Doty v. Ghingher

Adkins, J., delivered the opinion of the Court. The only question in this case is whether the balance of a deposit of $5,000, deposited in the Central Trust Company of Maryland, on June 2nd, 1924, by Walter C. Doty, is to be treated as a trust and a preferred claim in the distribution of the assets of said trust company. The petition of Abram Hemp and Medora I. Doty, executrix of Walter C. Doty, filed in the receivership case of said trust company, alleges that on June 2nd, 1924, an agreement was entered into between the said Abram Hemp and Walter C. Doty and the Central Trust Company of Maryland, under which the said Hemp and Doty each individually deposited with said trust company the sum of $5,000, in individual ⁴²⁸ accounts marked “Abram Hemp, Special,” and “Walter O. Doty, Special,” upon terms set out in said agreement, a copy of which is filed as an exhibit; that Doty is now deceased, and the petitioner Medora I. Doty is the executrix of his will and has duly qualified; that the purpose of said deposits was to guarantee said trust company against loss on account of the liquidation of notes discounted for the firm of “Hemp and Doty” by said trust company; that, since entering into said agreement and making said deposits, the discounted notes have been materially reduced, but there remain unpaid certain notes (described in the petition) amounting to $2,972.15; that there is on deposit in said trust company in the name of said partnership the sum of $401.58; that petitioners are advised that the said deposits are in fact trust funds deposited for a specific purpose, and held by said trust company in trust for said purpose; and that, after the deduction of said notes with accrued interest, petitioners are entitled to have the remainder of said deposits delivered to them as preferred claims against said trust company and said notes returned to petitioners. The prayer of the petition is for an order directing the receiver of said trust company to set off the amount of said remaining discounted notes against said specific deposits plus the said amount on deposit in the partnership name, and that the balance be made a preferred claim against said receivership in such amounts as the court may determine due to Abram Hemp and Medora I. Doty, executrix, separately and individually, and that said notes so liquidated be returned to petitioners.

By the agreement Abram Hemp and Walter O. Doty agree to deposit $5,000 each upon four per cent, interest account, they to receive the interest accruing therefrom, the said deposit to be subject to the control of said trust company pending the liquidation of the affairs of the said firm and until all discounts, claims, and charges which may now or may hereafter be held by said trust company against said firm or the individual members thereof have been completely liquidated and satisfied. And in consideration of said deposit the trust company agrees to renew from time to time such of ⁴²⁹ said notes until said notes are finally curtailed, reduced, and paid; said renewals, however, in no event to continue for more than three years from the date of the agreement. It is further mutually agreed that, upon complete liquidation of said claims, said deposits shall he released to the depositors, together with any accrued interest thereon, hut not until the trust company has been completely satisfied, and that said notes shall be reduced as rapidly as possible. Although the petition was filed on behalf of both Abram Hemp and Medora I. Doty, executrix, the proceeding seems to have been pursued only by Mrs. Doty.

There appears in the record an abstract- of the hank hook of W. G. Doty, as follows: “Bank Book A Ho. 7634, In account with W. O. Doty —Special (See