Sterling v. Tantum

• Decision Date: 12 February 1915
• Court: Delaware Superior Court
• Parties: BESSIE R. STERLING v. LEON B. TANTUM

94 A. 176

28 Del. 409

BESSIE R. STERLING v. LEON B. TANTUM

Superior Court of Delaware, New Castle County

February 12, 1915

Superior Court, New Castle County, January Term, 1915.

Action by Bessie R. Sterling against Leon B. Tantum, with garnishee process to the Equitable Guarantee and Trust Company. Heard on motion to quash garnishee process. Motion granted.

ALIAS FOREIGN ATTACHMENT (No. 78, January Term, 1915) laid in the hands of the treasurer of the Equitable Guarantee and Trust Company for the purpose of summoning it as garnishee.

The plaintiff declared in assumpsit on a certain promissory note made by the defendant for five hundred dollars, payable one month after date thereof, with copy of note attached. Counsel for garnishee, by petition, asked leave of court to appear specially for the purpose of filing an affidavit and moving for a rule to show cause why the attachment should not be dissolved and the garnishment process quashed. Leave granted and the issuance of the rule and service thereof were waived.

In the affidavit, the president and the treasurer of the garnishee company, respectively, depose and say, inter alia:

"That the said the Equitable Guarantee and Trust Company is a corporation of the State of Delaware, having the power, by the laws of the said state, among other things to receive deposits of money, discount bills, notes and other evidence of debt and to transact a general banking business, which said powers are actually exercised by the said corporation and it is, therefore, a bank and not subject to the attachment laws of the State of Delaware as by the exemption set out in section 4120 of the Revised Code of Delaware (1915) page 1877."

For the purpose of the hearing upon the rule certain facts were agreed upon by counsel, among them, being:

"That the sum of money sought to be attached in this proceeding in the hands of the Equitable Guarantee and Trust Company was not at the time of the laying of the said attachment in the possession of the said company as a deposit of money made with it in its banking department." But "it is not agreed that there is any sum of money in the hands of the garnishee due to the defendant in the foreign attachment case, and the sole question to be decided by the court is whether the Equitable Guarantee and Trust Company is, under the facts agreed upon exempt from the operation of the attachment laws of the State of Delaware by virtue of the act of assembly known as section 4120 of the Revised Code" (1915) which provides that "all corporations doing business in this state, except banks, saving institutions and loan associations, are subject to the operation of the attachment laws of the State of Delaware, as provided in the case of individuals. * * *"

The court, considering that the question of law presented should be decided by the court in banc, did, on the twelfth day of February, A. D. 1915, upon the joint application of the parties, order and direct that the same be heard by the court in banc. Thereupon, counsel for the respective parties filed an agreed statement of facts, the material parts of which are substantially as follows:

1. That the writ of foreign attachment issued, and the service thereof was duly made upon the Equitable Guarantee and Trust Company, garnishee.

2. That the said company was incorporated by an act of the Legislature of the State of Delaware, passed at Dover on the twenty-third day of April, 1889, etc. (copy annexed); to which act a supplement was passed on the twenty-fifth day of April, 1889, etc. (copy annexed).

3. That the said company did, on the fifth day of February, A. D 1909, duly file an acceptance of the Constitution of the State of Delaware, etc. (copy annexed); that thereafter on the thirteenth day of February, 1909, the said company did procure a renewal of its charter in perpetuity by filing etc. (copy annexed).

4. That an act entitled "An act to amend an act entitled 'An act to incorporate the Equitable Guarantee and Trust Company' and to make perpetual that company's charter" was thereafter passed by the General Assembly etc. (copy annexed).

5. That from the time of its incorporation in 1889 down to date, the said company has been carrying on the business authorized by the provisions of its charter including accepting and executing trusts, acting as trustee, investing money receiving money, jewelry and personal property generally on deposit for safe keeping, acting as receiver, assignee, guardian, executor, administrator or other fiduciary, acting as registrar of stocks and bonds and as surety, carrying on the business of selling and managing real estate and collecting rents for property owners generally.

6. That since the fifteenth day of March, A. D. 1909, the said company has been carrying on a general banking business in addition to its other functions as mentioned in paragraph 5 hereof, including discounting bills, notes and other evidences of debt, receiving deposits of money, buying foreign coins and buying and selling bills of exchange.

7. That in the performance of its various functions and the carrying on of the businesses hereinbefore mentioned, the said company has its business divided into at least three departments, to wit, its trust department; its banking department; and its real estate department, the employees in each of these several departments having their several duties and functions in their own departments, though under the supervision and control of the same general officers of the company; that each of the above mentioned departments keeps its own books of account and occupies its own allotment of office space in the building of the Equitable Guarantee and Trust Company.

It was agreed that all exhibits annexed were to be taken as a part of the statement of facts.

(March 15, 1915.)

The rule came on to be heard before the court in banc.

Argued before PENNEWILL, C. J., and BOYCE, CONRAD, RICE and HEISEL, J. J.

Before beginning the argument, counsel for the garnishee informed the court that the trust funds due Leon B. Tantum, the defendant in this action, were practically ready for distribution; that there are no other funds in the hands of the garnishee due the defendant; and that in the event the court in banc should hold that the garnishee is subject to the attachment laws of the state, they would immediately, upon the opinion of the court being certified to the Superior Court, enter a general appearance in the latter court and file a special declaration (ready for filing) under Section 4127 of the Revised Code of 1915. Counsel for the plaintiff stated that he had examined the special declaration, and that he would, upon the filing thereof move for judgment thereon. Copies of the declaration were thereupon handed to the court for inspection.

It was suggested that the Superior Court might consider that the question of law which would be raised thereby, in the event it should be necessary to file it, should also be decided by the court in banc. Counsel for the plaintiff and for the garnishee suggesting it, and consenting thereto, the court in banc decided to hear not only the question which the Superior Court had directed to be heard, but also the question which the filing of the special declaration would raise.

The special declaration set out in detail and at length, the creation of the trust fund in which the defendant was interested; the time or period of its termination; the appointment of the garnishee as trustee upon the death of the last survivor of the original trustees; and that the parties in interest being entitled to the principal of the trust fund, the trustee garnishee passed its account before the Chancellor, the said parties being present and heard, and not objecting, and the account was approved by the Chancellor, reserving only the question of commissions for the trustee; that the trustee then filed a bill before the Chancellor, asking that the defendants therein--the parties in interest--be required to interplead and state their claims, and that the court instruct the trustee as to the distribution of the trust fund, and for allowance of commission; that the defendant in this action filed his answer with an agreement annexed signed by himself and others entitled, fixing and agreeing upon the amount due each in the distribution; that the Chancellor made a decree, taxing costs, fixing commissions and counsel fees, and directing payment to the parties to the agreement, in accordance therewith--the share to be paid to the defendant in this action being six thousand six hundred and fifty-three dollars and sixty-five cents.

ARGUMENT OF COUNSEL FOR PLAINTIFF ON THE RULE.

From 1889 to 1909 the company was indisputably subject to the attachment laws in all respects except as to deposits of money made with it of the same character as those made with banks.

The express exemption of its deposits of money necessarily denies any claim that it could be otherwise exempt.

In 1909 (25 Del. Laws, c. 177) it was by an amendment to its charter "vested with banking powers." Banking powers are commonly defined (as in the Revised Code of 1915, § 1918) as powers to discount bills and evidences of debt, to receive deposits of money, to buy gold and silver buillion and foreign coins, to buy and sell bills, notes and other evidences of debt and to issue bills, notes or other evidences of debt for circulation as money.

The garnishee trust company was just as much a "bank" before the amendment of 1909 as it was after. But it was not a "bank" then and is not a "bank" now because vesting a corporation with "banking powers" does not necessarily make it a "bank" within the meaning of the statute.

The distinction between a bank and a trust company is well defined. The...