Phair v. Federal Deposit Ins. Corporation
Citation | 74 F. Supp. 693 |
Decision Date | 24 October 1947 |
Docket Number | Civil No. 1105. |
Parties | PHAIR et al. v. FEDERAL DEPOSIT INS. CORPORATION. |
Court | U.S. District Court — District of New Jersey |
Collins & Corbin, of Jersey City, N. J., for plaintiffs.
Milton, McNulty & Augelli, of Jersey City, N. J., for defendant.
SMITH, Distict Judge.
This is a civil action under the Banking Act of 1935 as amended, 12 U.S.C.A. § 264. The complaint consists of five counts in each of which the plaintiffs therein named assert a claim for money allegedly due them under the Act on certain insured deposits. The defendant in its answer denies liability, and alleges by way of affirmative defense full payment of the money due.
Findings of Fact.
I. The decedent, William F. Melosh, died testate on October 18, 1937, survived by his widow Louise W. Melosh and his three children, Rudolph C. Melosh, Margaret M. Rusch, and Elizabeth M. Phair (identified in the will as Elsie M. Phair). The decedent by his last will and testament, admitted to probate on November 1, 1937, appointed the said Louise W. Melosh and Henry J. Melosh executrix and executor of his estate, (hereinafter identified as executors) and trustees of his residuary estate for the uses and purposes therein set forth.
II. The pertinent provisions of the will follow:
III. Thereafter, on November 8, 1937, the said executors, since deceased, opened two accounts with the New Jersey Title Guarantee and Trust Company (hereinafter identified as the Bank), a member of the Federal Reserve System and an insured bank within the meaning of the Banking Act of 1935, as amended, 12 U.S.C.A. § 264. At the request of the executors one account was designated "Estate of William F. Melosh — Capital Account" and the other "Estate of William F. Melosh." The signature cards, prepared by a representative of the Bank, were signed by each of the executors as "Executor," and not as "Trustee."
IV. It appears from the evidence that during the period of their administration the executors segregated the funds of the general estate; the funds which they regarded as corpus, as distinguished from income, were deposited in the account designated "Estate of William F. Melosh — Capital Account," and the funds which they regarded as income were deposited in the account designated "Estate of William F. Melosh." This segregation of funds was nothing more than an accounting practice adopted by the executors and did not change the character of the deposits.
V. The Bank was closed by the action of its Board of Directors on February 14, 1939, and the Commissioner of Banking and Insurance, pursuant to the laws of the State of New Jersey, took possession of its property and business and proceeded to liquidate its affairs.
VI. There was then on deposit with the Bank in each of the accounts a sum in excess of $5000: in the account designated "Estate of William F. Melosh — Capital Account" the sum of $7,141.14, and in the account designated "Estate of William F. Melosh" the sum of $7,214.54.
VII. The executors filed with the Bank two separate proofs of claims, one based upon the account designated "Estate of William F. Melosh — Capital Account," and the other based upon the account designated "Estate of William F. Melosh," in each of which they asserted a claim to the full amount on deposit. The executors filed with the Bank two additional proofs of claims based upon the same accounts in each of which they asserted a claim as trustees of the residuary estate to the full amount on deposit in the respective accounts. These claims were rejected.
VIII. There was also filed with the Bank a joint proof of claim in which Louise W. Melosh, a legatee under the will of the decedent, and Rudolph C. Melosh, Margaret M. Rusch and Elizabeth M. Phair, beneficiaries of the trust, asserted a claim to the full amount on deposit in the account designated "Estate of William F. Melosh," as the beneficial owners thereof. This claim was likewise rejected.
IX. Thereafter the Federal Deposit and Insurance Corporation (hereinafter identified as the Corporation) paid to the Estate of William F. Melosh the sum of $5000 in full satisfaction of its maximum liability under the Act, and particularly Section 12B (c) (12) (13) and (l) (1), 12 U.S.C.A. § 264(c) (12) (13) and (l) (1), but without waiving any defenses to a claim for a greater sum. The executors accepted this payment, but without waiving their claim to a greater sum.
X. Prior to February 14, 1939, when the bank closed, all debts of the estate had been paid except the following: income taxes due the State of New York, which were paid on August 27, 1939; inheritance taxes due the United States of America, which were paid in installments on February 16 and April 3, 1940; the claim of Rudolph M. Melosh in an amount in excess of $27,000, subsequently reduced to judgment and paid on March 23, 1940; and the administration expenses. There were, however, several suits affecting the administration of the general estate; these suits were not terminated until after February 14, 1939.1
XI. The general estate still is, and was on February 14, 1939, in the process of administration. The personal estate of the decedent and the exclusive right to possession incident thereto still are, and were on the said date, vested in the executors and their successors for the purposes of administration. The residuary estate, which is still not determined and not distributed, has not passed to the successors of the executors as trustees of the said estate.
XII. The executors, Louise W. Melosh and Henry J. Melosh, died while the present action was pending. Elizabeth M. Phair, administratrix with will annexed, and substituted trustee, was substituted as a party plaintiff upon the death of the former, and Margaret M. Rusch, administratrix with will annexed, and substituted trustee, was substituted as a party plaintiff upon the death of the latter. Margaret M. Rusch as executrix of the last will and testament of Louise W. Melosh, has been substituted as a party plaintiff for her decedent and here prosecutes her decedent's individual claim.
Discussion.
The pertinent provisions of the Act, 12 U.S.C.A. § 264(c) (13), determinative of the ultimate question here raised, reads as follows: ...
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