Barge, Liquidator v. Town of Dunnellon

In this case appeal was from a decree in favor of the appellee against the appellant wherein it was held that certain funds in the hands of the appellant as Liquidator constituted a preferred claim in favor of the appellee.

The Town of Dunnellon had certain outstanding bonded indebtedness. It sold its electric light plant to Florida Power Corporation and it was agreed between the Florida Power Corporation and the municipal authorities that $30,000 of the purchase price would be used to retire $30,000 of the bonds of the municipality. An agreement was entered into between Florida Power Corporation and the Municipality that the sum of $30,000 should be deposited as a special trust fund in escrow to be paid out in liquidation of the bonds with other conditions appearing in the contract. The fund was transmitted to the Bank of Dunnellon with a letter signed by Florida Power Corporation and the Town of Dunnellon by its proper officers nominating and appointing Bank of Dunnellon as the escrow agent of Florida Power Corporation and of the Town of Dunnellon for the purpose of holding the fund and the distributing the same in accordance with the contract between the parties. At the bottom of that letter the record shows that the Bank of Dunnellon entered and subscribed to the following:

"November 7th, 1929.

"The undersigned, the Bank of Dunnellon, hereby accepts the appointment as escrow agent in accordance with the foregoing terms and conditions embodied in the foregoing and in the agreement made and entered into on November 7th, 1929, between Florida Power Corporation and the Town of Dunnellon.

Bank of Dunnellon (Seal) By G. W. Neville, Cashier J. B. Baskin, President."

It is alleged that the funds so deposited were wrongfully commingled by the Bank with its funds. Under the terms of this deposit and the acceptance, the title to the fund was never vested in the Bank of Dunnellon. It never became the creditor of either the Town of Dunnellon or of the Florida Power Corporation, by reason of such deposit.

It is contended that the Bank of Dunnellon could not accept the fund under the terms and conditions under which it was deposited because it was not authorized under the law to do a trust business. We think this contention is untenable because it is immaterial whether the Bank of Dunnellon was authorized to do a trust business or not. If the Bank assumed to act as Escrow Agent (and we do not think the law prohibited its acting as such agent), and received a fund to be held in escrow, as it did in this case, it acquired no title to that fund and, even if its action in this regard had been unlawful because of its lack of authority to do a trust business, it could not be maintained that it acquired title to property which none of the parties ever intended should be passed to it simply because it was without lawful authority to act in the capacity in which it assume to act.

The decree of the chancellor should be affirmed upon authority of the opinion and judgment in the case of Newsome. Liquidator, v. Accacia Mutual Life Association, et al.,102 Fla. 567, 136 So. 389, and cases there cited. It is so ordered.

Affirmed.

WHITFIELD, P. J., and BROWN, J., concur.

TERRELL, J., concurs in the opinion and judgment.

DAVIS, C. J., and ELLIS, J., dissent.