Exchange Nat. Bank of Montgomery v. Stewart

• Decision Date: 21 January 1909
• Citation: 48 So. 487,158 Ala. 218
• Parties: EXCHANGE NAT. BANK OF MONTGOMERY ET AL. v. STEWART.
• Court: Alabama Supreme Court

48 So. 487

158 Ala. 218

EXCHANGE NAT. BANK OF MONTGOMERY ET AL. v. STEWART.

Supreme Court of Alabama

January 21, 1909

Appeal from City Court of Montgomery; A. D. Sayre, Judge.

Action by Mose W. Stewart, trustee in bankruptcy, against the Exchange National Bank of Montgomery and the Union Bank &amp Trust Company. From a judgment overruling demurrers to the bill, defendants appeal. Affirmed.

The bill alleges: That the Conecuh Pine Lumber & Manufacturing Company was a corporation under the laws of Alabama, and on the 4th of June, 1907, it was adjudged to be a bankrupt, and the complainant was appointed the trustee on the 24th day of June, 1907, and qualified as such on June 25th; that the Exchange National Bank of Montgomery is a corporation organized under the national banking laws, and is engaged in the business of banking in the city of Montgomery, and the Union Bank & Trust Company is a corporation organized under the laws of Alabama, and has been engaged in business in Montgomery, Ala.; that on and prior to June 30, 1906, and on March 1, 1907, respectively, the Conecuh Pine Lumber &amp Manufacturing Company was engaged in business in the city of Montgomery, and on the dates last above mentioned was indebted to the Fourth National Bank of Montgomery in a large sum, to wit, $10,000 or more, which indebtedness had been continuously in existence since and prior to June 30, 1906 that the Conecuh Pine Lumber & Manufacturing Company was also indebted to numerous and divers other persons on said dates and that a large portion of said indebtedness is still due and unpaid. It is further shown on information and belief that on June 30, 1906, Thomas W. Tebb and R. N. Chestnutt executed and delivered to said Union Bank & Trust Company a note for $7,000, dated June 30, 1906, and payable December 30, 1906, which note is attached as an exhibit to the bill. It is further averred on information and belief that the note is secured by 330 shares of the capital stock of the Conecuh Pine Lumber & Manufacturing Company, of the par value of $25 and issued to Thomas W. Tebb and placed by him with said Union Bank & Trust Company as collateral security for said note, and that said note, with the collateral security, was transferred to the Exchange National Bank for a consideration unknown to orator. It is further averred on information and belief that said Conecuh Pine Lumber & Manufacturing Company had an account with the Union Bank & Trust Company, and that they delivered to the Union Bank & Trust Company a check for $280 (check is made exhibit to the bill), and that the amount of said check was appropriated by said Union Bank & Trust Company under some arrangement, express or implied, between said Union Bank & Trust Company and the Conecuh Pine Lumber & Manufacturing Company, or its officer or officers, agent or agents, and was applied in payment of the interest for a period of six months on the $7,000 note signed by Tebb and Chestnutt, and the amount of said check charged by said Union Bank & Trust Company to the account of said Conecuh Pine Lumber & Manufacturing Company, without any adequate, legal, or valid consideration to said Conecuh Pine Lumber & Manufacturing Company from any person or corporation for the amount of said check, and that when the said Union Bank & Trust Company marked said check paid, and applied the amount thereof to the payment of the interest on said note of Tebb and Chestnutt, and charged the same to the account of the Conecuh Pine Lumber & Manufacturing Company, it knew that said money was being appropriated out of the assets of said Conecuh Pine Lumber & Manufacturing Company on the debt of Tebb and Chestnutt for and on which said Conecuh Pine Lumber & Manufacturing Company was in no manner legally liable.

It is further averred on information and belief that prior to June 30, 1906, said Union Bank & Trust Company held a note signed by said Tebb and Chestnutt, or on which they were each liable in the sum of $8,000, and that prior to June 30, 1906 payments were made on such notes or debts at divers times out of the money or assets of said Conecuh Pine Lumber & Manufacturing Company. The said Union Bank & Trust Company, on the debt of said Tebb and Chestnutt aggregating the sum of $2,000, and that at the time said payments...