of Albert J. Ramsey, deceased, under and by virtue of the appointment made by the probate court of Ripley county, Missouri, and was such on the 21st day of November, A. D. 1930, and had been for sometime prior thereto; that as such administrator of the estate of Albert J. Ramsey, deceased, he had in his possession, under his control and custody the sum of $ 5330.30, which money was received by him as such administrator from the War Risk Insurance Department of the United States Treasury through the U.S. Veteran's Bureau; that said sum of $ 5330.30 was the amount received by such administrator as the proceeds of an insurance policy held by Albert J. Ramsey, his mother being the beneficiary in said policy; that his mother died before the distribution of said money was made and that the brothers and sisters of the said Albert J. Ramsey are now the beneficiaries of said policy under the law. That such sum of money was deposited in the Doniphan State Bank of Doniphan, Missouri, at the date of its closing, to-wit, November 21, 1930, and that thereafterwards, within the four months time specified in the notice to creditors of the Doniphan State Bank, between the dates of December 24, 1930, and April 24, 1931, the claimant, Chas. B. Butler filed proof of his claim against the Doniphan State Bank with the Bank of Doniphan, Special Deputy Commissioner of Finance, in charge of the liquidation of the Doniphan State Bank; that claimant in his claim set up and urged that it be approved and allowed as a preferred claim; that the claim was duly allowed by the Special Deputy Commissioner of Finance in charge as a general or common claim only, and refused and denied by it as a preferred claim, but certified it to the circuit court of Ripley county, Missouri, as a claim to be approved and allowed by the circuit court of Ripley county, Missouri, as a general or common claim in the sum of $ 5330.30. That a copy of said claim is hereto attached and marked as 'Exhibit A.'

"That at the date of the closing of the said Doniphan State Bank, to-wit, November 21, 1930, it had on hand in cash in its vaults or due from other bank on demand funds amounting to more than the amount of this claim, $ 5330.30."

Plaintiff also offered evidence that at the time he deposited said money in the Doniphan State Bank he informed Mr. Wright, agent of the surety company which paid him the money and the man who wrote the bond of the administrator and who was at the same time cashier of said bank, that the money was obtained from War Risk Insurance payable to the estate of Albert J. Ramsey and that, "when I deposited it as administrator of his estate I told Mr. Wright it was a trust fund and it was deposited in my name as administrator, etc," Mr. Wright admitted also that he knew, as cashier, that this administrator's account consisted of funds derived from the government to be paid out to the heirs of Albert J. Ramsey, deceased.

The claim was allowed as a common or ordinary claim by the finance commissioner, who thereafter certified same to the circuit court. The latter court, after hearing the evidence, likewise allowed the claim as a common or ordinary claim and disallowed it as a preferred claim. Plaintiff has appealed from that judgment.

It is conceded on both sides that if the funds deposited by the administrator were monies belonging to the government of the United States of America, within the meaning of section 3466 U.S. S. L., such funds are entitled to a preference and must be first satisfied. That statute reads as follows: "Section 3466. (Priority of debts due United States established.) Whenever any person indebted to the United States is insolvent, or whenever the estate of any deceased debtor, in the hands of the executors or administrators, is insufficient to pay all the debts due from the deceased, the debts due to the United States shall be first satisfied; and the priority hereby established shall extend as well to cases in which a debtor, not having sufficient property to pay all his debts, makes a voluntary assignment thereof, or in which the estate and effects of an absconding, concealed, or absent debtor are attached by process of law, as to cases in which an act of bankruptcy is committed. [R. S.]"

The money here received by the administrator and deposited by him in the Doniphan State Bank was payable to the estate of the deceased soldier of the world war under and by virtue of the terms of the War Risk Insurance Act, which as last amended, in part, reads as follows: "If no person within the permitted class be designated as beneficiary for yearly renewable term insurance by the insured either in his lifetime or by his last will and testament or if the designated beneficiary does not survive the insured or survives the insured and dies prior to receiving all of the two hundred and forty installments or all such as are payable and applicable, there shall be paid to the estate of the insured the present value of the monthly installments thereafter payable, said value to be computed as of date of last payment made under any existing award."--"Provided further, That in cases when the estate of an insured would escheat under the laws of the place of his residence the insurance shall not be paid to the estate but shall escheat to the United States and be credited to the military and naval insurance appropriation. This section shall be deemed to be in effect as of October 6, 1917." [Pp. 227-228, 1925, Sup. U.S. S., 38 U.S.C. A., p. 252, Art. 514.]

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