Ghingher v. O'Connell

Parke, J., delivered the opinion of the Court. A certain Alan Percy Gunn created a trust by two deeds of date October 10th, 1913, and May 7th, 1921, respectively, and therein nominated a trustee. ITp'on application jurisdiction of the trust was duly assumed by the Circuit Court of Baltimore City, which, in course of the administration in chancery of the trust, appointed, on February 16th, 1922, the Title Guarantee •& Trust Company the trustee in the ²⁶⁹ place and stead of the former trustee. The Title Guarantee & Trust Company served as trustee, and the trust continued to he administered in equity.

On February 18th, 1933, the Title Guarantee & Trust Company was insolvent, and was then placed in the hands of the bank commissioner as receiver, in accordance with section 61 of article 11 of the Code of Public General Laws of Maryland. A certain William T. O’Connell was shortly thereafter appointed by the Circuit Court of Baltimore City a trustee in the place and stead of the then insolvent corporate trustee, which delivered to the new trustee all of the corpus of the trust with the exception of an item of $18.78, which was deposited to the credit of the retiring trustee in the interest paying savings department of the Title Guarantee & Trust Company; and of another item of $97, which was current income that, pending the accruing period of distribution, was deposited to the credit of the retiring, trustee- in the general banking department of the .Title Guarantee & Trust Company. The retiring trustee was able to deliver to its successor the two bank books of deposit, which constituted the evidence of its contracts of deposit with the company, and to transfer its title and rights as trustee in the deposits to its successor in the trust; hut this delivery and transfer the present trnstee declined to accept because of the insolvency of the depositary, and filed in the cause wherein equity is administering the receivership of the Title Guarantee & Trust Company a petition to obtain a decree that the amount of each of the two- deposits be forthwith paid by the receiver as a preferred claim by virtue of a statutory priority. The chancellor decreed that the incumbent trustee is entitled to a. prior lieu in the sum of the two deposits on all of the assets of the Title Guarantee & Trust Company to secure its. payment in full or proportionately, accordingly as the funds in the hands of the receiver from the liquidation of these assets might be found sufficient or insufficient to discharge the petitioner’s claim and all other claims of the same class.

The correctness of this adjudication depends upon the meaning -of sec ²⁷⁰ tion. 48 of article 11 of the Code, when read in connection with its allied sections. By sections 46 of article 11 of the Code, relating to banks and trust companies, the powers possessed by a trust company when authorized to do business are enumerated, and in section 47 of the same article will be found the provision that: “Any court having jurisdiction to appoint a trustee, guardian, receiver or committee of the estate of a lunatic, idiot or habitual drunkard, or to make any fiduciary appointment, may appoint any such corporation to be such guardian, trustee, receiver or committee, or to act in any other fiduciary capacity.” It is enacted by section 49 that: “Upon the appointment of such corporation as executor, administrator, guardian, trustee, receiver or committee, as provided by this árticle, no official oath shall be required from such corporation or trust company.” Section 48 is the remaining one which relates to another procedural subject-matter, and it prescribes: “48. Ho bond or other security shall be required from any trust company for or in respect to any trust to which it shall be appointed executor, administrator, guardian, trustee, receiver, committee or depositary by the order of any court. In all cases in which such trust companies, whether incorporated under this article or by special act, shall be appointed, or shall be acting, as executor, administrator, guardian, trustee, receiver, committee, or in any other fiduciary capacity, they shall be responsible for losses of moneys or property received or held by them in any such character in the same cases and to the same extent as individuals so acting would be.

Upon the dissolution of any such company by the Legislature, court or otherwise, or in case of its insolvency, all debts or liabilities due or owing by such cprporation in any of said fiduciary capacities, shall be preferred in the distribution of the assets