Italian Fruit & Importing Co. v. Penniman & Carrington

This is an appeal from an order overruling the exceptions to an audit distributing assets of the City Trust and Banking Company. The appellant chartered the steamship “Astrea” for five months at $4,001.25 per month, payable semi-monthly in advance. The owner demanded security and the City Trust and Banking Company gave what is spoken of as a banker’s guarantee for that purpose on March 14th, 1903. The appellant company had an account with the Banking Company previous to that time, and on that date drew a certified check for $15,000 to the order of Wm.

F. Wheatley, who was president of the Banking Company, which was charged to the general account of the appellant. At the time the certified check was give the appellant apparently did not have the full amount in its account, but it was made good a day or two afterward. The receiving teller testified that the certified check was credited to an account in which the Banking Company kept “special monies for disbursements that we were obligated for.” There is some controversy between the parties as to the exact status of this fund, but it is shown that after the check was given the representative of the steamship was satisfied. An effort was made to get a bonding company as security for the charter party but that failed.

The object was to release the $15,000 so the appellant would have the use of it. An arrangement was made by which the Banking Company was to pay the semi-monthly charges for the vessel, out ⁶⁹⁹ of the $ 15,000 and some additioal deposits made by appellant which were necessary to meet the charges for five months. It did make some payments and on June 6th, 1902; there was still a balance of $8,786.48. On that date the Banking Company was placed in the hands of receivers, who are the appellees, and the appellant filed a petition alleging that said balance was a special fund held in trust for the payment of the hire of the ship, and was not a regular deposit subject to check.

The petition asked the Court to pass an order requiring the receivers to pay said sum to a trustee to be appointed by the Court, to be applied towards the payment of the hire of the ship as it became due. The Court passed an order for the receivers to show cause why that should not be done. They answered the petition, testimony was taken before an examiner, and some before the auditor. An audit was stated distributing twenty pet centum to the general creditors, including the appellant, which filed exceptions because it was not distributed to in full payment of its account.

There is some controversy between the parties as to whether the relation of trustee and cestui que trust did not exist between the Banking Company and the appellant, but in the view we take of the case that is immaterial. The uncontradicted testimony of Mr. Carrington, one of the receivers, shows that on June 6th, there appeared by the books of the Banking Company to be in other banks and on hand $4,485.69, of which amount only $2,062.75 was received by the receivers, in currency and checks. The latter amount was deposited after 12 o’clock on that day and was in the vault of the company. All monies