Nixon State Bank v. First State Bank of Bridgeport

• Citation: 180 Ala. 291,60 So. 868
• Parties: NIXON STATE BANK v. FIRST STATE BANK OF BRIDGEPORT.
• Decision Date: 21 November 1912
• Court: Supreme Court of Alabama

60 So. 868

180 Ala. 291

NIXON STATE BANK v. FIRST STATE BANK OF BRIDGEPORT.

Supreme Court of Alabama

November 21, 1912

Rehearing Denied Jan. 23, 1913.

Appeal from Chancery Court, Jackson County; W. H. Simpson Chancellor.

Proceedings by the Attorney General against the First State Bank of Bridgeport; an insolvent, in which the Nixon State Bank intervened. From a decree granting insufficient relief to the Nixon State Bank, it appeals. Affirmed.

Lawrence E. Brown, of Scottsboro, for appellant.

Virgil Bouldin, of Scottsboro, for appellee.

McCLELLAN J.

The main cause out of which the particular controversy arises is the administration, invoked by the Attorney General under Code, § 3560, of the assets and affairs of an insolvent state bank, viz., the First State Bank of Bridgeport, Ala. On May 1, 1910, the Nixon State Bank of Nixon, Tex., appellant sent, by mail, to the said First State Bank, "for collection," a purchase-money note for $820 owned by it given by T. C. Talley and wife to John F. Cooper, falling due May 11, 1910. On the day of its maturity Talley gave the First State Bank a check for $820, drawn by Blake on Wrenne & Co., bankers of Nashville, Tenn., payable to Talley; and therefor the First State Bank surrendered the note to Talley, marking it paid. On May 13, 1910, the First State Bank sent said Wrenne & Co. check, with others, making the aggregate of that remittance $1,012.73, to the First National Bank of Nashville, its correspondent, for collection and credit. The Wrenne & Co. check was collected by the First National Bank of Nashville, and that, with the other items referred to, was placed to the credit of the First State Bank on May 14, 1910. The State Treasurer, on, to wit, May 27, 1910, reported to the Governor that the said First State Bank was insolvent. When the receiver took charge of the assets of the insolvent bank, he received from the First National Bank of Nashville $1,193.61. The Nixon State Bank, owner of the Talley note, has not received or been paid the sum of its note, or any part thereof, so collected by the First State Bank. From May 13th to May 21st, both inclusive, the First State Bank remitted to the First National Bank of Nashville collections aggregating, daily, $1,012.73, $323.16, $763.95, $363.89, $163.75, $1,066.77, $259.37, and $114.60. The daily balances with the First National Bank to the credit of the First State Bank, from May 14th to May 28th, both inclusive, varied between $375.40, the lowest, and $1,653.64, the highest; the balance on the last day being the said sum paid over by the First National to the receiver of the First State Bank.

The Nixon State Bank intervened, by petition, in the proceeding, asserting that the amount of the Talley note passing, as stated, to the credit of the First State Bank with the First National Bank served to increase the resources or assets of the First State Bank delivered to the receiver, and was a trust fund equity, out of which the petitioning bank should be preferred and the liability of the First State Bank to it satisfied.

The chancellor ruled as follows: "That the claim of the intervening petitioner * * * be allowed as a common claim against re...