Cline v. Union Trust Co.
| Decision Date | 07 April 1934 |
| Docket Number | No. 14938.,14938. |
| Citation | 189 N.E. 643,99 Ind.App. 296 |
| Parties | CLINE v. UNION TRUST CO. |
| Court | Indiana Appellate Court |
OPINION TEXT STARTS HERE
Appeal from Kosciusko Circuit Court; Donald Vanderveer, Judge.
Suit by Ed L. Cline against the Union Trust Company under the Declaratory Judgment Act. From a judgment for the defendant, plaintiff appeals.
Affirmed.
Darrow, Rowley & Shields, of La Porte, for appellant.
Parker, Crabill, Crumpacker & May, of South Bend, for appellee.
In order to indemnify one Arthur L. Hubbard as surety upon an appeal bond executed by the appellant as principal, the appellant deposited with the appellee the sum of $40,000, and received as evidence thereof a receipt reading as follows:
“South Bend, Ind., July 1st, 1930.
“Received from E. L. Cline Ctf. of Deposit No. 25651, for $40,000.00 issued by the Indiana Trust Company of Indianapolis, Indiana, on the 9th day of June, 1930, in favor of E. L. Cline, to be accounted for by Union Trust Company according to the terms of a contract dated 7/1/30, executed by and between said E. L. Cline, Arthur L. Hubbard, and Union Trust Company.
“40,000.00 President.”
The contract referred to in said receipt executed contemporaneously therewith, and constituting a part thereof, was in words and figures as follows:
“Receipt and Agreement
“Whereas, Ed L. Cline, of LaPorte, Indiana, is party defendant in certain litigation arising in LaPorte County, venued to St. Joseph Superior Court No. 1, entitled Roy R. Rodabaugh and Frank Madden vs. Ed L. Cline; and
“Whereas, upon the trial of said cause heretofore had, judgment was entered against said Cline in the sum of $32,931.25; and
“Whereas, in order to perfect an appeal to the Appellate Court of the State of Indiana it is required that the said Cline file an appeal bond with acceptable surety thereon in the sum of Forty Thousand Dollars ($40,000.00); and
“Whereas, Arthur L. Hubbard, of South Bend, Indiana, is ready and willing to execute such bond in the penalty aforesaid as surety for the said Cline, provided that the said Hubbard is duly indemnified against liability thereon;
“Now, therefore, for the purpose of providing the said Hubbard such indemnity as against surety on said bond against all and any liability, loss, cost or expense thereon, and for the purpose of inducing the execution by him of said appeal bond, it is agreed as follows:
“(1) The said Cline has this date deposited with the Union Trust Company of South Bend, Indiana, the sum of Forty Thousand Dollars ($40,000.00), the receipt whereof is hereby acknowledged, the same to be held by said Trust Company upon the following conditions:
“(a) Said money is not to be segregated but is to go into the general funds of said Trust Company and one year from this date said Trust Company will pay the said Cline four per cent (4%) interest on said money and annually thereafter so long as said suit is pending on appeeal to the said Appellate Court of the State of Indiana.
“(b) Said Trust Company is to hold said $40,000.00 until the final disposition of said appeal by the said Appellate Court and until the certification back to the St. Joseph Superior Court No. 1 of said cause by said court or by any other court to which said cause may be transferred.
“(d) If said judgment is affirmed on appeal, then upon the certification back to the lower court of such affirmance said Trust Company shall pay in to the Clerk of the St. Joseph Superior Court No. 1 for the purpose of satisfying said judgment principal, interest and costs, the said sum of $40,000.00, or so much thereof as may be necessary to fully satisfy said judgment, principal, interest and costs, and if there be an excess after the satisfaction of said judgment said Trust Company will turn the said excess over to the said Cline; or in the event that said Arthur L. Hubbard as surety on said bond shall pay said judgment then the said Trust Company shall pay to the said Arthur L. Hubbard the said sum of $40,000.00 or so much thereof as shall be necessary to fully reimburse the said Hubbard and save him harmless of and from all liability, loss, costs or expense accruing against him on account of signing said bond.
“(e) In any such event said Trust Company shall retain as its fees herein the sum of Fifty Dollars ($50.00).
“(f) The said Trust Company agrees that it will not dispose of said sum in any other manner or times or for any other purpose than above specified, but will safely hold said sum as trustee (but with the right however to commingle said sum with its own funds) for the benefit of said Arthur L. Hubbard, E. L. Kline (Cline), or the said - judgment creditors in said judgment.
“(g) This receipt shall be nontransferable, nor shall the holder hereof have any right to require the payment to him of said sum except and upon the conditions above set forth.
“(h) In the event of the death of any individual mentioned herein this agreement shall inure to the benefit of his personal representatives.
“(i) This instrument is signed by Union Trust Company as the receiver of said money, by the said Ed L. Cline and Arthur L. Hubbard, as evidencing their concurrence in the provisions hereof, in triplicate, this 1 day of July, 1930.
“By Arthur L. Hubbard
“Ed L. Cline.”
The appellant had a certificate of deposit for the sum of $40,000 payable to his order executed by the Indiana Trust Company of Indianapolis; this was properly indorsed and received by the Union Trust Company as cash, and by it credited to its general funds. In due course and through the usual channels this certificate of deposit was presented to and paid by the Indiana Trust Company. The funds resulting from the collection of said certificate of deposit passed into and were commingled with the general funds of appellee and were not segregated or set apart from its other funds. When the appellant indorsedthe certificate of deposit on the Indiana Trust Company to the appellee, July 1, 1930, appellee paid the interest then due on the certificate to appellant; the interest accruing thereon after that date was collected and retained by the appellee with knowledge and consent of appellant. April 18, 1931, Arthur L. Hubbard departed this life. His estate was insolvent. June 4, 1931, the appellee closed its doors. June 5, 1931, the Bank Commissioner took possession and control of appellee, and retained such possession and control until July 15, 1931, when appellee was placed in voluntary liquidation. June 5, 1931, appellee trust company was solvent; there was no substantial difference in the state of the books of appellee and its accounts between June 4 and July 16, 1931. At the time appellee closed its doors it was indebted to various estates, trusts, and other beneficiaries for which it had stood in the capacity of trustee, executor, administrator, or other fiduciary in the aggregate sum of $135,000 for trust funds which it had commingled with its own personal funds; this balance of $135,000 was much greater than the amount of cash and cash items which appellee had on hand in its vaults, and due from banks, bankers, or any source at the time it closed its doors.
July 1, 1930, the appellee had assets of loans and discounts, mortgage loans, land contracts, installment mortgage loans, cash on hand, bonds and securities, not including office fixtures, banking house, and real estate amounting to the sum of $4,445,986.06, and on June 5, 1931, its assets of similar kind and character amounted to the sum of $4,854,060.86. October 1, 1931, the appellant filed a new appeal bond in substitution of the bond on which the said Hubbard was surety and Hubbard's estate was released from any further liability by virtue of said appeal bond. Appellant then made demand on appellee through proper channels for the return to him of the sum of $40,000, which demand was refused.
For the purpose of having the respective rights of the parties determined under the receipt, contract, and conduct in connection therewith, the appellant brought suit against the appellee under the “Uniform Declaratory Judgments Act” Acts 1927, c. 81, p. 208, by a complaint in three paragraphs. As the record comes to us, it is not necessary to incorporate this complaint or its substance in this opinion. It is sufficient to say that the ultimate purpose sought was the rendition of a judgment declaring appellant's deposit of $40,000 in appellee company to be a special deposit, entitling appellant to a preferential payment thereof, over the general depositors, out of the assets of the appellee company. Each paragraph of the complaint was answered by a general denial, and a second paragraph alleging facts in estoppel of appellant's right to recovery as prayed in his different paragraphs of complaint. Appellant filed a reply in denial to each second paragraph of answer. On the issues thus formed, the cause was tried by the court without a jury. At the request of the appellee the court found the facts specially and stated its conclusions of law thereon. The facts as found by...
To continue reading
Request your trial