Opinion
Decided October 10, 1933.
Court of Appeals — Jurisdiction on appeal — Chancery case — Action to prefer special deposit, as trust, in bank being liquidated.
An action to have a preference declared, by reason of a special deposit of funds, in trust, for a specific purpose, is an action in chancery and appealable.
APPEAL: Court of Appeals for Stark county.
ON MOTION to dismiss.
Messrs. Black, McCuskey, Ruff Souers, for plaintiff.
Mr. John W. Bricker, attorney general, and Messrs. Herbruck, Shetler, Melchior Roach, for defendants.
This case comes before this court upon a motion filed by the plaintiff to dismiss the appeal heretofore perfected to this court by the defendants, the ground of the motion being that the action is not appealable to this court.
The petition alleges, in substance, that the defendant Ira J. Fulton, as superintendent of banks of the state of Ohio, is in charge of the liquidation of the American Exchange Bank of Canton, Ohio; that on the day prior to said Fulton taking over said bank for liquidation, the plaintiff, the Diebold Safe Lock Company, made a special deposit with the American Exchange Bank of the sum of $6,000, the petition alleging the same to be "a specific deposit and trust fund of cash for the purposes aforesaid," the purpose being the payment of a certain pay roll of the plaintiff company. It is further averred in the petition that the American Exchange Bank, or some of its officers, "caused the same wrongfully to be credited to the general payroll account of the plaintiff." The claim is that this was a special deposit and trust fund, and that, after the payment of the payroll checks, there remained the sum of $2,855.42. The petition avers the presentation of the claim to the superintendent of banks as a preference, and his rejection of the claim, presumably under Section 710-92 of the General Code of Ohio.
The answer, admitting the liquidation of the bank by Fulton, superintendent, the deposit of the $6,000, the payment of the payroll checks, the filing of the claim as a preferred claim, and its rejection, then denies the other allegations of the petition.
Upon a somewhat similar state of facts the Court of Appeals of Wood county, in In Re Liquidation of Exchange Bank of Bloomdale, 44 Ohio App. 385, 185 N.E. 848, stated in the opinion: "A motion has been filed by the claimant to dismiss the appeal on the ground that the case is not one in chancery, and that therefore this court does not have appellate jurisdiction thereof. The contention of Shoup is that he deposited with the bank for safe-keeping, and to hold for him in trust, $1,500 in Liberty bonds, which the bank received pursuant to Section 710-110, General Code, and he seeks by this proceeding to fasten a trust on the assets of the bank and to require an allowance of the same as a preferred claim. This court is of the opinion that the action is in chancery within the constitutional provision and is therefore appealable."
Counsel for plaintiff, frankly admitting the force of the opinion quoted, take the position that it was not well considered, and deem that phase of the case only incidental to the decision of the Court of Appeals of Wood county, and have asked this court to, and this court has, given further consideration to the question, although the holding in the Bloomdale case is, as stated, upon facts much similar to the facts in the case at bar, and seems to us right. In that case it was a deposit for safe-keeping in trust of Liberty bonds. In the instant case it was alleged to be a special deposit of trust funds for a particular purpose.
The question turns upon what a "chancery" case is, and determining whether or not it is appealable to this court.
The clear absence of a right to trial by jury upon such issue is not conclusive or fully determinative. Neither is the fact that the exact situation arises by virtue of a statutory enactment conclusive, or altogether controlling.
In the case of Harper Kirschten Shoe Co. v. S. B. Shoe Co., 16 Ohio App. 387, the first paragraph of the syllabus reads: "The question of the appealability of a case to the court of appeals under Section 6, Article IV of the Constitution, does not depend upon whether or not the right and remedy are created by statute, but upon whether the basic principle of the statute is equitable in character and based upon some equitable doctrine."
As said by the Supreme Court in the case of Wagner v. Armstrong, 93 Ohio St. 443, 450, 113 N.E. 397, "Appealable cases, therefore, must be such cases as are now recognized as equitable in their nature."
As stated in 16 Ohio Jurisprudence, 37, Section 13: "A statute may create a right, unknown to the pre-existing law, but of such a character that established equitable remedies are appropriate and necessary for its complete and adequate enforcement or protection. Such legislation does not in reality alter the principles of equity; it merely creates a new substantive right upon which the existing equitable principles automatically operate."
The determination of whether or not a claimant is entitled to preference in funds, such as are represented in this case, could not be had under the hard and fast rules of the common law. Such a situation as alleged in the petition, if true, should and would appeal to the conscience of a chancellor — should and would be considered by a court of equity. There is weight in the suggestion of counsel for the superintendent of banks that he occupies a position of trust toward all the creditors and stockholders of the bank which he is liquidating, and in the petition in this case it is stated and restated that this deposit was made as a trust fund.
It seems to us clear that the case is one in chancery, and, therefore, appealable to this court. The motion to dismiss the appeal will be overruled.
Motion to dismiss overruled.
SHERICK, P.J., and LEMERT, J., concur.