161 A. 785 | Conn. | 1932
This reservation presents certain questions for our advice which grow out of the receivership of the defendant, a state bank and trust company, having three departments, commercial, savings and trust. The questions are presented in several counts but certain of these, the fifth and seventh, were withdrawn at the argument. We discuss the situations presented by the other counts separately.
First Count.
The first question asked in this count is whether it is the duty of the receiver to keep records showing the gross income collected by him on the assets of each *367 department separately, as had been the custom of the bank before his appointment. To do so will not apparently be difficult and the information will ultimately be of value, if not necessary, in determining the way in which the expenses of the receivership are to be apportioned and, perhaps, for other purposes.
The second question asks whether income collected by the receiver on assets segregated in the savings department should be added to the segregated principal assets in that department and whether depositors in it have a right to such income if necessary to pay their deposits in full. The statute, General Statutes, § 3908, requires the investment of deposits in the savings department in accordance with the requirements of the statutes concerning the investment of deposits in savings banks and provides that "such investments shall be segregated and set apart and not mingled with other assets of such banks or trust companies, and shall be for the exclusive protection of the depositors in such savings department and shall not be liable for or used to pay any other obligation or liability of such bank or trust company until after the payment of all of the depositors in such savings department." The statute contains no requirement that income received upon the assets so segregated shall be devoted to the payment of deposits, or interest upon them, in the savings department. In the case of a savings bank the depositors are the owners of the assets of the bank in proportion to their deposits and the income from its investments is the source from which ordinarily dividends are principally paid. In the case of such a bank as the defendant, the interest paid upon savings deposits is not paid from the income of its investments, but from the general assets of the bank. To require that the income of segregated investments be added to the principal of the fund would mean that this fund *368
would be indefinitely increased for the protection of the principal of deposits in the department and would have to be held intact, no matter what interest is paid to depositors from the general funds of the bank. This could hardly have been intended by the legislature and no doubt accounts for the omission of any mention of income in the requirement that investments of the savings department be segregated for the exclusive protection of its depositors. Shippee v. Pallotti, Andretta Co., Inc.,
The third question is as follows: "If the principal of segregated assets in the savings department ultimately reduced to cash is sufficient to pay the savings depositors' accounts in full, will accumulated income on savings department assets be properly utilized to pay to savings depositors interest on their savings account, or does such surplus proceeds of collection in the savings department become a general asset of the trust company to meet the general claims of its commercial depositors and its creditors?" In view of the failure in the reservation to present to us the necessary facts we cannot, in answer to so much of the question as deals with the right of depositors to interest on their deposits, say more than we said in Lippitt v. Thames *369 Loan Trust Co.,
Second Count.
In this count we are asked, first, whether the receiver should keep records which will show as far as possible the expenses of administering the receivership incidental to the operation of each department separately; secondly, whether the expenses should be charged to the separate departments in proportion to the value of the assets in each; and thirdly, whether the expenses should be charged generally to income first and upon the exhaustion of income to the assets of the various departments in accordance with their value.
It is a general rule that where a receiver is appointed to conserve assets and ultimately distribute them to those entitled to them the charges of the receivership are to be paid from the fund. 1 Clark, Receivers (2d Ed.) § 637(a). Where, as in this case, there are distinct estates in the hands of a receiver in which different groups of creditors and claimants have different interests, theoretically the expenses of the receivership on account of each estate should be charged wholly against it. This should be done as regards the expenses of the receivership incurred for the sole benefit of any one department which are capable of distinct application as charges against its funds. The stipulation of facts makes it clear that in this receivership it is not possible as to a large part of the services and expenses incurred by the receiver to regard them as *370
being for the sole or particular benefit of any one department but the benefit to two or even all the departments is inextricably blended. As to such services and expenses it is an established principle that they should be apportioned to the various funds in the hands of the receiver upon some fair and reasonable basis. Macdonald v. Aetna Indemnity Co.,
Third Count.
Under this count we are asked to advise as to the validity of a tax assessed against the defendant based upon the amount of deposits in the savings department on January 1st, 1932, under the provisions of §§ 1285 and 1287 of the General Statutes. On December 23d 1931, the plaintiff bank commissioner issued a restraining order against the defendant under the provisions of § 3870 of the General Statutes. On December 24th, 1931, he brought the present action and the Citizens and Manufacturers National Bank of Waterbury was thereupon appointed temporary receiver, qualified and took possession of all the assets of the defendant. On January 21st, 1932, it was confirmed as temporary receiver and on February 5th, 1932, confirmed as permanent receiver and qualified as such. Since its appointment as temporary receiver it has continued to administer the estate and affairs of the defendant. The situation so presented differs essentially from that before us in Shippee v. RiversideTrust Co.,
Fourth Count.
The facts reserved under this count present the following situation: Prior to the suspension of the defendant it had loaned to its customers certain sums of money which were evidenced by notes that were included as part of the principal segregated assets of the savings department. At the time of the loan the borrower presented to it as collateral security for payment of the note his savings deposit book evidencing a deposit in the defendant, with an order authorizing it to appropriate the deposit in full payment of the loan. Upon the suspension of the defendant the receiver found that there were many promissory notes, which were part of the assets of the savings department and accompanied by savings department passbooks *373 held as such collateral security. The contract between the defendant and the borrower was that in the event that the note with interest was not paid upon maturity the defendant might forthwith apply the savings deposit evidenced by the passbook as collateral in liquidation of the principal and interest of the matured note. We are asked, has the maker of a note held as an investment of the savings department and who has pledged his passbook evidencing a deposit in that department a right of set-off of the deposit against the note? If there is no set-off under the above set of facts, is the transaction one in which the receiver may only apply to the payment of the note dividends declared and payable to the maker upon his savings deposit and is the passbook to be treated merely as collateral security, upon which the receiver may realize only to the extent of the dividends declared on the deposit?
The money represented by these notes was loaned to the makers from assets of the savings department and the notes became investments of that department which under the provisions of § 3908 of the General Statutes are required to be segregated and set apart for the protection of depositors in it and in which they all have equal rights. Bassett v. City Bank TrustCo., supra, p. 7. The situation in no essential respect differs from one where a loan is made from the funds of that department and a savings bank book in another bank is presented as collateral security. The defendant in these instances is not relegated solely to the deposit represented by the book as the source from which the notes are to be paid. The apparent purpose of the transaction was to save the depositors the interest which would be lost should they withdraw their deposits. The defendant could not apply the deposit represented by the book to the payment of the *374
note before its maturity. Daly Brothers, Inc. v. LaCroix,
Sixth Count.
The sixth count presents certain situations where a depositor in the defendant bank uses a trade name and either has a deposit in that name and is indebted to the bank upon a note executed in his real name or has a deposit in his real name but is indebted to it upon a note signed with his trade name. We are asked whether there is a right of set-off in such cases. The answer, too obvious to need argument, is that in both situations the same individual is depositor in the bank and indebted to it upon the note and should have the same, and no greater, right of set-off as he would have if the deposit stood in and the note was signed with his true name.
We therefore answer the questions asked as follows: *375
First Count. Question A we answer "Yes"; question B we answer "No"; question C we do not answer. Second Count. In response to question A we say: It is the duty of the receiver to keep such records as will enable any expenses incurred for the exclusive benefit of any department and capable of distinct application to it ultimately to be charged against it, and which will afford the basis of an equitable apportionment of other expenses among the departments at the settlement of the estate. Questions B and C we do not answer. Third Count. Question A we answer "No"; this makes it unnecessary to answer the other questions asked. Fourth Count. Question A we answer "No." In response to question B we say, upon the maturity of any of the notes the receiver is entitled to apply upon the debt any sums becoming due by reason of dividends declared in the receivership. Sixth Count. In response to the question asked in this count we say that the depositor has the same, and no greater, right of set-off as he would have if the deposit stood in and the note was signed with his true name.
No costs in this court will be taxed to either party.
In this opinion the other judges concurred.