Miller v. Fidelity & Deposit Co. of Maryland

WILLIS, J., pro tem. A receiver was appointed in an action between partners and furnished bond in the sum of $10,000, executed by respondent, a commercial surety company. In course of administration the receiver accumulated $8,099.72 in cash, and deposited the same in a bank of his own choice, without authorization of court, in an account in his name as receiver and separate from any personal account. In a subsequent judgment in the action the court ordered the receiver to pay- a specified sum in his possession as receiver to appellant, a party to the action. Upon his failure so to do this action was commenced against the surety on the bond, respondent herein. After trial the court found that the receiver had come into possession of the sum of $8,099.72, cash, and, without authorization of the court, had deposited the same in a bank which subsequently failed and refused to repay the deposit; that the receiver was not negligent in his choice of such bank as a depositary, and that by reason of such failure of the bank and loss of the deposit the receiver was unable to obey the order of the court to pay such moneys to appellant. On the findings the court concluded that respondent was not liable, and judgment in its favor was accordingly entered, from which this appeal is taken.

[582]Appellant’s first point, that the evidence is not sufficient to sustain the finding of lack of negligence in the receiver’s choice of a bank as depositary, is not well taken. We find ample evidence in the record to sustain such finding, and under familiar rule this court must accept the same as conclusive. This leaves for decision the question of correctness of the trial court’s conclusion.

In respect to the question of liability on a receiver’s bond for loss of funds deposited in a bank which afterwards fails, there are herein advanced two contrary rules. The one relied upon by respondent may be stated as follows: If the court and law is silent as to the keeping of receivership funds, the receiver must keep and deal with them as received, with that degree of care which is ordinarily exercised by reasonable and cautious men in transacting their own business of like importance; and, if the receiver, acting with such degree of care, deposits such funds in a bank of good standing and repute, he and his sureties are not. liable for loss due to subsequent failure of the bank. The other rule, relied upon by appellant, may be stated thus: When funds are in the hands of a receiver and he has no further duty in respect thereto except to preserve them, he cannot part with the custody thereof by depositing them in a bank, save at his own risk, without some order or authorization of the court so to do; and if he does deposit them in a bank of his own choice without such authorization, both he and his sureties are liable for loss due to a subsequent failure of the bank.