39 A.2d 137 | Pa. | 1944
This appeal by the Washington Union Trust Company, substituted trustee of the securities or investment pool of the insolvent Washington Trust Company, presents three questions, (1) whether the decree directing distribution of the balance of funds in the Receiver's account is a final decree, (2) whether depositors of a closed trust company have a preferred claim for the full amount of their deposits with interest thereon after the date of receivership, and (3) whether the court below properly awarded counsel fees from the trust fund to the attorney for the depositors, he not having been instrumental in creating or preserving the fund.
The Secretary of the Department of Banking, appellee, was appointed Receiver of the Washington Trust Company on October 5, 1931. On June 30, 1934, the Washington Union Trust Company, appellant, was appointed substituted trustee of the general trust fund of mortgages or mortgage pool of the Washington Trust Company, and substituted trustee of the investment or securities pool of said company. The Receiver proceeded to liquidate the assets of the commercial department of the insolvent Trust Company, filing periodic accounts. By 1940 it was apparent that there were ample assets to pay all depositors in the commercial department the face amount of their deposits with a substantial balance remaining. On June 23, 1940, appellant, as substituted trustee of the mortgage pool, filed a petition in the court below alleging gross mismanagement on the part of officers and directors of the insolvent company and, as substituted trustee of the securities or investment pool, filed a petition alleging fraud upon the settlors of inter vivos trusts. Both petitions requested a right of priority in any liquidation, subject only to the claims of depositors. *366 The sixth and partial account of the Receiver was filed June 30, 1943. Thereupon appellant filed claims with the Receiver and made averments similar to those set forth in its petitions of June 30, 1940. It now claimed, however, as substituted trustee of the securities or investment pool, a right of priority over depositors in any liquidation. On August 20, 1943, appellant filed a petition in the court below setting forth a detailed statement of facts upon which its claim of priority was based.
At the audit of the account appellant filed formal objections to the proposed distribution of the balance to the depositors as interest upon their deposits, asserting the preferred claims of settlors of the inter vivos trusts. Counsel for all parties in interest agreed that consideration of the exceptions be postponed until the court should determine whether interest was to be paid to the depositors. If payment of such interest was necessary to constitute payment in full then no fund would exist to which appellant could look for payment of its claims. The court below decided that interest should be paid to the depositors, directed the payment of counsel fees out of the fund to Andrew M. Linn, Esq., attorney for the depositors, and directed distribution of the balance to the depositors. Exceptions were taken to the adjudication. At the oral argument of January 25, 1944, the court below stated that the decree of November 1, 1943, awarding interest to depositors, was a final decree of distribution. This appeal followed.
A decree to be final and appealable must preclude the complaining party from further action in the court making such decree: Keasbey's Trust Estate,
The date upon which the Receiver assumed control of the Trust Company preceded enactment of the Department of Banking Code of 1933.1 The statute applicable to the distribution of assets was, therefore, the Act of 1907, P. L. 192, as amended by the Act of 1913, P. L. 354. Cf. Harr v. Lower Chichester Township,
Payment of counsel fees out of a trust fund is justified only where the attorney has performed services necessary to the creation or preservation of the fund out of which payment is sought: Peoples-Pittsburgh Trust Company v. Pittsburgh UnitedCorporation,
The decree is modified by refusing counsel fees to Andrew M. Linn, Esq. As thus modified the decree of the court below is affirmed.
First. To the payment of all depositors in the trust company, whether the deposits be subject to immediate check or only payable after specified notice, or at the expiration of a fixed period, whether or not such notice has been given or such period expired at the time of such distribution. Bona-fide holders for value of certified checks on such trust company, or of certificates of deposit issued by such trust company, or of checks or drafts of such trust company given in exchange for or in payment of checks or drafts of depositors of such company drawn thereon, not exceeding the balance to the credit of such depositor, shall also be treated and considered as depositors within the meaning of this act": Act of May 23, 1913, P. L. 354.