First State Trust & Sav. Bank of Springfield v. Therrell
| Decision Date | 08 January 1932 |
| Court | Florida Supreme Court |
| Parties | FIRST STATE TRUST & SAVINGS BANK OF SPRINGFIELD v. THERRELL et al. |
Separate suits by the First State Trust & Savings Bank of Springfield as executor and trustee of the estate of D. M. Ottis deceased, by J. B. Moos, by Mable Salisbury, by Jennie Ullendorff (sometimes known as Jennie Ullendorff Gossett), a feme sole; and by the City Trust Company, as administrator cum testamento annexo de bonis non of the estate of Alma Larsen, deceased, and for the use and benefit of all estates similarly situated and of like nature, against J. H Therrell, as successor to the Guardian Trust Company, as liquidator of the Biscayne Trust Company. The five cases were consolidated by order pursuant to consent of counsel. From the decree rendered, the complainant first named appeals.
Reversed and cause remanded. Appeal from Circuit Court, Dade County; Uly O. Thompson, judge.
Wilder & Jacobsen, of Miami, for appellant.
Mitchell D. Price and Charles W. Zaring, S. J. Barco, Price, Price & Hancock, and Hudson & Cason, all of Miami, for appellees.
Kurtz & Reed, of Miami, as amici curiae.
This appeal is from a final decree in five cases which were consolidated by order of the chancellor on consent of counsel. The cases consolidated were styled as follows:
(2) J. B. Moos, Complainant, v. The Guardian Trust Company, etc., Defendant. Number 31427-B.
(3) Mable Salisbury, Complainant, v. The Guardian Trust Company, etc., Defendant. Number 31535-B.
(4) Jennie Ullendorff (sometimes known as Jennie Ullendorff Gossett), a Feme Sole, Complainant, v. The Guardian Trust Company, etc., Defendant. Number 31459-B.
(5) The City Trust Company, a Florida Corporation, as Administrator Cum Testamento Annexo De Bonis Non, of the Estate of Alma Larsen, deceased, and for the Use and Benefit of all Estates Similarly Situated and of Like Nature, Complainant, v. The Guardian Trust Company, etc., Defendant. Number 31467-B.
It appears that all these cases grew out of the failure of the Biscayne Trust Company, which closed its doors June 11, 1930, that the Guardian Trust Company was appointed Liquidator for the Biscayne Trust Company, and that J. H. Therrell, the appellee, was later appointed successor to the Guardian Trust Company.
In case No. 31423-B, complainant, First Trust & Savings Bank of Springfield, executor and trustee for the estate of D. M. Ottis, seeks to impress a preferred claim on all the assets of Biscayne Trust Company in the hands of the appellee, as trustee, because of the fact that on August 28, 1929, $2,000 was deposited with Biscayne Trust Company by said D. M. Ottis to be held by it in escrow until the title to a certain parcel of land was made good and marketable. The title to said land was not made good prior to the closing of Biscayne Trust Company, though it still held said deposit for that specific purpose, so First Trust & Savings Bank of Springfield, as trustee for the estate of D. M. Ottis, is attempting to enforce payment of said moneys in full from funds in the hands of J. H. Therrell as liquidator.
In case No. 31427-B, complainant, J. B. Moos, seeks to impress a preferred claim on all the assets of Biscayne Trust Company in the hands of appellee as trustee because of the fact that on or about June 15, 1926, Robert Y. Brand and Edith M. Brand, his wife, executed and delivered to Biscayne Trust Company, as trustee, a deed of trust or mortgage to secure a certain gold note in the sum of $17,000, that J. B. Moos became, and at the time Biscayne Trust Company closed its doors was, the owner of said gold note, on which at said time Biscayne Trust Company had collected and held the sum of $2,775.06, that said sum so held should have been paid over by Biscayne Trust Company to J. B. Moos prior to the closing of its doors, but, having failed in this, J. B. Moos is attempting to enforce payment of said sum in full from funds in the hands of J. H. Therrell as liquidator.
In case No. 31459-B, Jennie Ullendorff seeks to impress a preferred claim on all the assets of Biscayne Trust Company in the hands of appellee, as trustee, because of a trust agreement executed January 28, 1928, in which she conveyed to Biscayne Trust Company, as trustee, personal property aggregating $50,100 in value, together with other rights which were not realized prior to the date the Biscayne Trust Company closed its doors. Under this trust agreement Biscayne Trust Company was authorized to receive, hold, manage, control, collect, sue for, sell, transfer, and deliver the securities or cash comprising said fund, and to invest and reinvest the same. The said trust agreement was designated as 'The Jennie Ullendorff Trust,' and at the time the Biscayne Trust Company closed its doors it held the sum $5,753.73 belonging to said trust account which it had wrongfully mingled with its own funds, and so Jennie Ullendorff is attempting to enforce payment of said claim in full from funds in the hands of J. H. Therrell as liquidator.
In case No. 31467-B, City Trust Company, as administrator cum testamento annexo de bonis non (that which is granted when an executor dies leaving part of the estate unadministered) of the estate of Alma Larsen, deceased, seeks to impress a preferred claim on all the assets of Biscayne Trust Company in the hands of appellee, as trustee, because it, Biscayne Trust Company, was appointed executor of her estate under her (Alma Larsen's) last will and testament; that it qualified as such executor, and prior to the date Biscayne Trust Company closed its doors it collected cash and personal property belonging to said estate in the sum of $23,685.79, which it held at the time it closed its doors; that, after the failure of Biscayne Trust Company, the City Trust Company was appointed administrator cum testamento annexo de bonis non of said estate of Alma Larsen, and, having been thus named and designated the City Trust Company, as administrator is entitled to an accounting against Biscayne Trust Company, and is attempting to enforce payment of said claim in full from funds in the hands of J. H. Therrell as liquidator.
In case No. 31535-B, complainant, Mable Salisbury, seeks an accounting to determine the rights of the several creditors and the several classes of creditors that may have claims against Biscayne Trust Company and to enjoin it from allowing and paying out of its assets, other than assets pledged to secure trust deposits, any preferential claims in prejudice of the rights of complainant and others in like situation. At the time Biscayne Trust Company closed its doors, Mable Salisbury was one of its general depositors, and had on deposit with it the sum of $1,476.07. The fact of the deposit gave the Biscayne Trust Company power to invest the funds, created the relation of debtor and creditor, made the complainant a general depositor, and made the funds deposited subject to withdrawal at any time under the rules of the bank or trust company. In this case the relation of complainant and defendant was clearly that of debtor and creditor, while in the other four cases the relation of complainant and defendant was that of trustee and cestui que trust.
The answer of the defendant in the cases consolidated shows that there is no material difference between the parties to any of them as to the facts, that at the time Biscayne Trust Company closed its doors it had received trust funds and was indebted to cestui que trustents for them a sum aggregating more than $800,000; and that of these funds it had power to invest and reinvest over $100,000, while as to more than $700,000 it was required to hold in trust for specific purposes and had no power to invest.
The answer and the testimony further show that the total cash assets of Biscayne Trust Company, at the time it closed its doors, amounted to less than $200,000, while the value of its real estate, stocks, bonds, and mortgages would approximate $198,504.29; that the assets in the hands of the liquidator are therefore wholly inadequate to pay the preferred claims; that general depositors could expect nothing; and that preferred creditors or claimants could expect but a small proportion of the amount due them, unless some of them were in position to be given preference over others. The answer admits that all five complainants except Mable Salisbury are preferred creditors; that the account of Mable Salisbury was a savings account on which she sought to establish a preferred claim; that the other four claimants established their right of preference on the basis of trust accounts; that there was a total of over twelve hundred trust and savings accounts held by the Biscayne Trust Company when it closed; and that the right of preference was admitted as to all the trust accounts, but that it was denied as to all the savings accounts.
The chancellor found and decreed that in each case where the Biscayne Trust Company was acting as executor, administrator, guardian, collecting agent, escrow holder, or trustee under a live trust agreement, all moneys coming into its hands came in its capacity as trustee, that the assets in the hands of said trustee were increased by reason of the creation of these trusts, and that each and all of said parties were entitled to a preference in the payment of their claims over general depositors. The final decree classified these trust claimants as follows:
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