Otis v. Gross
| Decision Date | 20 November 1880 |
| Citation | 96 Ill. 612,1880 WL 10152,36 Am.Rep. 157 |
| Parties | LUCIUS B. OTIS.v.JACOB GROSS. |
| Court | Illinois Supreme Court |
OPINION TEXT STARTS HERE
APPEAL from the Appellate Court for the First District;--heard in that court on appeal from the Circuit Court of Cook county; the Hon. WILLIAM H. BARNUM, Judge, presiding.
Mr. J. L. HIGH, for the appellant:
1. Money deposited with a bank on general deposit becomes the funds of the bank, undistinguishable from its general funds, and the relation between the bank and its depositor is merely that of debtor and creditor. Morse on Banking, 30, and cases cited; In re Mutual Building Fund Society, 15 Bank. Reg. 44.
2. Trust funds deposited with a bank, or delivered upon bailment, which are mingled with the general funds of the bank, or other bailee, with no ear mark to distinguish them, can not be recovered in specie upon the insolvency of the bank or bailee. The depositor has no specific remedy against the bankrupt estate, but must come in pari passu with other creditors. Hill on Trustees, 531; Bank of Commerce v. Russell, 2 Dill. 215; In re Janeway, 4 Bank. Reg. 100; In re Coan & Ten Broek Carriage Manufacturing Co. 12 Bank. Reg. 203; In re Mutual Building Fund Society, 15 Bank. Reg. 44.
3. A deposit of court funds in a bank which is made the depositary of the court, the fund going into the general funds of the bank, is only a general deposit and not a bailment. The court becomes a general creditor of the bank, the character of its debt not being different from that of other creditors, but with a summary remedy against the officers of the bank upon their refusal to pay. Upon the failure of the bank and an assignment of its effects, the court can not recover its deposit in specie of the assignee, and is only entitled to a dividend pari passu with other creditors. In re Western Marine and Fire Ins. Co. 38 Ill. 289.
4. The receiver is not the depositary or custodian of the court funds, nor the successor of the bank as such depositary or custodian. He is a receiver in equity, appointed for the benefit of all the creditors, deriving his title from the order of his appointment, his functions being defined by that order and by the practice of courts of equity. Holding the fund in trust for all creditors, payment in full of one creditor at the expense of others would be a fraud which can not be tolerated in equity. Messrs. GARDNER & CHANDLER, for the appellee:
1. A receiver is defined to be an indifferent person between the parties, appointed by the court on behalf of all parties, only to receive the thing or property in litigation pending the suit. Baker et al. v. Backus, Admr. 32 Ill. 95; Coates v. Cunningham, 80 Id. 467.
2. The appointment of a receiver gives no priority or superiority of right to the parties upon whose application it was made. It has no effect to change the title or create any lien upon the property. He is an officer of the court, and acts under its direction and control in disposing of the funds coming to his hands. Ellis v. Boston, etc. Railroad Co. 107 Mass. 1.
3. As a general rule, he is responsible for his official acts only to the court appointing him, and can only be called to account by that court. Conkling v. Butler, 4 Bissell, 22; Henry v. Kaufman, 24 Md. 1.
He can not be sued in his official capacity, except by leave of the court appointing him. High on Receivers, sec. 254; Wiswall v. Sampson, 14 How. 65; Thompson v. Scott, 4 Dill. 508.
It appears that the circuit court of Cook county, by an order entered on its records, designated the State Savings Institution of Chicago as the depositary of moneys in the hands of the officers of the court and under its control. By resolution the bank accepted the trust. Subsequently, the institution failed, and its officers fled to avoid criminal prosecution; and the institution being insolvent to the amount of $1,800,000 above its assets, a receiver was appointed to take charge of the affairs and assets of the bank.
The clerk of the circuit court, Gross, opened an account with the bank, and made deposits of the funds under the control of the court, as occasion required, and funds were drawn out when needed to pay litigants and as directed by the court. When the bank failed, there was deposited and not checked out of the bank the sum of $2597.43, deposited by the clerk of the court.
A dividend of ten per cent on the debts against the bank had been declared, which would probably nearly exhaust the assets, which the clerk refused to receive, but demanded the full amount, insisting the deposit was a special fund, and that it was a special deposit. It is admitted that the corporation was authorized to do, and did a commercial and savings deposit business; that when this fund was deposited in the bank, it was made, entered, numbered and kept on the books of the institution in like manner as all other savings deposits, except as to payment of interest; that a deposit book was given to, and accepted by the clerk, in which these deposits were entered; that it was the same in character and form as the deposit books given to other depositors, and the funds deposited by the clerk were entered in his book in like manner as in all other cases, and the money thus received was mingled with the general funds received and held by the institution, and was in no manner ever kept separate or apart from the general funds or distinguished therefrom. The order of the court did not require, nor did the resolution of the directors agree that it should be kept separate.
The clerk filed a petition against the receiver to have this declared a trust fund, and to have the full amount of the deposit paid to him. And on the facts here stated the circuit court made an order that the receiver should so pay it. He thereupon perfected an appeal to the Appellate Court for the First District, where, on a hearing, the order of the circuit court was affirmed, and he brings the record to this court and urges a reversal.
From the facts in this case, it is manifest that this was not a special deposit or a mere bailment. The money, when deposited, was commingled with the...
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