Gardiner v. Fulton, Supt. of Banks

Ohio Court of Appeals

Gardiner v. Fulton, Supt. of Banks

187 N.E. 302, 45 Ohio App. 437, 13 Ohio Law. Abs. 484, 1932 Ohio App. LEXIS 250

CourtOhio Court of Appeals

DecidedDecember 19, 1932

DocketNo 2735

StatusPublished

This text of 187 N.E. 302 (Gardiner v. Fulton, Supt. of Banks) is published on Counsel Stack Legal Research, covering Ohio Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Gardiner v. Fulton, Supt. of Banks, 187 N.E. 302, 45 Ohio App. 437, 13 Ohio Law. Abs. 484, 1932 Ohio App. LEXIS 250 (Ohio Ct. App. 1932).

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Opinions

This action is in this court on appeal from a decree and judgment of the court of common pleas allowing as a preferred claim certain amounts to be paid from the assets of the Ohio Savings Bank Trust Company, now in process of liquidation by Ira J. Fulton, the superintendent of banks.

Six separate actions filed in the court of common pleas were consolidated, and thereafter heard and considered as one, and are now presented to this court, as in the court of common pleas, on a motion for judgment on the pleadings. Each of the plaintiffs in the actions so brought was an heir of John T. Coghlin, *Page 438 deceased, and as such is the owner in fee simple of an undivided one-twelfth of lots numbered 204 and 205 in Port Lawrence division in Toledo, Ohio, upon which is erected the Commodore Perry Hotel. The Commodore Perry Company leased from the owners thereof the premises aforesaid for a period of ninety-nine years at a stipulated quarterly rental of $4,500, payable in advance. The lease provides that this rental shall be paid to the Security Savings Bank Trust Company of Toledo, or to such other bank or trust company in Toledo as lessors may from time to time designate, and shall be distributed by such bank or trust company to lessors in proportion to their respective interests therein. Since the 17th day of June, 1931, the defendant, as superintendent of banks, has been in possession, for liquidation purposes, of all of the property and assets of the Security-Home Trust Company, theretofore the Security Savings Bank Trust Company. On June 19, 1931, the owners of the premises in question designated the Ohio Savings Bank Trust Company as the trust company to which the rentals were to be paid, the trust company agreeing to act as such trustee, in accordance with such designation, and under the terms of said lease, in the collection and distribution of the rentals payable thereunder. On July 31, 1931, the Commodore Perry Company paid into the trust department of the Ohio Savings Bank Trust Company the sum of $4,500, being the quarterly payment of rent then due. On August 11, 1931, a cashier's check for $375 was mailed to each of the co-lessors, among whom were the plaintiffs in the six consolidated actions. The checks so mailed, when received by these plaintiffs and presented for payment, were not paid. The Ohio Savings Bank Trust Company discontinued business on August 15, 1931, and on the following Monday, August 17, the defendant superintendent of banks took possession of its assets and property for liquidation. *Page 439 On and since August 15 there has been, and there now is, in the vaults of the Ohio bank a sum of money in excess of the rentals paid to it by the hotel company. A claim for preference presented by lessor plaintiffs was rejected by the defendant. The answer of the defendant admits the foregoing facts and alleges that the Ohio Savings Bank Trust Company was engaged in a general banking business, and that all funds received by it from whatever source derived were commingled together and all disbursements for whatsoever purpose were made from the commingled fund, and that such was the customary practice of banks; that it had received funds on account of various trust estates, aggregating $2,127,310.58, including funds of plaintiff, which it had so commingled, and that claims for preference for such funds and for an additional $1,498,792.30 have been asserted; that, at the time of closing, the bank had $2,026,537.23 cash in its vaults; and that the lowest amount of cash in vaults since the date of payment of said rent was on August 8, 1931, in the amount of $957,812.83. No reply was filed to this answer of the defendant.

The admitted facts stated in the pleadings disclose that the rentals received by the Ohio Savings Bank Trust Company were received for a specific purpose, and by the terms of their receipt it was expressly agreed that distribution of the rentals should be made to those for whom received and to whom payable.

Our opinion is that by no manipulation of the bank, either by commingling the rentals with other funds, or by otherwise using the same, could the trust imposed by the agreement be divested and the relationship created thereby be converted into that of mere debtor and creditor. Our conclusion, therefore, is that the sum of $4,500 received by the bank from the Commodore Perry Company as rentals is entitled to priority over the claims of general creditors, to be adjusted and determined *Page 440 in accordance with the rule indicated in State, ex rel. ToledoTheatres Realty Co., v. Fulton, Supt. of Banks, 124 Ohio St. 360,362.

Decree accordingly.

RICHARDS and WILLIAMS, JJ., concur.

ON APPLICATION for rehearing.

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This action is in this court on appeal from a decree and judgment of the court of common pleas allowing as a preferred claim certain amounts to be paid from the assets of the Ohio Savings Bank Trust Company, now in process of liquidation by Ira J. Fulton, the superintendent of banks.

Six separate actions filed in the court of common pleas were consolidated, and thereafter heard and considered as one, and are now presented to this court, as in the court of common pleas, on a motion for judgment on the pleadings. Each of the plaintiffs in the actions so brought was an heir of John T. Coghlin, *Page 438 deceased, and as such is the owner in fee simple of an undivided one-twelfth of lots numbered 204 and 205 in Port Lawrence division in Toledo, Ohio, upon which is erected the Commodore Perry Hotel. The Commodore Perry Company leased from the owners thereof the premises aforesaid for a period of ninety-nine years at a stipulated quarterly rental of $4,500, payable in advance. The lease provides that this rental shall be paid to the Security Savings Bank Trust Company of Toledo, or to such other bank or trust company in Toledo as lessors may from time to time designate, and shall be distributed by such bank or trust company to lessors in proportion to their respective interests therein. Since the 17th day of June, 1931, the defendant, as superintendent of banks, has been in possession, for liquidation purposes, of all of the property and assets of the Security-Home Trust Company, theretofore the Security Savings Bank Trust Company. On June 19, 1931, the owners of the premises in question designated the Ohio Savings Bank Trust Company as the trust company to which the rentals were to be paid, the trust company agreeing to act as such trustee, in accordance with such designation, and under the terms of said lease, in the collection and distribution of the rentals payable thereunder. On July 31, 1931, the Commodore Perry Company paid into the trust department of the Ohio Savings Bank Trust Company the sum of $4,500, being the quarterly payment of rent then due. On August 11, 1931, a cashier's check for $375 was mailed to each of the co-lessors, among whom were the plaintiffs in the six consolidated actions. The checks so mailed, when received by these plaintiffs and presented for payment, were not paid. The Ohio Savings Bank Trust Company discontinued business on August 15, 1931, and on the following Monday, August 17, the defendant superintendent of banks took possession of its assets and property for liquidation. *Page 439 On and since August 15 there has been, and there now is, in the vaults of the Ohio bank a sum of money in excess of the rentals paid to it by the hotel company. A claim for preference presented by lessor plaintiffs was rejected by the defendant. The answer of the defendant admits the foregoing facts and alleges that the Ohio Savings Bank Trust Company was engaged in a general banking business, and that all funds received by it from whatever source derived were commingled together and all disbursements for whatsoever purpose were made from the commingled fund, and that such was the customary practice of banks; that it had received funds on account of various trust estates, aggregating $2,127,310.58, including funds of plaintiff, which it had so commingled, and that claims for preference for such funds and for an additional $1,498,792.30 have been asserted; that, at the time of closing, the bank had $2,026,537.23 cash in its vaults; and that the lowest amount of cash in vaults since the date of payment of said rent was on August 8, 1931, in the amount of $957,812.83. No reply was filed to this answer of the defendant.

The admitted facts stated in the pleadings disclose that the rentals received by the Ohio Savings Bank Trust Company were received for a specific purpose, and by the terms of their receipt it was expressly agreed that distribution of the rentals should be made to those for whom received and to whom payable.

Our opinion is that by no manipulation of the bank, either by commingling the rentals with other funds, or by otherwise using the same, could the trust imposed by the agreement be divested and the relationship created thereby be converted into that of mere debtor and creditor. Our conclusion, therefore, is that the sum of $4,500 received by the bank from the Commodore Perry Company as rentals is entitled to priority over the claims of general creditors, to be adjusted and determined *Page 440 in accordance with the rule indicated in State, ex rel. ToledoTheatres Realty Co., v. Fulton, Supt. of Banks, 124 Ohio St. 360,362.

Decree accordingly.

RICHARDS and WILLIAMS, JJ., concur.

ON APPLICATION for rehearing.

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187 N.E. 302, 45 Ohio App. 437, 13 Ohio Law. Abs. 484, 1932 Ohio App. LEXIS 250, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gardiner-v-fulton-supt-of-banks-ohioctapp-1932.

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