Dickinson v. First National Bank — 64 A.D. 254

Majority

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Thomas H. Dickinson and Benjamin C. Moore, Plaintiffs, v. First National Bank of Champlain and Wilmer H. Dunn, as General Assignee for the Benefit of the Creditors of Charles Deal and Elmer H. Deal, Individually and Comprising the Firm of Charles Deal & Son, Defendants.

Headnote

Moneys of an insurance company and of a savings and loan association, deposited by their respective agents in a common bank account — a payment of the same to the respective principals, held to be good as against an assignee for creditors of the-agents.

A firm of fire insurance agents made it a practice to deposit the net insurance-premiums collected hy them in a hank account standing in the name of one of the copartners, and then to remit the same hy check to the companies for which they were collected. The other copartner was the treasurer of a savings and loan association, and it was his practice to deposit the funds collected by him for the association, less his commissions, in the bank account above mentioned, and then to remit such sums to the sayings and loan association by-check. The firm becoming insolvent, checks were drawn for the amounts-payable to the insurance companies and to the savings and loan association, respectively, and were forwarded to them by mail. Thereafter, and before the checks were presented to the bank for payment, the members of the firm, individually and as copartners, made a general assignment for the benefit of creditors. .

The moneys collected for the insurance companies and the savings and loan association, which were conceded to he trust funds, were intact, and it did not appear that any part thereof was ever mingled with other funds of the assignors, or that they ever intended to, or did misappropriate any of the moneys: so collected.

Meld, that the trust funds, did not pass to the assignee for the benefit of creditors.

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Submission of a controversy upon an agreed statement of facts pursuant to section 1279 of the Code of Civil Procedure.

Everest & Signor, for the plaintiffs.

Wilmer H. Dunn, attorney in person.

John H. Crook, for First National Bank of Champlain.

On January 26, 1901, and for several years prior thereto, Charles. Deal and Elmer H. Deal were partners, doing business under the firm name of Charles Deal & Son as fire insurance agents at Champlain, N. Y. On said twenty-sixth day of January said Charles Deal and Elmer H. Deal, individually and as such partners, made a general-assignment for the benefit of their creditors, which assignment was duly filed in the proper office on January 28, 1901, and the assignee in said assignment named duly qualified and entered upon the discharge of - his duties as such assignee.

It had been the practice of the said assignors to make deposit of the net insurance premiums collected by them in the First National Bank of Champlain in the name of Charles Deal, and then remit the same by check to the companies or associations for which they were respectively collected.

Within a few days prior to said assignment the assignors collected $228.39, exclusive of their commissions, from various persons for policies issued by the Westchester Fire Insurance Company, and. $66.46, exclusive of their commissions, for policies issued by the Greenwich Fire Insurance Company. On said twenty-sixth day of January, but prior to the execution of said assignment, said assignors deposited said amounts in said bank in the name of Charles Deal, and issued checks for said amounts payable to said companies, respectively, and duly forwarded the same by mail.

It is conceded “ That under said assignors’ firm contract with said insurance companies, said net premiums belonged to the respective companies on whose policies they accrued, and were trust funds in the hands of their said agents, and were to be remitted to said companies monthly. That said firm * * * deposited said moneys * * * under the name of Charles Deal for the sole purpose

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of remitting said sums by check to said insurance companies respectively.” •

At and prior to the making of said assignment Elmer H. Deal ivas the duly appointed and acting local treasurer of the New York Mutual Savings and Loan Association at Champlain. It was his ■duty to receive and collect dues, payments, interest and fines from members of said association,- and remit the same, less his commissions, to the head office in New York.

It is conceded that said moneys belonged to said association, and Ihat they were held by said treasurer, in trust for it.

Shortly prior to said assignment said Elmer II. Deal collected from members of said association $143.10, exclusive of his commissions, and deposited the' same in said bank in the name of ■Charles Deal, for the sole purpose of remitting the same by check to said association,, and forthwith, and on the 25th day of January, 1901, a check was drawn therefor to the order of said association and duly forwarded by mail. After said checks were so mailed said assignment was made and delivered. The assignors were and are insolvent. The ehécks were not presented to the bank "for payment until -after the delivery of said assignment, and the ■officers of the bank having knowledge of the assignment refused to pay said checks or either of them. The moneys so deposited by ■said assignors remain on deposit in said bank.

The claims of said companies and of said association to said .amounts respectively have been duly assigned to the -plaintiffs, but said bank refuses to pay the amounts to them. The plaintiffs ask that they be adjudged to be the owners of said amounts so held by said bank as aforesaid, and that said bank be directed to pay the .same to them.

The relation between the insurance companies and the savings :and loan association respectively, and the assignors, was that of principal and agent. The money collected was held as a trust fund ■and the relation of debtor • and creditor did not arise. It does not appear that any part of the money collected either for the companies or the-association was ever mingled m any way with individual or other moneys of the assignors, except that the three trust funds were mingled in So far as they were united in one account in .the bank to be remitted to the owners thereof respectively. The

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.record does not disclose that the assignors ever intended to, or did, misappropriate any of the moneys so collected.

They proceeded in their usual course of business to remit the actual money collected to their principals, but as the assignment was delivered before the checks were actually presented for payment the account remained in the bank the apparent property of Charles Deal.

•Although the account remained in the name of Charles Deal individually, it was so held for transmission only, and was the property of the corporations in whose favor the checks had been drawn and for whom it had been collected by the assignors.

Property and funds held in trust by an assignor at the time of a general assignment, and capable of being identified, do not pass to an assignee.

The identity and ownership of the money in controversy being conceded, there is but one thing for the court to do in the exercise of its jurisdiction over fiduciary relations, and that is to direct that the funds so held by the bank be paid over to the plaintiffs.

Judgment ordered for the plaintiffs, without costs. .

All concurred.

Judgment ordered for the plaintiffs, without costs.