Union Indemnity Co. v. Florida Bank & Trust Co., 945-M.

• Decision Date: 17 March 1931
• Docket Number: No. 945-M.,945-M.
• Court: U.S. District Court — Southern District of Florida
• Parties: UNION INDEMNITY CO. et al. v. FLORIDA BANK & TRUST CO.

48 F.2d 595 (1931)

UNION INDEMNITY CO. et al. v. FLORIDA BANK & TRUST CO.

No. 945-M.

District Court, S. D. Florida.

March 17, 1931.

Miller & McKay and James A. Dixon, all of Miami, Fla., for complainants Union Indemnity Co. and United States Fidelity & Guaranty Co.

Hudson & Cason and Park H. Campbell, all of Miami, Fla., for complainant Hartford Accident & Indemnity Co.

Gedney, Johnston & Lilienthal and Harry A. Johnston, all of West Palm Beach, Fla., for defendant Florida Bank & Trust Co.

RITTER, District Judge.

This cause comes on for final hearing upon an agreed statement of facts, and the court, having considered the same and heard argument of counsel, finds as follows:

On March 20, 1926, the First American Bank & Trust Company, a state bank under the laws of Florida, was appointed by due order of this court as a depository of bankrupt funds of estates in the hands of receivers or trustees. In order to qualify such depository, First American Bank & Trust Company executed four certain bonds, to wit, $70,000 with Union Indemnity Company as surety, $35,000 with United States Fidelity & Guaranty Company as surety, and two bonds aggregating $19,000 with Hartford Accident & Indemnity Company as surety. Each of the said sureties have instituted separate actions in this court against the defendant, all of similar import, and a decision in this cause of the Union Indemnity Company shall be accepted as a decision in the other cases.

On the 18th day of June, 1928, the First American Bank & Trust Company became insolvent and was taken over under the state banking law by the comptroller of the state of Florida designating W. H. Tunnicliffe as receiver, said appointment being under the proper proceedings and confirmation as provided by law. Said receiver has been succeeded by J. F. Cochrane, and later by Florida Bank & Trust Company as liquidator. At the time of such suspension of business there was on deposit in said First American Bank & Trust Company the funds of several bankrupt estates totaling $90,629.09, said deposits being in the name of the respective trustees or receivers of said bankrupt estates, and were subject to check as provided by acts of Congress relating to bankruptcy, as follows:

                                               Trustee or
                  Estate                       Receiver              Amount
                  Elmer Cook                   R.J. Bacon ....... $   382 56
                  Edward Johnson Upholstering
                   Co.                         C.C. Calloway ....      14 67
                  G.W. Bingham                 E.C. Cook ........     310 57
                  Monk's Furniture & Rug
                   Store                       E.B. Davis .......   11,459 02
                  J. Mulberg                   Harry Dietz ......    2,367 65
                  Kelsey City Mercantile
                   Co.                         D.W. King .........   1,660 00
                  Delray Quality Shop          B.F. Paty .........     175 10
                  Southern Florida Operating   Smith, Lamar
                   Co.                          and Langford .....      51 95
                  Southern Florida Realty      Smith, Lamar
                   Co.                          and Langford .....  50,308 71
                  Mizner Development           E.T. Halter, E
                   Corp.                        B. Davis and
                                                L.L. Ford ........  13,914 88
                  Waalewyn's Domestic          Charles W
                   Bakery                       Shearman .........     695 92
                  Frank G. Lang                Charles H. Warwick
                                                Jr. ..............   2,833 88
                  Lake Worth Lumber Co.        J.W. Harwell ......   6,454 18
                                                                   __________
                    Total ........................................ $90,629 09
                

The bills of complaint in the other cases, namely, United States Fidelity & Guaranty Company, No. 946-M Equity, and Hartford Accident & Indemnity Company, No. 947-M Equity, set out like deposits of different trustees or receivers of bankrupt estates. The respective trustees or receivers aforesaid filed claims with the said liquidator, asking that the funds on deposit in said bank be considered as debts due the United States and given preference on account thereof. The said liquidator has denied said claims as preferred.

After such denial, the said trustees and receivers made demand upon the surety companies, and the surety companies paid to the United States the sums of money secured by their respective bonds and received an assignment of the claims of the said receivers and trustees, subject to an approval order of this court. The surety companies, after making such payments, again filed claims with the receiver as preferred creditors, and the preference was again denied. The suits are brought for the purpose of establishing these claims as preferred claims under sections 191 and 193, title 31, USCA.

Conclusions of Law.

1. There is a controversy arising out of and based upon the laws and statutes of the United States. There are the requisite jurisdictional matters present in this case and the other two cases hereinbefore enumerated, and the court has jurisdiction of the subject-matter of this and the other such cases.

2. The question presented for decision is whether the claims of the complainant are debts due the United States under section 191 and 193, title 31, USCA. If they are, complainant is entitled to a judgment of preference.

Section 191 provides:

"Whenever any person indebted to the United States is insolvent * * * the debts due to the United States shall be first satisfied."

Section 193 provides that where a surety on a bond, as presented in this case, pays the obligation, it shall have "the like priority for the recovery and receipt of the moneys out of the estate and effects of such insolvent or deceased principal as is secured to the United States; and may bring and maintain a suit upon the bond, in law or equity, in his...