THE FIDELITY AND DEPOSIT COMPANY OF MARYLAND vs. WILLIAM A. WILSON, ET AL. - G.R. No. 2684

THE FIDELITY AND DEPOSIT COMPANY OF MARYLAND vs.

WILLIAM A. WILSON, ET AL.

G.R. No. 2684            March 15, 1907

The plaintiff filed a complaint against Wilson and The American Surety Company asking that judgment be rendered against Wilson for the amount having been paid by plaintiff to the Government under plaintiff's surety bond, that there be applied to the payment of said judgment the said amount found in possession of Wilson and that said plaintiff be preferred in its right to the said money and to receive the same; and that a depositary be named by the court for the purpose of caring for and administering said amount during the pendency of the case. H.D. Terrell filed a complaint as intervenor in the case, alleging that the defendant Wilson had ceded and transferred to the said Terrell all of his rights. Terrell claims the right of ownership in and to the said sum and asks that the same be delivered to him as the legitimate owner to the exclusion of the other parties in the case. The Fidelity and Deposit Company of Maryland, the plaintiff in the principal cause, and The American Surety Company of New York together in cooperation and against the claim of the intervenor Terrell, alleging on their part, better right that the intervenor to receive the sum in question, asked that the said sum be delivered to them in equal shares and portions as part payment and on account of the amounts which they had paid respectively to the Government as sureties on the bond of Wilson.

ISSUE:

Whether or not the said sum be delivered to the plaintiff in equal shares and portions as part payment and on account of the amounts which they had paid respectively to the Government as sureties on the bond of Wilson.

HELD:

Yes. The transfer by itself did not produce nor could it produce the effect of transfer to Terrell of the ownership of the funds so transferred and which were then in the possession of the said Treasurer. To have this effect, it would have been necessary that the delivery of the funds had been made directly Terrell, which fact has not been proved at any time. The funds were in the possession of Treasurer Branagan and afterwards were transferred to the possession of the depositary appointed, by the court where such funds now are, and this without their ever having been taken possession of the intervenor Terrell. It is not alleged, nor it is claimed by Terrell, that the delivery of the funds was ever made in any manner recognized by the law.

Neither of the two creditors should enjoy preference with regard to the other. Preference is determined by the nature of the credit in some cases and by the priority of date in others. The two creditors should be paid of pro rata from the funds in question and without consideration of the dates.