Robinson v. EXCHANGE NAT. BANK OF TULSA, OKL., 1287.

• Citation: 28 F. Supp. 244
• Decision Date: 30 June 1939
• Docket Number: No. 1287.,1287.
• Parties: ROBINSON v. EXCHANGE NAT. BANK OF TULSA, OKL., et al.
• Court: U.S. District Court — Northern District of Oklahoma

28 F. Supp. 244

ROBINSON v. EXCHANGE NAT. BANK OF TULSA, OKL., et al.

No. 1287.

District Court, N. D. Oklahoma.

June 30, 1939.

S. C. Edmister, John Ladner, and Carl H. Livingston, all of Tulsa, Okl., for plaintiff.

Joseph L. Hull and James E. Bush, both of Tulsa, Okl., for defendants National Bank of Tulsa and Exchange Nat. Bank of Tulsa.

Settle & Clammer, of Tulsa, Okl., for defendant R. M. Moody.

FRANKLIN E. KENNAMER, District Judge.

James B. Robinson was indebted to the National Bank of Tulsa in the sum of $1,820.44, and to the Exchange National Bank of Tulsa for $3,022.16, represented by notes dated October 23, 1935. He was also indebted to the defendant R. M. Moody in the sum of $1,000, evidenced by a note dated October 23, 1935, for money borrowed. The notes held by the banks were collateral form notes, providing in substance that certain assets were pledged to secure the payment of the note or any renewal or extension thereof, and of any and all other indebtedness to the bank. During the period from February 1, 1932, to April 24, 1933, Robinson became indebted to the Exchange National Bank of Tulsa for rent for office space in the sum of $1,332. On October 25, 1933, the Exchange National Bank of Tulsa ceased to do an active banking business and went into voluntary liquidation, and then transferred and pledged certain of its remaining assets to the National Bank of Tulsa to secure certain obligations given to said bank in consideration of the assumption by the National Bank of Tulsa of the deposit and certain other of its liabilities, and the assets so pledged included the then existing indebtedness of Robinson to the Exchange National Bank of Tulsa. The note given to the National Bank of Tulsa was due 90 days after date, and was secured by a pledge of two insurance policies, each in the sum of $5,000, and executed by Northwestern Mutual Insurance Company, 2½ shares of Wheatley Bros. stock, and 200 shares of Consolidated Oil Corporation stock owned by N. K. Moody, and by 20 shares of Standard Oil Company of Indiana, owned by Jane C. Moody, said parties having loaned the stock to Robinson to pledge as security upon the note. The note given to the Exchange National Bank of Tulsa was secured only by the life insurance policies and the 2½ shares of Wheatley Bros. stock, and subject to the pledge to the National Bank of Tulsa. This note was payable on demand, and its payment was guaranteed by R. M. Moody and W. Albert Cook. The note held by Moody was secured by a junior assignment of the life insurance policies above mentioned. The notes referred to herein held by the banks were renewals of earlier notes. Robinson executed and delivered separate assignments of each of the two life insurance policies as security for his indebtedness to the Exchange National Bank, said assignments having been dated January 26, 1931, and May 15, 1931.

On January 18, 1936, Robinson filed his voluntary petition in bankruptcy in this court, and on the same day was adjudged a bankrupt. He was granted a discharge on April 1, 1936. On February 20, 1936, the Exchange National Bank of Tulsa filed an unsecured claim against Robinson in the bankruptcy proceedings for the sum of $1,332 for office rent, which claim was allowed as an unsecured claim by the Bankruptcy Court. On May 15, 1936, the National Bank of Tulsa filed a claim against the bankrupt in the bankruptcy proceedings, on the note dated October 23, 1935, for $1,820.44, and alleged in the claim that the note was secured by 200 shares of common stock of Consolidated Oil Corporation, the property of Nelson K. Moody; 20 shares of stock of Standard Oil Company of Indiana, owned by Mrs. Jane C. Moody; 2½ shares of the capital stock of Wheatley Bros. and the two assignments of life insurance policies, and alleged that the Wheatley Bros. stock had a value of approximately $246.95, and that the policies of insurance, at that time, had a cash value of approximately $261. It asked that the court allow its claim as a secured claim to the extent of $507.95, and as an unsecured claim in the sum of $1,312.49, together with interest. The note referred to in this claim was renewed by a new note, dated July 21, 1936, after Robinson's discharge in bankruptcy, and the new note recited the same collateral as security.

On May 9, 1936, the Exchange National Bank of Tulsa filed an unsecured claim in the bankruptcy proceedings against Robinson on the promissory note, dated October 23, 1935, for $3,022.16, and stated in the claim that the only securities held were 2½ shares of the capital stock of Wheatley Bros., having a value of approximately $246.95, and the assignment of the two life insurance policies with a value of approximately $261, and that both of said securities were pledged to claimant subject to a prior pledge to the National Bank of Tulsa. It sought to have the claim allowed as unsecured, and it was so allowed by the Bankruptcy Court.

Moody did not file any claim in bankruptcy, but the indebtedness to him was duly scheduled in the bankruptcy proceedings by Robinson upon his schedule of creditors, as a claim secured by the assignment of the life insurance policies.

No dividends were declared paid to any of the un-secured creditors of Robinson in the bankruptcy proceedings, and none of the defendants received any dividends upon any of their claims. No order was made by the Bankruptcy Court with respect to the life insurance policies, the assignments thereof, or the cash surrender value, and no action was taken by the trustee in bankruptcy with respect to the collateral. The assignments of the life insurance policies were filed with the Northwestern Mutual Life Insurance Company shortly after their respective dates, but the assignments were not endorsed upon the policies, said policies being in possession of the company which issued them, to secure an indebtedness of the bankrupt to the company.

Robinson died on February 22, 1937, leaving a will which was duly admitted to probate on March 15, 1937, in the County Court of Tulsa County, Oklahoma. The plaintiff, widow of Robinson, was appointed administratrix with will annexed, and was residuary legatee. On March 29, 1937, plaintiff, as administratrix of her deceased husband's estate, signed a letter directing the payment out of the proceeds of a check for $6,371.31, issued by Northwestern Mutual Life Insurance Company, in payment of the sums due under the two policies of life insurance, as follows: Note to National Bank of Tulsa for $1,820.44; note to the Exchange National Bank of Tulsa for $3,022.16, with interest in the amount of $153.99; to the Exchange National Bank for rent, $1,332, and the balance of $42.72 to be paid over to plaintiff as administratrix, and that upon the payment of the notes, the stock of Jane C. Moody and N. K. Moody were to be returned to them. The check of the Northwestern Mutual Life Insurance Company was payable jointly to the banks and to the administratrix, and was endorsed by the plaintiff before she delivered the letter directing the disbursement of the funds. However, upon her endorsing the check she was assured by the bank that the same would not be cashed until such time as she had been afforded an opportunity to discuss the entire matter with her attorney. She was present with her attorney when the letter directing payment of the proceeds of the check was signed by her. Premiums upon the life insurance policies were paid by Robinson after his discharge in bankruptcy. The evidence discloses that a representative of the bank had a conversation with the plaintiff relative to the insurance, and expressed the thought to her that there would be some salvage for her after payment of the indebtedness, but she testified that she was informed that approximately $4,000 would be payable to her from such policies. The evidence also shows that the matter of payment of the indebtedness was considered by plaintiff's then attorney, and that he made some investigation of the right of the bank to retain the proceeds of the check in payment of the notes and the rent account. The claim for rent was more than 3 years old at the time the bank obtained payment of it, which is in excess of the limitation period upon such accounts in Oklahoma. No claims were filed in the probate proceedings by the banks or Moody, and this suit was not filed until after the probate proceedings were concluded.

Plaintiff contends that the filing of claims with the Referee in Bankruptcy as unsecured, constituted a waiver of their liens, an election of remedies, judicial estoppel and res adjudicata; that the assignments of the insurance policies were to secure an indebtedness owing to the banks which existed at the time of the settlement of the policies, and that it should not include indebtedness which had been discharged in bankruptcy prior to the time of the settlement of the policies; that the defendants are estopped to assert any right to any sum in excess of $1,820.44, because they permitted and induced Robinson to pay premiums on life insurance policies after his discharge in bankruptcy and prior to his death, upon representation that Robinson's estate would benefit thereby to the extent of about $4,000; that the rent account of $1,332 was barred by the Oklahama Statute of Limitations, and the rent claimed thereon was extinguished before Robinson's death, and finally that equity will aid plaintiff in recovering the sums so retained by the banks, because the same was paid or retained by mutual mistake of law and facts and under circumstances amounting to equitable fraud and undue influence, and constitutes an unjust enrichment of the defendants.

The general rule announced by numerous cases is that a creditor, by proving a general claim in bankruptcy proceedings, waives any security he may have, and having made an election of remedies, may not recover specific property in subsequent proceedings. See Gerber & Co. Inc. v. Wilson, ...