Bank of America Nat. Trust & Savings Ass'n v. Maryland Casualty Co.

37 F. Supp. 677, 1941 U.S. Dist. LEXIS 3541
CourtDistrict Court, N.D. California
DecidedMarch 24, 1941
DocketNo. 21431-L
StatusPublished
Cited by1 cases

This text of 37 F. Supp. 677 (Bank of America Nat. Trust & Savings Ass'n v. Maryland Casualty Co.) is published on Counsel Stack Legal Research, covering District Court, N.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bank of America Nat. Trust & Savings Ass'n v. Maryland Casualty Co., 37 F. Supp. 677, 1941 U.S. Dist. LEXIS 3541 (N.D. Cal. 1941).

Opinion

LOUDERBACK, District Judge.

The Bank of America National Trust and Savings Association, a national banking association, hereafter called the Bank, instituted this suit for specific performance of a contract, for accounting and for a money judgment against the Maryland Casualty Company, a corporation, hereafter called the Casualty Company.

On January 14, 1921, John Quincy Wrenn died testate, leaving his residuary estate in equal parts to his wife and three children, one of whom was Joseph T. Wrenn. On February 18, 1921, the son, Joseph T. Wrenn, was appointed executor by the Probate Department of the Superior Court of the State of California, in and for the County of El Dorado. The Casualty Company subsequently issued three surety bonds to cover the executor, Joseph T. Wrenn, on contemplated sales of real property by the executor, on behalf of the estate. The three'surety bonds were for the sum of $18,000. Joseph T. Wrenn, during the course of the administration of the estate, embezzled about $13,017.68 and personal property valued at $550. The Casualty Company discovered this defalcation, and on January 10, 1929, it secured a written assignment from Joseph T. Wrenn of his one-fourth interest in the residuary estate. (Plaintiff’s Exhibit 21). Joseph T. Wrenn was removed as executor of the estate by the Probate Court, on January 11, 1929, and on January 23, 1929, Leo J. Anderson was appointed as administrator with the will annexed. The final account of Joseph T. Wrenn as executor was settled by the Court on March 8, 1929, charging Joseph T. Wrenn with $13,017.68 in cash and other real and personal property.

For several years prior to April 24, 1929, Joseph T. Wrenn had been borrowing money from the El Dorado Bank, predecessor to the Bank of America, the present plaintiff. On April 24, 1929, Joseph T. Wrenn was personally indebted to the Bank in the sum of $3,527.11 and interest. When the Casualty Company took an assignment from Joseph T. Wrenn of his one-fourth interest in the residuary estate, the Bank contended that inasmuch as Joseph T. Wrenn was insolvent, the assignment was a preference which was voidable in bankruptcy, and that the Bank would institute bankruptcy proceedings to set aside the assignment. This conflict of interest with respect to the one-fourth interest of Joseph T. Wrenn in the residuary estate brought about the contract of April 24, 1929 (Exhibit a attached to the Complaint), which was entered into between the Bank and the Casualty Company.

The contract recites the facts as set forth above, and then continues (page 3, paragraph 1) :

“Whereas, the Casualty Company claims that the interest of Joseph T. Wrenn in said estate must be applied to the satisfaction of his indebtedness to the said estate arising out of his said misappropriation before it can be applied to the payment of his personal creditors, and
“Whereas, the Bank of America claims that the said estate when Joseph T. Wrenn misappropriated its property, became his general creditor to the extent of such misappropriation, and that as such general creditor, it has no right to apply the interest of Joseph T. Wrenn in said estate to the satisfaction of Joseph T. Wrenn’s indebtedness to it, before the claims of the other general creditors of Joseph T. Wrenn are paid, but merely the right to share pro rata with the other general creditors of Joseph T. Wrenn in the application of his interest in the estate to the payment of their claims, and
“Whereas, even though the Bank of America is right in its contention, still it could not prevail against the Casualty Company, because the Casualty Company has already obtained the said assignment of Joseph T. Wrenn’s interest in the said estate, which assignment will be prior in right to any right that the Bank of America now has or may acquire in the said action, or otherwise, to subject the interest of Joseph T. Wrenn in said estate to the payment of its claim, if the assignment is not set aside by means of a bankruptcy proceeding against Joseph T. Wrenn, or otherwise, and
[679]*679“Whereas, the parties hereto desire to avoid such a bankruptcy proceeding, and desire to have their said respective claims determined as between themselves in the same manner and with the same effect as though the said assignment had not been made by Joseph T. Wrenn to the Casualty Company.
“Now, therefore, by reason of the premises, the parties hereto, in consideration of their mutual promises contained herein, agree as follows:
“1. The Bank of America agrees not to commence any proceedings for the adjudication of Joseph T. Wrenn as a bankrupt.
“2. The Bank of America agrees to petition the court, either by a petition for distribution, or by some other appropriate petition, for an order of the said court to the effect that the interest of Joseph T. Wrenn in said estate is subject to the payment pro rata of the claims of the Bank of America and the Casualty Company, it being understood that if the Bank of America is right in its said contention it shall not secure a prior right against the Casualty Company so far as said personal indebtedness is concerned, by means of a judgment lien, or attachment or execution,' but that, if the Bank of America is right in its said contention, all that the Bank of America obtains by virtue of any judgment, or by virtue of, any attachment or execution, shall be shared by it pro rata with the Casualty Company, and that all the Casualty Company received by virtue of the said assignment shall be shared by it pro rata with the Bank of America.
“3. The Bank of America agrees to transfer and assign to Lloyd L. Mulit its said claim against the said estate for $3,000.00. When such assignment is made, John Ralph Wilson, the attorney for the Casualty Company, or some other attorney it may designate, shall appear in the said estate as the attorney for Lloyd L. Mulit. (Until the Casualty Company pays a loss under its said bonds, it has no right to appear in said matter, and the purpose of the said assignment is merely to give its attorney the right to appear in said matter as an attorney for a creditor of the estate.) Such appearance by the attorney for the Casualty Company in the said matter shall be solely for the purpose of opposing the said petition of the Bank of America and enable it to make its claim that the interest of Joseph T. Wrenn in the said Estate should be applied in satisfaction of the indebtedness of Joseph T. Wrenn to the estate arising out of his said misappropriation before any part of said interest is applied in satisfaction of the sáid judgment of the Bank of America.
“4. If, by an order of the said court which becomes final, the said contention of the Bank of America is maintained, it is agreed that the interest of Joseph T. Wrenn in the said estate shall be applied pro rata to the satisfaction of the claims of the Bank of America and the Casualty Company; and that the Bank of America shall enforce any rights under any such judgment, and under any attachment or execution issued thereunder, to this end and that the Casualty Company shall exercise whatever rights it has under the said assignment to this end, and that if by such final order, the said contention of the Bank of America is maintained, the Casualty Company will not seek to enforce any rights under said assignment from Joseph T.

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Cite This Page — Counsel Stack

Bluebook (online)
37 F. Supp. 677, 1941 U.S. Dist. LEXIS 3541, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bank-of-america-nat-trust-savings-assn-v-maryland-casualty-co-cand-1941.