70 Minn. 393 | Minn. | 1897
Lead Opinion
The Citizens’ Bank of Redwood Falls was organized as a banking corporation under the laws of this state, and, as such corporation, continued to do business in Redwood county until May 14, 1895, when it became insolvent, and made an assignment to the Northern Trust Company for the benefit of all the creditors of said bank. While it was doing business as such bank the state treasurer, August T. Koerner, deposited with it from time to time money amounting, in the aggregate, to the sum of $6,064.67, of which only $3,031.59 has been paid. Prior to receiving such deposits, the bank executed and delivered to the state treasurer a satisfactory personal bond, conditioned to pay said sums when duly required to do so.
The Northern Trust Company duly qualified as such assignee, and, upon failure of said bank to pay said unpaid deposit, the state duly filed with the assignee the said claim; and by order of the district judge said claim on April 13, 1896, was made a preferred claim, and the assignee directed to pay one thousand dollars thereof immediately, and thereafter, whenever said assignee should have in his possession moneys belonging to said insolvent estate not less than $500 in excess of such sums as might be necessary to pay the fees and expenses of administering said estate, then such excess should be paid over to the state treasurer, without further order, until said claim of the state should be fully paid. On April 17, 1896, the assignee paid to the state treasurer the sum of one thousand dollars, but never paid any further sum, although it collected money belonging to the bank amounting to the sum of $1,955.35 in excess of all the necessary expenses of administration.
On December 31, 1896, the Northern Trust Company also became insolvent, and Daniel Fish was appointed receiver thereof, and N. W. R. Hunter was duly appointed assignee of said bank in the place of the Northern Trust Company. The time limited by the court for presenting claims against the Northern Trust Company expired
In order that there may be a full understanding of the facts in the case, it is necessary to state that the bank assignment was made and subsequent proceedings had in the Ninth judicial district, Judge B. F. Webber presiding, and that the Northern Trust Company was located in Hennepin county, and the receiver therefor appointed by a district judge of said county, and this proceeding was brought in said county, being in the Fourth judicial district.
That this claim was a preferred one as against the Citizens’ Bank of Redwood Falls we need not discuss, for a similar question was determined affirmatively by this court in the case of State v. Bell, 64 Minn. 400, 67 N. W. 212.
When the matter was pending in the district court of Redwood county, the district court of that county had jurisdiction of the parties and the subject-matter, and under the order of April 13, 1896, made by Judge Webber, making this claim a preferred one and directing the trust company to pay it as such to the state, the right of the state to be paid that amount out of the bank’s assets in the hands of the assignee became conclusive, as there was no‘ reversal of said order. The trust company, as assignee, having filed and allowed this claim, and paid over to the state treasurer the one thousand dollars, as directed by the order of the judge, must
It is to be observed that this money converted by the trust company was not the property of the state. It was the money of the bank, but, when assigned, held in trust by the trust company, as assignee for the benefit of the;,bank’s creditors; and, because the claim of the state was a preferred one, the title to the assets did not rest in the state. How far this fund might be followed by Hunter, the substituted assignee of the bank, or might have been followed by the state in a proper case and upon a complete trial, we need not here determine. In the recent case of Bishop v. Ma-honey, supra, page 238, some of the rules applicable to this right of following trust funds are laid down; but it is unnecessary to repeat them here. The defendant receiver denied that he had any of the $1,955.35 fund in his hands, and alleges that no such fund ever came into his hands. This question was submitted to the court, and we see no reason to disturb the finding of the court thereon, as no evidence of any kind was introduced to contradict or impeach it. The state is therefore concluded by this finding. It had its day in court upon this identical question, and is bound by the decision. The state did have a preferred claim against the trust company, amounting to $15,669.71, for money it deposited with it directly, which the state filed as a preferred claim, and the amount was allowed and paid by the receiver; but it never presented. this claim as a preferred claim, and the receiver, without notice of this claim, has disbursed nearly all of the funds which have come into his hands.
Although the state is concluded by the proceeding before the district court of Hennepin county from presenting this claim as a preferred one, we find no reason why it should not be permitted to
The order of the trial court is therefore affirmed, with leave to the state to apply to said court to fix a time within which said claim may be filed with the receiver by the state, as a general creditor of said trust company; but the extent of the liability of said receiver on such claim if so filed is not here passed upon or determined.
Order affirmed.
Concurrence Opinion
I concur. An order was made in the assignment proceedings of the insolvent bank, declaring the state to be a preferred creditor, and ordering the trust company, as assignee of the bank, to pay the claim. If this order amounted to a final judgment or decree in favor of the state, and against the trust company, so that it was a legal obligation on which the state could sue the trust company in an independent action or proceeding, then the state would in law be a creditor of the trust company, and therefore, under G. S. 1894, §§ 4234, 4251, a preferred creditor. But it was not such an order. Except as hereinafter stated, it was enforceable only in the assignment proceedings, and the money of the bank in the hands of the trust company as assignee did not, by virtue of that order, become in law the money of the state until paid over to the state. But equity regards that as done which should be done, and if this money in the hands of the trust company as assignee (which should have been paid over to the state) could be traced into the hands of the receiver of the trust company, and there identified, the state would, in my opinion, be a preferred creditor, not by virtue of said sections 4234 and 4251, or section 5898 (see State v. Bell, 64 Minn. 400, 67 N. W. 212), but by virtue of the rules of equity applicable to such cases.
There are two successive steps to be taken in arriving at this conclusion: First, that equity regards that as done which should be done, and therefore the state has an equitable claim against the trust company; second, that, by reason of the equitable doctrine of following trust funds, the state may, if it can, follow the fund into
Concurrence Opinion
I concur in the result, on the ground that the state is not a creditor of the trust company. As a preferred creditor of the bank, the state is possibly entitled to be subrogated to the rights of the bank against the trust company, so as to enable it to apply the proceeds of the claim of the former against the latter on its demand against the bank. But, at most, this is the extent of the state’s rights in the premises.
