Maryland Casualty Co. v. Williams
| Decision Date | 24 January 1935 |
| Docket Number | 5 Div. 193. |
| Citation | 159 So. 242,229 Ala. 663 |
| Parties | MARYLAND CASUALTY CO. v. WILLIAMS, Superintendent of Banks. |
| Court | Alabama Supreme Court |
Rehearing Denied Feb. 21, 1935.
Appeal from Circuit Court, Macon County; W. B. Bowling, Judge.
Suit by the Maryland Casualty Company against J. H. Williams, as Superintendent of Banks, liquidating the Bank of Tuskegee. From a decree sustaining demurrers to the bill, complainant appeals.
Affirmed.
Wm. M Russell, of Tuskegee, for appellant.
Powell & Powell, of Tuskegee, for appellee.
The purpose of the bill is to follow alleged trust funds and reclaim them for the benefit of the party alleged to be equitably entitled thereto. The appeal is from a decree sustaining demurrers to the bill as amended.
The controlling facts averred in the bill are briefly these:
In September, 1931, the Bank of Tuskegee, a state banking corporation, having acquired charter power to operate a trust department, act as guardian, etc., under Code, § 6388, was appointed guardian of the estate of Mamie Donald and others minors. The Maryland Casualty Company became surety on the guardian's bond. In December, following such appointment said bank, as guardian, received the sum of $1,794.82, funds of the wards' estate, and on December 6, 1932, the further sum of $4,917.36. On January 2, 1933, some 26 days after the funds last mentioned were received, the bank failed, and was taken over by the superintendent of banks for liquidation.
A new guardian was then appointed, and the superintendent of banks proceeded to file accounts and make final settlement of the bank's guardianship. After deducting sundry items of disbursement for the benefit of the wards, and expenses of guardianship, a decree was entered in favor of the succeeding guardian for a balance of $5,862.48.
The Maryland Casualty Company, as surety on the guardian's bond, paid this decree and files this bill, claiming a right of subrogation to all the right and title of the wards in such funds, under Code, § 9567, and praying that the bank assets in the hands of the superintendent of banks be charged with a trust to the amount of the sum so paid, and given preference over all other creditors of the bank.
The averments on which such equity is asserted are, in substance, as follows:
That the wards' funds when received by said guardian were deposited in the general funds of said bank, were mixed and commingled with the moneys of the bank, and so remained until taken over by the superintendent of banks; that such funds were received for use and benefit of the wards; that the action of said bank in appropriating the same to its own use was in violation of its trust, and the assets of the bank were augmented thereby; that after having commingled the moneys of the wards with its general funds and assets, the bank did make divers and sundry loans and investments from the funds so commingled, wrongfully taking title to such loans and investment in the name of the bank; that such loans and investments were taken over by and are now in the possession of the superintendent of banks; that at the time the bank closed, it had $8,300 cash on hand, which went into the possession of the superintendent. By amendment it is averred that the moneys so received as guardian were carried on the books of the bank as "Trust Account"; that, knowing the total amount of cash on hand was below the amounts credited to "Trust Account" at the time these funds were received, they were accepted and placed in the general funds of the bank in violation of a duty to invest the same.
The bill prays for preferential payment out of the cash taken over by the superintendent of banks; and, if insufficient, that a preferred lien or trust be decreed on all the assets, and payment be made in preference to other creditors of the bank.
Other questions aside, the bill does not make a case entitling either the wards, or any one succeeding to their equity, to a preference over other creditors to the funds of the insolvent bank in the hands of the superintendent of banks.
The rule of long standing in this state has been reaffirmed and applied in recent cases in this court. Hanover Nat....
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