Pendleton v. Hellman Commercial Trust & Savings Bank

CONREY, P. J.

The plaintiff, as administrator of the estate of C. W. Pendleton, Jr., deceased, brought this action to recover the amount of a deposit credit of $360.33 as shown on the books of People’s Trust and Savings Bank, a corporation. By reason of transactions between the People’s Trust and Savings Bank and the defendant bank, it is conceded that the liability, if any there be, is now the liability of the defendant. C. W. Pendleton, Jr., died on April 25, 1919. The answer of the defendant states that on February 28, 1919, the People’s Trust and Savings Bank loaned to decedent the sum of $5,000, for which he gave his note, without security, payable ninety days after that date. The note was not paid, and prior to the commencement of this action it was transferred to the defendant for the purposes stated

[449]

in the answer. It does not appear that any claim has been presented to the administrator for allowance of the amount of the note as a debt of the estate payable in course of administration. The answer further alleged that C. W. Pendleton, Jr., was insolvent at the time of his death, and that the assets of his estate were insufficient to pay his liabilities, and that the estate is insolvent.

The plaintiff having moved for judgment on the pleadings, this motion was granted and judgment entered in favor of the plaintiff for the amount of the deposit. From this judgment the defendant appeals.

For all practical purposes, the questions at issue are the same as if the deposit had been made in defendant bank and the note of decedent had been made to the defendant. The judgment rests upon the assumption that because the debt of Pendleton to the bank was not due at the date of his death, the bank never acquired any right of setoff, or any' so-called “banker’s lien” upon the deposit fund, whereby that fund could be applied toward payment of the debt owing but not then due from Pendleton; that, therefore, the bank, with reference to the note held by it, is only a general creditor, and as such creditor can only present its claim against the estate as an item wholly unconnected with" the amount which decedent had left on deposit in the bank.

It is not to be denied that under ordinary conditions, where the debt to the bank is not due, the banker’s right to set off a deposit against such debt does not exist. But in this case the depositor at the time of his death was insolvent. It is provided by section 3054 of the Civil Code: “A banker has a general lien, dependent on possession, upon all prop- ' erty in his hands belonging to a customer, for the balance due to him from such customer in the course of the business.” Belying upon this section, respondent contends that the lien does not exist, because at the time of Pendleton’s death the note to the bank was not due. In reply to this it might well be questioned whether the section is applicable to the case, since money deposited in a bank is not property of the depositor. The money belongs to the bank, which is the depositor’s debtor for the amount deposited. Assuming, however, that the indebtedness of the bank to its depositor is lienable property within the terms of said section 3054, the contention that the lien is not enforceable here because