Wilson v. Coburn

• Decision Date: 20 October 1892
• Citation: 35 Neb. 530,53 N.W. 466
• Parties: WILSON v. COBURN.
• Court: Nebraska Supreme Court

35 Neb. 530

53 N.W. 466

WILSON

v.COBURN.

Supreme Court of Nebraska.

Oct. 20, 1892.

Syllabus by the Court.

1. The constitution does not prohibit the conferring upon the county court of equity jurisdiction, except as to the subjects enumerated in section 16, art. 6, viz., actions in which the title to real estate is sought to be recovered or may be drawn in question, actions on mortgages, and for the conveyance of real estate.

2. The funds of an insolvent debtor which come into the hands of the assignee are within the jurisdiction of the county court, and that court will proceed to determine the rights of the creditors thereto, and, subject to the limitations of the constitution, will grant the proper relief, even to the extent of recognizing and enforcing a trust. The jurisdiction of a court of equity in such cases is concurrent only.

3. The fact that a bank is insolvent, within the knowledge of its officers, and receives the money of a depositor under circumstances which amount to a fraud upon him, is not of itself sufficient to entitle the latter to preference from the funds of the bank in the hands of an assignee. He may follow his money while he can trace and distinguish it, or the proceeds thereof, but not after it has passed into the hands of the assignee mingled with the other funds of the bank.

4. Petition examined, and held not to state a cause of action.

Error to district court, Douglas county; E. WAKELEY, Judge.

Petition by Henry Wilson against William Coburn, as assignee of the Bank of Omaha, praying to be made a preferred creditor, and for an order for payment of his claim in full. A demurrer to the petition was sustained, and claimant brings error. Affirmed.Ambrose & Duffie, for plaintiff in error.

Bartlett, Crane & Baldrige, for defendant in error.

POST, J.

The plaintiff filed with the county judge of Douglas county a claim against the Bank of Omaha, which had previously made an assignment for the benefit of its creditors to the defendant in error, sheriff of said county. From the claim or petition aforesaid it appears that there is due to plaintiff in error the sum of $107.53, and interest, being a balance deposited in said bank prior to the assignment thereof. It is further alleged that said bank was insolvent at the time it received the deposit aforesaid, within the knowledge of all of its officers, and that the latter received said money with the intention of cheating and defrauding the plaintiff in error. He asks to be declared by the court a preferred creditor, and for an order for payment in full out of any funds in the hands of the defendant in error, as assignee of said bank. To this petition a demurrer was interposed, and sustained in the county court on the ground that the court had no jurisdiction of the subject of the action, and because the facts stated did not constitute a cause of action. On petition in error to the district court the judgment of the county court was affirmed, and the case removed to this court by petition in error. It is urged as an objection to the proceeding that the petition is in effect a bill in equity for the purpose of having declared a trust in favor of the plaintiff in error. That the granting of the relief sought involves the exercise of equitable jurisdiction by the county court must, we think, be conceded. It is, however, an entire misconception of the powers of that court under the constitution to hold that it possesses none of the attributes of a court of equity. There are many subjects over which the county court as a court of probate has jurisdiction, which, under the old practice, were cognizable exclusively by the chancery courts. A familiar illustration is the jurisdiction formerly exercised by the courts of equity over the accounts of executors and administrators, and to enforce the claims of legatees and next of kin, and in some of the states probate courts and courts of equity still exercise concurrent jurisdiction of all matters pertaining to the estates of deceased persons. Frey v. Demarest, 16 N. J. Eq. 236; Hawes, Jur. 73. In Brown, Jur. 130, it is said: “The jurisdiction of a probate court should and ordinarily does extend to all matters necessarily involved in the disposition of the estate. It may be remarked that the jurisdiction of the probate court partakes largely of the chancery powers. When the statute is silent it is sometimes necessary to look to the principles and practices in that court for a guide.” The precise question involved is not whether the county court has power to allow a preference in any case in which a court of equity would grant relief, but whether it may determine the rights of contesting creditors of an insolvent with respect to funds which have come into the hands of the assignee, and thus directly within its jurisdiction. Our statute on the subject is entitled “An act regulating voluntary assignments for the benefit of creditors, proceedings thereunder, and to prevent the fraudulent violation of the same.” By its provisions original jurisdiction appears to have been conferred upon the county court in all matters pertaining to the distribution of property assigned, with the one exception found in section 20, viz., that the sale of real estate by the assignee shall be confirmed by the district court. It is clear that, upon delivery to the assignee of the personal property of the insolvent bank, the county court acquired jurisdiction over it, and will proceed to determine the rights thereto of all claimants, within constitutional limitations upon its power. The power...