Fletcher Savings And Trust Company v. American State Bank of Lawrenceburg

• Decision Date: 23 April 1925
• Docket Number: 24,149
• Citation: 147 N.E. 524,196 Ind. 118
• Parties: Fletcher Savings and Trust Company et al. v. American State Bank of Lawrenceburg
• Court: Indiana Supreme Court

147 N.E. 524

196 Ind. 118

Fletcher Savings and Trust Company et al. v. American State Bank of Lawrenceburg

No. 24,149

Supreme Court of Indiana

April 23, 1925

1. TRUSTS.---As against trust funds appropriated by bank in payment of indebtedness of depositor the one who prays for judgment has burden of supporting it.---Where trust funds were deposited by an insolvent in his personal account with a bank, which account was later appropriated by the bank to the payment of insolvent's indebtedness to it, so that none of it came into the hands of a receiver appointed for the insolvent, the rule shifting to the receiver the burden of showing that such funds did not come into his hands is not applicable, but the rule that one who prays for judgment has the burden of proving the facts which will support it is applicable. p. 129.

2 RECEIVERS.---Trust funds coming into receiver's hands not necessarily impressed with trust if obtained by compromise.---The fact that a receiver recovered a substantial sum by way of compromise of a suit against the directors of an insolvent investment company for negligence in permitting misappropriation of its funds does not sufficiently show that funds in the possession of the insolvent impressed with a trust came into the receiver's hands, where such litigation was settled by compromise for an amount less than the aggregate of all the choses of action sued on. p. 130.

3. APPEAL.---Inferences not indulged in favor of special finding.---In reviewing a ruling based on a special finding on appeal, inferences in favor of the finding will not be indulged. p. 130.

4. RECEIVERS.---Burden of showing a constructive trust in funds in receiver's hands is upon cestui que trust.---In order to create a constructive trust in funds in the hands of a receiver, the funds must be traced into his possession and if commingled with other assets of the estate, it must be shown that they were received by him in such form as to be impressed with such trust at the time they were transferred from the constructive trustee to the receiver, and the burden of showing such a condition is on the cestui que trust or the ones who seek such priority. p. 130.

5. TRIAL.---Motion to modify by striking out part of special finding not authorized, but remedy is by motion for new trial.---A motion to modify a special finding by striking out part thereof is not authorized by any rule of practice, but if the facts found are not supported by the evidence, the proper remedy is a motion for a new trial on the ground that the facts found are not sustained by sufficient evidence. p 132.

6. EVIDENCE.---Supreme Court will take judicial knowledge of existence of other courts and their jurisdiction.---The Supreme Court will take judicial knowledge of the fact that there is in Marion county a superior court of co-ordinate jurisdiction with the circuit court and having jurisdiction of actions on choses of action and can know, therefore, that an action by a receiver appointed by the circuit court against defendants who were not parties to the action in which the receiver was appointed to recover on choses of action belonging to the estate was separate and distinct from the proceeding in which the receiver was appointed. p. 133.

7. EVIDENCE.---A court appointing a receiver will not take judicial knowledge of separate action by receiver in same court.---A court appointing a receiver would not take judicial knowledge of an action by the receiver in the same court against the directors of the corporation for which the receiver was appointed, as the action was a separate and distinct proceeding from that of the receivership and the parties to the two proceedings were not the same. p. 133.

8. EVIDENCE.---Judicial knowledge of facts capable of proof does not always dispense with proof.---Generally, judicial knowledge of a fact dispenses with its proof, but the rule does not extend to all matters of fact, for, while a court may take judicial knowledge of all matters of fact, it is not bound to do so, and, in fact, should exercise extreme caution in taking judicial knowledge of facts susceptible of proof, but should require the introduction of evidence in support of same. p. 134.

9. EVIDENCE.---Court will not take judicial knowledge of another proceeding in same court.---A procedure, suit or action in same court relied on by a party seeking to sustain a finding in his favor, though proper matter of evidence to be considered in making a finding, is not subject to judicial knowledge without formal introduction in evidence. p. 135.

10. EVIDENCE.---Court will not as a rule take judicial knowledge of another former action in same court.---As a general rule, a trial court will not take judicial knowledge of another action or proceeding which has been prosecuted and tried before it. p. 135.

11. EVIDENCE.---Court will not take judicial knowledge of another action or proceeding in same court after refusing proof thereof.---A trial court cannot refuse to receive proof of the records in another action before it and then take judicial knowledge of the fact that certain matters were adjudicated in such case. p. 136.

12. APPEAL.---Exclusion of evidence in receivership proceeding considered and held harmless.---In a proceeding in a receiver- ship to determine the priority of appellee's claim, the exclusion of offered evidence to show that the only cash that came into the receiver's hands was exhausted in the payment of other creditors whose claims had been decreed priority and paid by order of the court did not harm the appellant where the appellee was not claiming priority from that fund. p. 136.

From Marion Circuit Court (29,530); Harry O. Chamberlain, Judge.

Proceeding by the American State Bank of Lawrenceburg, Indiana, against the Fletcher Savings and Trust Company and another trust company as receivers of the German Investment and Securities Company, to have the priority of its claim determined. From an interlocutory order allowing such priority, the receivers appeal.

Reversed.

Samuel D. Miller, Frank C. Dailey, William H. Thompson, Albert L. Rabb and Frank B. Ross, for appellant.

Estel G. Bielby, James M. Ogden and H. Nathan Swaim, for appellee.

Travis C. J. Ewbank, J., not participating.

OPINION

Travis, C. J.

This is an appeal from an interlocutory order, which allowed the claim filed by appellee with appellants as receivers of the German Investment and Securities Company, for certain moneys belonging to appellee and which were misappropriated by said German Investment and Securities Company, with priority of payment over the claims of the general creditors of the German Investment and Securities Company.

For many years prior to the date of the appointment of these receivers, to wit: July 15, 1918, the German Investment and Securities Company was engaged in the lending of money upon, and acting as trustee under, mortgages of real estate, the selling of mortgage bonds and notes, and collecting and remitting sums of interest and the principal thereon. In transacting such business, the German Investment and Securities Company deposited moneys received by it as trustee or otherwise in some one or more bank accounts maintained by it in the Continental National Bank, the Fletcher American National Bank, the Indiana National Bank, and the Union Trust Company, all of Indianapolis, Indiana. All moneys paid out by said company, either in payment of its debts, or to augment its assets, or otherwise, were paid out by means of checks drawn upon such accounts.

On September 10, 1915, Karl and Magdelena Kramer made, executed, and delivered one certain real estate mortgage bond, numbered 583, to the German Investment and Securities Company, wherein they promised to pay the German Investment and Securities Company, trustee, or bearer, the principal sum of $ 1,000, due five years after date, with interest from date at six per cent. per annum, payable semi-annually, negotiable and payable at the Fletcher National Bank of Indianapolis, Indiana. To secure the payment of this bond, the makers thereof made, executed, and delivered to the German Investment and Securities Company, trustee, their certain mortgage of certain real estate owned by them, which was duly recorded in the office of the recorder of Marion county, Indiana.

On March 11, 1916, Irene Bowman Ardern made, executed, and delivered one certain real estate mortgage bond, numbered 627, to the German Investment and Securities Company, wherein she promised to pay the German Investment and Securities Company, trustee, or bearer, the principal sum of $ 1,000, due five years after date, with interest from date at six per cent. per annum, payable semi-annually, negotiable and payable at the Fletcher National Bank of Indianapolis, Indiana. To secure the payment of this bond, the maker thereof made, executed and delivered to the German Investment and Securities Company, trustee, her certain mortgage of certain real estate owned by her and Edward I. Ardern, which was duly recorded in the office of the recorder of Marion county, Indiana.

On October 2, 1916, Dora Meyer Kottlowski made, executed and delivered two certain real estate mortgage bonds, numbered 682 and 683, to the German Investment and Securities Company wherein she promised to pay the German Investment and Securities Company, trustee, or bearer, the principal sum of $ 1,000 on each of said bonds, due five years after date, with interest from date at six per cent. per annum, payable semiannually, negotiable and payable at the Fletcher National Bank of Indianapolis, Indiana. To secure the payment of these bonds, she, with her husband, Ernest A. Kottlowski, made, executed and delivered to the German Investment and Securities Company, trustee,...