Cline v. Union Trust Co.
Decision Date | 07 April 1934 |
Docket Number | 14,938 |
Parties | CLINE v. UNION TRUST COMPANY |
Court | Indiana Appellate Court |
Rehearing denied June 28, 1934.
Transfer denied October 3, 1934.
From Kosciusko Circuit Court; Donald Vanderveer, Judge.
Action by Ed L. Cline against the Union Trust Company for a declaratory judgment. From a judgment for defendant plaintiff appealed.
Affirmed.
L Darrow, Earl Rowley, and C. V. Shields, for appellant.
Roland Obenchain, 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, Indiana, July 1, 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
The contract referred to in said receipt executed contemporaneously therewith, and constituting a part thereof was in words and figures as follows:
The appellant had a certificate of deposit for the sum of $ 40,000.00 payable to his order executed by the Indiana Trust Company of Indianapolis, this was properly endorsed 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 endorsed the 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 $ 135,000.00 for trust funds which it had commingled with its own personal funds; this balance of $ 135,000.00 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 $ 40,000.00, 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 Judgment Act," Acts 1927, 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 the court...
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