Mountaineer Engineering Co. v. Bossart

• Decision Date: 14 February 1950
• Docket Number: No. 10173,10173
• Citation: 57 S.E.2d 633,133 W.Va. 668
• Court: West Virginia Supreme Court
• Parties: , 50-1 USTC P 9272, 42 A.F.T.R. 191 MOUNTAINEER ENGINEERING CO. v. BOSSART et al.

Page 633

57 S.E.2d 633

133 W.Va. 668, 50-1 USTC P 9272, 42

A.F.T.R. 191

MOUNTAINEER ENGINEERING CO. v. BOSSART et al.

No. 10173.

Supreme Court of Appeals of West Virginia.

Submitted Jan. 31, 1950.

Decided Feb. 14, 1950.

Syllabus by the Court

1. A check, drawn on a general bank account, though delivered to the payee, does not of itself constitute an equitable assignment.

2. A trust arising by virtue of Title 26, Section 3661, United States Code, [26 U.S.C.A. § 3661] cannot be enforced unless the funds can be traced and identified.

McCamic & Clarke, Wheeling, Charles McCamic, Wheeling, Kountz, Fry, Staley & Meyer, Pittsburgh, Pa., for appellant.

Theron L. Caudle, Asst. Atty. General of the United States, Ellis N. Slack, Special Asst. to the Atty. Gen., Frank K. Foster, Special Asst. to the Atty. Gen., C. Lee Spillers, U. S. Atty., Clarksburg, Howard Caplan, Asst. U. S. Atty., Clarksburg, for appellee, United States of America.

GIVEN, Judge.

In August, 1947, the appellant, Mountaineer Engineering Company, a corporation obtained a judgment against Charles C. Bossart for $4,786.55 in a United States District Court in Pennsylvania. The plaintiff filed its bill of complaint in the Circuit Court of Monongalia County, setting up its foreign judgment and praying a judgment thereon in that court against Charles C. Bossart. An affidavit having been filed in the cause stating the defendant, Charles C. Bossart, to be a non-resident of West Virginia, an attachment was issued and levied pursuant to the provisions of Article 7, Chapter 38, Code, 1931, as amended, upon the funds of the defendant Charles C. Bossart on deposit in the First National Bank of Morgantown. This levy was made at four o'clock in the afternoon of February 3, 1948. A second attachment was levied on the 5th day of February, 1948. At the time of the levy of the attachments there was on deposit in said bank, in the name of 'Charles Bossart', $234.96 and in the names of 'Charles C. Bossart or Lois M. Bossart', $2,146.22. Bossart does not contest the validity of the attachment. On January 30, 1948, Bossart mailed to the Federal Collector of Internal Revenue two tax returns indicating a tax liability of $282.81 for federal insurance contributions tax, and liability of $1.624.66 federal income tax. On the same day Bossart executed two checks, drawn on said bank, covering the respective tax returns, and mailed them to the Collector with the returns. On the following day there was deposited in the aforesaid bank the sum of $1,907.47, the amount of the two checks. The checks were later presented for payment and payment by the bank refused because of the previously levied attachment. The United States intervened in the suit claiming prior rights to the attached funds on the theory that the checks constituted an equitable assignment pro tanto of the funds attached. The lower court overruled a demurrer to the intervening petition and, the cause having been submitted upon the pleadings by agreement, held that the United States acquired prior right to the funds attached to the extent of the amount of the two checks, by virtue of an equitable assignment.

The controlling question in this case is whether the checks constituted an equitable assignment pro tanto of the funds attached. West Virginia Code, 46-16-6, is: 'A check of itself does not operate as an assignment of any part of the funds to the credit of the drawer with the bank, and the bank is not liable to the holder, unless and until it accepts or certifies the check.' This section, taken from the uniform negotiable instruments law, deals primarily with liability as between the drawer of a check and the bank upon which the check is drawn. The statute does not deal directly with liability as between the drawer and drawee or where third parties may assert claims. It does say, however, that a mere check, of itself, does not necessarily create an equitable assignment. In the case of Central Trust Company, Receiver, etc. v. Bank of Mullens et al., 108 W.Va. 12, 150 S.E. 137, this Court held that a check, under the circumstances of that case, constituted an equitable assignment of the fund against which it was drawn. In that case there existed...