People ex rel. Russel v. Michigan Avenue Trust Co.

Mr. Justice McSurely delivered the opinion of the court. Mary J. Barbour filed her petition seeking to establish a preferred claim for $2,386.98 against the Michigan Avenue Trust Company in the hands of a receiver. Answer was filed by the receiver and upon consideration the court found that she was not entitled to a preferred claim and dismissed her petition without prejudice to her rights as a general creditor of the bank. The facts are not in dispute. Mary Barbour, the petitioner, obtained a judgment in the municipal court against W. H. Gentry and G. J. Hughes for $5,287.50 and execution was issued and returned not satisfied. December 15, 1920, plaintiff filed a creditor’s bill in the circuit court making Gentry and Hughes and the Michigan Avenue Trust Company defendants, an injunction was issued and served on all said defendants enjoining them from transferring or otherwise disposing of the money in said bank on deposit in the name of Gentry. February 17, 1921, the Trust Company filed its answer saying that on December 9, 1920, it had on deposit in the name of W. H. Gentry in a checking account $2,356.91, and in a savings account $30.07. July 21, 1921, the Michigan Avenue Trust Company was closed and August 9, 1921, John W. O’Leary was appointed receiver of said bank. October 20,1921, a decree was rendered on the above mentioned creditor’s bill in favor of Mary J. Barbour, and against Gentry and others wherein it was ordered that the Michigan Avenue Trust Company pay to her $2,386.98. A general bank deposit does not represent any specific currency or assets held by the bank but is in law and in fact a chose in action or debt due from the bank to the depositor on demand. Mutual Acc. Ass’n v. Jacobs, 141 Ill. 261. A judgment creditor by filing a creditor’s bill obtains no greater rights in the debts due the judgment debtor than the judgment debtor himself has. 15 Corpus Juris, page 401, sec. 62; Bonte v. Cooper, 90 Ill. 440; Tumy v. Mayer, 289 Ill. 458. To establish a right to the payment in full of a bank deposit as a preferred claim against an insolvent bank it must be shown not only that there was a basis in equity for the imposition of an equitable lien or trust but also that certain definite property either currency or other assets of the bank segregated as the object of the lien or trust has come into the hands of the receiver of the bank. Mutual Acc. Ass’n v. Jacobs, 141 Ill. 261; Bayor v. American Trust & Savings Bank, 157 Ill. 62; Lanterman v. Travous, 174 Ill. 459; Woodhouse v. Crandall, 197 Ill. 104. These rules bar petitioner as a preferred creditor. Gentry as a general depositor of the Trust Company was a creditor of the bank to the amount of his deposit, and would be entitled to the allowance of his claim in the receivership proceedings only as a general creditor of the bank. Petitioner’s creditor’s bill gives her a lien on no greater right than her judgment debtor Gentry bad. There was no segregation of Gentry’s deposit nor did the receiver take it subject to any equitable lien or trust. The value of petitioner’s lien would depend upon how much of the bank’s debt to Gentry might be paid. The debt was like any other chose in action having a changing cash value which is not fixed until ultimately paid. Petitioner, however, says that a receiver’s possession is subject to all valid liens existing on the property at the time of his appointment. Mulcahey v. Strauss, 151 Ill. 70, and that the filing of the creditor’s bill gave the complainants a lien from the date of filing, upon the property of the judgment debtor Gentry. Talcott v. Grant Wire & Spring Co., 131 Ill. 248; Hallorn v. Trum, 125 Ill. 247. But these and the other eases cited by petitioner are the ordinary cases where a creditor’s bill is filed against a judgment debtor and a receiver of his assets has been appointed and it is held that the receiver takes the property of the judgment debtor subject to the lien of the creditor’s bill. This is not such a case. The receiver here is not of the assets of the judgment debtor Gentry but of a third party, the bank. No cases are cited in which the third party, from whom a debt is due to the judgment debtor in a creditor’s bill, has become insolvent. Other cases are presented where the lien of a creditor’s bill attaches to certain physical property or a certain sum of money segregated and set apart but such facts and conditions are not present in the case before us. The injunctional order restraining Gentry and the bank from disposing of or transferring any deposit would not operate to segregate the fund or impress it with a trust so as to give the complainant in the creditor’s bill a preferred claim. This order did not change the character of the general deposit but operated on the conduct of the parties with reference to it. Upon the general principles announced in the cases first above cited and upon reason we hold that petitioner could only prosecute her claim as a general creditor. Another reason in this case for barring the petitioner as a preferred creditor is that the record does not show that Gentry had anything on deposit with the bank when, if ever, the lien of the creditor’s bill attached. The bank admitted a deposit in the name of Gentry on December 9, 1920. This was eleven days prior to the filing of the creditor’s bill but the filing of the bill does not create a lien until summons or subpoena has been served. Hallorn v. Trum, 125 Ill. 247. The record here is silent as to the time of service of summons or subpoena. So that, subsequent to December 9, 1920, when Gentry had a deposit, there was an indefinite period of time before the creditor’s bill became a lien, whenever that was, during which the amount of the deposit might have been changed or withdrawn altogether. The lien does not relate back to the date of the judgment so as to affect assignments between the date of the judgment and the time of the filing of the bill. 15 Corpus Juris 1443. The decree on the creditor’s bill entered some time after the receivership would not bind the receiver. In this state of the record there is nothing to support the petitioner’s claim to be a preferred creditor. For the reasons above stated the order of the circuit court is affirmed. Affirmed. Matchett, P. J., and Johnston, J., concur.