208 P. 702 | Cal. Ct. App. | 1922
The plaintiff, as administrator of the estate of C. W. Pendleton, Jr., deceased, brought this action to recover the amount of a deposit credit of $360.33 as shown on the books of People's Trust and Savings Bank, a corporation. By reason of transactions between the People's Trust and Savings Bank and the defendant bank, it is conceded that the liability, if any there be, is now the liability of the defendant. C. W. Pendleton, Jr., died on April 25, 1919. The answer of the defendant states that on February 28, 1919, the People's Trust and Savings Bank loaned to decedent the sum of $5,000, for which he gave his note, without security, payable ninety days after that date. The note was not paid, and prior to the commencement of this action it was transferred to the defendant for the purposes stated *449 in the answer. It does not appear that any claim has been presented to the administrator for allowance of the amount of the note as a debt of the estate payable in course of administration. The answer further alleged that C. W. Pendleton, Jr., was insolvent at the time of his death, and that the assets of his estate were insufficient to pay his liabilities, and that the estate is insolvent.
The plaintiff having moved for judgment on the pleadings, this motion was granted and judgment entered in favor of the plaintiff for the amount of the deposit. From this judgment the defendant appeals.
For all practical purposes, the questions at issue are the same as if the deposit had been made in defendant bank and the note of decedent had been made to the defendant. The judgment rests upon the assumption that because the debt of Pendleton to the bank was not due at the date of his death, the bank never acquired any right of setoff, or any so-called "banker's lien" upon the deposit fund, whereby that fund could be applied toward payment of the debt owing but not then due from Pendleton; that, therefore, the bank, with reference to the note held by it, is only a general creditor, and as such creditor can only present its claim against the estate as an item wholly unconnected with the amount which decedent had left on deposit in the bank.
It is not to be denied that under ordinary conditions, where the debt to the bank is not due, the banker's right to set off a deposit against such debt does not exist. But in this case the depositor at the time of his death was insolvent. It is provided by section
We perceive no reason why a bank's right of setoff, as against an insolvent depositor who is also indebted to the bank, should be confined to the statutory right of setoff recognized by the Civil Code. "The 'banker's lien' referred to in section
[2] Respondent contends also that under the statutes of this state no claim can be used as a setoff and counterclaim *452
against the estate of a decedent unless the claim upon which the same is founded has been presented to the personal representative of the decedent. Thus, in Reed v. Johnson,
There is one decision of our supreme court, arising out of facts very much like those of the present action, except that in that case the bank presented to the executrix its claim, although not for the entire amount of the note, but for a stated balance, crediting thereon the amount of the deposit; and except, also, that the fact of insolvency did not appear. At the time of his death the decedent was indebted to defendant on a note not yet due, and had on deposit in the bank a lesser sum. When the note matured the bank applied on the note the amount of the deposit. The bank having refused to pay to the executrix the amount of the deposit, she brought this action. The supreme court, reversing the judgment of the superior court, held that the bank was entitled to credit for the amount of the deposit, as a cross-demand which might be set off against the note; that although the note of deceased was not due when he died, it was sufficient that it had become due when the action was brought. In its decision, the supreme court pointed out that there was no finding or evidence as to the solvency or insolvency of the estate. The decision was grounded upon the proposition that the purpose of the law was to ascertain the balance existing and to give to both the claimant and the estate the benefit of all just offsets, whether the estate be *453
solvent or insolvent. In view of this conclusion, the court held it "unnecessary to decide whether the appellant had a right to apply the deposit by virtue of the banker's lien claimed by it." (Ainsworth, Executrix, etc., v. Bank ofCalifornia,
The judgment is reversed.
Shaw, J., and James, J., concurred.
A petition to have the cause heard in the supreme court, after judgment in the district court of appeal, was denied by the supreme court on August 31, 1922.
All the Justices present concurred.
Richards, J., pro tem., and Myers, J., pro tem., were acting.