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Cochrane v. Florida East Coast Ry. Co.

Florida Supreme Court, Division B

December 19, 1932


Action by the Florida East Coast Railway Company against J. P. Cochrane, as liquidator of the Commercial Bank & Trust Company, a corporation doing business in West Palm Beach. From an adverse judgment, defendant appeals.

Affirmed. [107 Fla. 432]Appeal from Circuit Court, Palm Beach County; C. E. Chillingworth, judge.


Page 218

Winters, Foskett & Wilcox, of West Palm Beach, for appellant.

Robert H. Anderson and John B. L'Engle, both of Jacksonville, for appellee.



This suit was instituted in May, 1927, by petition of appellee praying that it be decreed to have a preferred claim against appellant and that said claim be paid from cash assets held by appellant as liquidator of Commercial Bank & Trust Company. A demurrer to the petition was overruled, answer was filed, testimony was [107 Fla. 433] taken, and on final hearing the relief prayed for was granted. This appeal is from that final decree.

The salient facts out of which the instant cause arose may be summarized as follows: The Commercial Bank & Trust Company of West Palm Beach failed June 28, 1926, and was placed in the hands of W. H. Tunnicliffe, who was later succeeded by J. P. Cochrane as liquidator. On June 23, 24, 25, and 26, 1926, respectively, the appellee purchased cashier's checks from said bank, paying cash or its equivalent for them, and it now predicates its preferred claim on said cashier's checks, it being alleged that at the time they were purchased the Commercial Bank & Trust Company was in fact insolvent or in an unsound condition, and that said condition was know to its officers.

The final decree is first challenged on the ground that the petition does not allege that petitioner's claim was filed with the liquidator in proper form and rejected by him before bringing this suit.

To support his contention appellant relies on section 4163, Revised General Statute of 1920, and sections 6103 and 6104, Compiled General Laws of 1927, sections 193 and 194, title 12, U.S. Code (12 USCA ยงยง 193, 194), Crowell v. Federal Reserve Bank of Dallas, Texas et al. (C. C. A.) 12 F. (2d) 259, and Berrien County Bank v. Alexander, 28 Ga.App. 55, 110 S.E. 311. It is true that the court in the preceding cases construed the federal and Georgia statutes on insolvency to require the petition in a suit like this to allege that the petitioner's claim had been duly filed with and rejected by the authorized authority before bringing suit, but the federal and Georgia statutes, while similar in many respects, are materially different in others from ours, so these cases are not controlling.

Our statute, section 6104, Compiled General Laws of 1927, does not in terms require that the petition negative the presentation and rejection of petitioners claim by the [107 Fla. 434] liquidator as a prerequisite to bringing suit. In Walker v. McNeil, 68 Fla. 181, 66 So. 994, this court in effect held that no such prerequisite is necessary. The record does not disclose that this question was considered by the lower court, and counsel contends that it was raised here the first time. It was not directly raised in the answer nor the demurrer to the petition, though the latter was filed prior to the expiration of one year from the closing of the bank. The record further discloses that the appellee actually filed, as required by law, proof of his claim with the liquidator, and that same was rejected by him. We therefore think the petition is invulnerable to this attack, but, if it was essential to allege the filing of the proof of appellee's claim and rejection thereof by the liquidator, under the facts as shown to exist in this case we would be compelled to hold such failure of allegation as harmless.

The petition is next challenged because of the use of the conjunctive, alternative phrase 'and/or' in charging insolvency of the bank, it merely alleging the 'insolvency and/or unsound condition' of the bank and knowledge of such condition by its officers. It is contended that the petitioner should charge and prove hopeless insolvency.

There are degrees in insolvency. In Garrett v. Tunnicliffe et al. (Fla.)145 So. 213, decided this date, we drew the distinction between mere 'insolvency' and 'hopeless insolvency,' but that distinction is not material to the disposition of this case. To charge in effect that the bank was insolvent and that condition was known to its officers is ample to put them on notice, it shows the intention of the pleader, and the burden of proving the degree of insolvency is imposed on the petitioner. This holding is supported by the dominant authority. St. Louis & San Francisco R. Co. v. Johnston,133 U.S. 566, 10 S.Ct. 390, 33 L.Ed. 683; Walker v. McNeil,68 Fla. 181, 66 So. 994; Western German Bank v. Norvell (C. C. A.)134 F. 724; ...

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