Conquest v. Broadway Nat. Bank

• Decision Date: 26 February 1916
• Citation: 183 S.W. 160,134 Tenn. 17
• Parties: CONQUEST v. BROADWAY NAT. BANK.
• Court: Tennessee Supreme Court

183 S.W. 160

134 Tenn. 17

CONQUEST v. BROADWAY NAT. BANK.

Supreme Court of Tennessee.

February 26, 1916

Certiorari to Court of Civil Appeals.

Action by Mrs. Nancy E. Conquest against the Broadway National Bank. Certiorari to review the judgment of the Court of Civil Appeals affirming a decree of the chancellor for the plaintiff. Reversed, and bill dismissed.

Jeff McCarn and Alvin McCarn, both of Nashville, for complainant.

Jordan Stokes, Jr., of Nashville, for defendant.

GREEN J.

This case comes before us upon an agreed statement of facts which recites:

J. N Conquest died January 30, 1913, intestate and insolvent, in Davidson county, Tenn. The complainant, Nancy E. Conquest, is his widow. He also left several children. At the time of Conquest's death he had on deposit in the Broadway National Bank $436.82, and the bank held his note for $400 which was due March 17, 1913.

One W H. Balthrop qualified as administrator of Conquest's estate, and on February 12, 1913, drew a check on the Broadway National Bank for the amount of this deposit. The bank refused to pay this check, and informed the administrator that it had applied $400 of the deposit to the payment of Conquest's note, less a small rebate for interest paid in advance. It tendered the balance of about $39 to the administrator, which the administrator declined to accept. Later commissioners were appointed to set apart a year's support for complainant. There was set apart to her by the commissioners as part of her year's support the $436.82 remaining to the credit of her husband in the Broadway National Bank at the time of his death. The complainant then drew her check on the Broadway National Bank for $436.82; but the bank refused payment of this check for the same reason it had declined to honor the check of the administrator.

The widow then filed this suit. The bank answered, and paid into court the balance of the money in its hands belonging to deceased, less the amount of his note, and denied liability for anything else.

The chancellor held that the widow's claim to her husband's balance in the bank was superior to the bank's right of set-off, and rendered a decree in her favor. This decree was affirmed by the Court of Civil Appeals.

The Court of Civil Appeals was of opinion that the bank had no lien on the deposit to secure the indebtedness of deceased to it, and said:

"In the absence of a lien in favor of the bank on such deposit, we are of opinion that the complainant's right as widow of her deceased husband, which is fixed by the statute, passed for the very purpose of protecting widows and those dependent upon them by giving to them a year's support to enable them to maintain themselves and families, notwithstanding the estates of their husbands may be indebted to insolvency, is superior to the bank's right of set-off."

The case comes before us on petition for certiorari filed by the bank.

The relation between bank and depositor is that of debtor and creditor. Harris v. Bank, 110 Tenn. 249, 75 S.W. 1053; Wagner v. Bank, 122 Tenn. 164, 122 S.W. 245, 135 Am. St. Rep. 869, 19 Ann. Cas. 483.

The agreed statement recites that Conquest died insolvent. This being so, at the time of his death the bank had the right to set off the note it held on him against his deposit, even though the note was not yet due. This has been settled in Tennessee by the case of Nashville Trust Company v. Bank, 91 Tenn. 350, 18 S.W. 822, 15 L. R. A. 710.

It is immaterial whether this right of the bank to apply his deposit to the satisfaction of a debtor's obligation be called a lien or not. It is referred to as a lien in Wagner v. Bank, supra, although in 3 Ruling Case Law, pp. 592, 593, it is said that such right is not, strictly speaking, a lien.

The bank had this right of set-off against the deceased prior to the maturity of his note upon his insolvency appearing, and it would have had such a right against his assignee for the benefit of creditors or against his trustee in bankruptcy. Nashville Trust Company v. Bank, supra; New York County National Bank v. Massey, 192 U.S. 138, 24 S.Ct. 199, 48 L.Ed. 380.

The weight of authority is likewise to the effect that in case of insolvency of the depositor such a right of set-off with respect to unmatured debts exists against his...