McFarlan v. Fowler Bank City Trust Co.

• Decision Date: 07 February 1938
• Docket Number: 27006.
• Citation: 12 N.E.2d 752,214 Ind. 10
• Parties: McFARLAN v. FOWLER BANK CITY TRUST CO. et al.
• Court: Indiana Supreme Court

12 N.E.2d 752

214 Ind. 10

McFARLAN v. FOWLER BANK CITY TRUST CO. et al.

No. 27006.

Supreme Court of Indiana

February 7, 1938

Appeal from Circuit Court, Tippecanoe County; Arthur D. Cunningham judge.

Edgar D. Randolph, of La Fayette, Leonard H Freiberg, of Cincinnati, and John B. Randolph, of La Fayette for appellant.

Harry P. Schultz and Michael T. Ricks, both of La Fayette, for appellee.

SHAKE Judge.

On May 11, 1933, appellant and two others borrowed $10,000 from a Cincinnati bank. The proceeds of the loan, less the discount were placed with Fowler Bank City Trust Company, of Lafayette, Ind., subject to withdrawal on the joint order of the appellant and his two associates. Appellant claims that thereafter the Lafayette bank permitted the withdrawal of the funds to his loss, without his knowledge, consent, or direction. He made claim upon the bank for redress and was advised by its officers on December 9, 1933, that the matter was receiving the consideration of its attorneys. Subsequent thereto, the appellant made a trip to Lafayette and had a conference with the president of the bank, who asked for further time to investigate the complaint. The date of this visit is not disclosed. On January 2, 1934, the Fowler Bank City Trust Company was closed by order of the department of financial institutions of the state of Indiana, and the appellee is the liquidating agent.

It does not appear from the record that the appellant took any further steps to present his claim until June 12, 1935, when he filed and presented a petition to the Tippecanoe circuit court asking for an extension of time to and including September 24, 1935, to file his claim against the trust. The petition recited the above facts and further stated that the appellant was a nonresident of the state of Indiana and had no knowledge or information of the condition of the Fowler Bank City Trust Company or that it had passed under the control of the department of financial institutions until after the time regularly fixed for the filing of claims had expired. The circuit court sustained the petition and granted the relief prayed for. On September 24th the appellant filed his verified claim in two paragraphs. By the first paragraph he sought to establish a preference and by the second a general claim against the trust.

Thereafter, on November 27, 1935, the appellee, as liquidating agent, filed in the circuit court below his verified petition to set aside and annul the order extending the time for the filing of the appellant's claim, and to dismiss the same. In appellees' petition it is disclosed that the Lafayette bank had been in liquidation since June 2, 1934; that the department of financial institutions had given notice by publication on June 15, 22, and 29, 1934, in a newspaper of general circulation in the county, fixing August 14, 1934, as the last date when creditors and others might file their claims with the court in the administration and settlement of said trust; that appellant did not file or present his claim, or ask for an extension within the time fixed, and that the order of extension entered on June 12, 1934, was made by the court without notice to or knowledge of the appellees. The court heard oral arguments on the motion to set aside the order extending time and to dismiss, and thereafter sustained the motion and dismissed appellant's claim. The appellant excepted, and prosecutes this appeal.

The statutory provisions with respect to notice to creditors of closed banks in this state, the time within which claim shall be filed, and the granting of extensions for that purpose are all contained in section 57, chapter 40, Acts of 1933, Burns' Ann.St.1933, § 18-317, section 7779, Baldwin's Ind.St.1934, which has been amended by section 11, chapter 5, Acts of 1935, Burns' Ann.St. § 18-317. We quote so much of section 57 as bears upon the question presented by this appeal:

'Upon the filing of the statement of liabilities with the clerk the department shall also give notice, by publication, once each week for three [3] successive weeks, in some newspaper of general circulation, printed or circulated in the county where the liquidation proceedings are pending, that the statement of liabilities and the recommendations as to the allowance or disallowance of claims have been filed with the clerk of the court, and fixing a date, not less than sixty [60] days after the date of such notice, within which any creditors, shareholders or other persons interested, may appear and, by petition filed in the court, assert any claims or priorities thereon or object to the allowances or disallowances recommended by the department. Within the time fixed by the notice, any creditor, shareholder or other person interested, may, by verified petition filed in the court, assert his claim, or any priority thereon, or oppose the allowance of any claims appearing upon the statement, or asserted by any other creditor, and the department, or any creditor, shareholder or other person interested, within such time as may be fixed by the court, may oppose the allowance, with or without priority, of the claims asserted by any creditor or creditors. The court may, upon good cause shown, extend the time for the filing of such statement of liabilities by the department, and the...