First Nat. Bank of Ariz. v. Butler, 6250
| Decision Date | 02 July 1957 |
| Docket Number | No. 6250,6250 |
| Citation | 82 Ariz. 361,62 A.L.R.2d 1113,313 P.2d 421 |
| Parties | , 62 A.L.R.2d 1113 FIRST NATIONAL BANK OF ARIZONA, a national banking association, Appellant, v. Charles E. BUTLER, as Trustee of the Estate of George Kenneth Henderson and Viola Henderson, his wife, individually, and George Kenneth Henderson, as surviving partner of the firm of Henderson & Roberts, Bankrupts, Appellee. |
| Court | Arizona Supreme Court |
Kramer, Roche & Perry, Phoenix, for appellant.
Gibbons, Kinney & Tipton, Phoenix, for appellee.
The First National Bank of Arizona has appealed from a judgment entered against it in a suit brought by Charles E. Butler as trustee in bankruptcy and from an order denying appellant's motion for a new trial. The defendant-appellant will be referred to as the bank and the plaintiff-appellee as the trustee; the bankrupts will be referred to by their surnames.
The matter is submitted upon an agreed statement approved by the trial judge. These are the admitted facts stated in chronological order: In the year 1949 George Kenneth Henderson and Paul Roberts were copartners doing business under the firm and style name of Henderson and Roberts. the partnership sold automobiles in Casa Grande, and to finance the 'floor planning' thereof they entered into a written 'Automobile Dealer Agreement' with the above-named bank. Thereafter the partner Roberts died. The business was insolvent and the estate of Henderson and his wife Vola, individually, and Henderson as surviving partner of the partnership firm, were adjudicated bankrupts in the United States District Court for Arizona. Appellee Butler was duly appointed by the referee in bankruptcy as trustee of such bankrupts' estate.
The trustee gave and the bank admittedly received actual notice of this adjudication of bankruptcy and the appointment of appellee Butler as trustee thereof.
At the time this notice was given all of the automobile contracts assigned to the bank had been paid in full and the bank held the net sum of $2,845.41 in the 'reserve' provided for in the dealers agreement. Thereafter the bank paid this entire sum to Henderson, the surviving partner, and Bertie Roberts, the surviving spouse of the deceased partner.
The bank seeks to justify its action in disbursing these funds to the survivors of the partnership, in the face of its knowledge of the adjudication of bankruptcy, on the grounds that the trustee did not procure a restraining order, injunction or other appropriate process against it, nor execute a bond or affidavit, as provided for in section 51-535, A.C.A.1939, 1952 Supp. (now section 6-269, A.R.S.). The pertinent part of this section reads as follows:
'Notice to any bank, doing business in this state, of an adverse claim to a deposit standing on its books to the credit of any person shall not be effectual to cause said bank to recognize said adverse claimant unless said adverse claimant shall also either procure a restraining order, injunction or other appropriate process against said bank * * * or shall execute to said bank * * * a bond, indemnifying said bank from any and all liability, loss, damage, costs and expenses, for and on account of the payment of such adverse claim or the dishonor of the check or other order of the person to whose credit the deposit stands on the books of said bank * * *.'
The trial court in rendering judgment against the bank agreed with the contention of the trustee that this statutory provision had no application to the admitted facts of this case. The bank's sole assignment of error is that the trial court erred in entering such judgment and denying its motion for a new...
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