Alexiou v. Bridgeport-People's Savings Bank

• Decision Date: 06 January 1930
• Citation: 148 A. 374,110 Conn. 397
• Parties: ALEXIOU v. BRIDGEPORT-PEOPLE'S SAVINGS BANK.
• Court: Connecticut Supreme Court

148 A. 374

110 Conn. 397

ALEXIOU v. BRIDGEPORT-PEOPLE'S SAVINGS BANK.

Supreme Court of Errors of Connecticut.

January 6, 1930

Appeal from Superior Court, Fairfield County; Carl Foster, Judge.

Action of scire facias by Stelios Alexiou against the Bridgeport-People's Savings Bank, garnishee. Judgment for plaintiff, and defendant appeals. No error.

Arthur M. Comley, of Bridgeport, for appellant.

Israel J. Cohn, of Bridgeport, for appellee.

Argued before WHEELER, C.J., and MALTBIE, HAINES, HINMAN, and BANKS JJ.

HAINES, J.

The finding, which is unquestioned, discloses that on January 2d 1926, the defendant savings bank owed Katherine M. Alexiou $4,200 which she had deposited therein to her credit from time to time. On that date, the defendant executed and delivered to her four checks for $1,000 each and one check for $200 drawn by the defendant bank upon the Bankers' Trust Company of New York and payable to her. The checks have never been cashed, nor the proceeds thereof secured by any one, but they are now in the possession of the court, having been offered in evidence by the plaintiff, in whose possession they were at the time this action was tried. They are in the same form as when delivered by the defendant to Katherine M. Alexiou. It is not known how these checks came into the possession of the plaintiff.

The plaintiff brought an action against Katherine M. Alexiou on March 20, 1928, the writ and complaint being duly served upon her, and by garnishee process, upon this defendant. Judgment for $5,000 was rendered in favor of the plaintiff against Katherine M. Alexiou in that action on November 16, 1928, and on December 14, 1928, demand was duly made upon the defendant for such sum as was due from the defendant to Katherine M Alexiou, not exceeding the amount of said judgment; but the defendant refused to pay and denied any indebtedness to Katherine M. Alexiou. The trial court held that on December 14, 1928, the defendant was indebted to Katherine M. Alexiou for $4,200, and gave the plaintiff judgment therefor against the defendant with interest from that date, and decreed that upon payment of the aforesaid sum, the defendant be discharged from all liability to Katherine M. Alexiou to the full face value of the aforesaid checks. This judgment was based upon the conclusion that the checks were not presented for payment within a reasonable time after their issue, and that the defendant was therefore discharged of liability thereon under the provisions of General Statutes, § 4544, and so when the process of foreign attachment was served upon it, March 20, 1928, the defendant was the trustee and debtor of Katherine M. Alexiou. These conclusions are assigned as error, as are also the overruling of the claims of the defendant that the indebtedness of the defendant to Katherine M. Alexiou ceased at the time the checks were executed and given to her, January 2, 1926; that the failure to present the checks within a reasonable time has not released the defendant from liability on the checks to the rightful holder thereof; that neither at the time of the service of the foreign attachment, nor at the time of the demand in this action, did the defendant have in its hands money belonging to Katherine M. Alexiou; and that the defendant is entitled to judgment.

A " check" is defined by our Negotiable Instruments Act as a bill of exchange drawn on a bank and payable on demand, and except as otherwise provided in that chapter, the provisions applying to a bill of exchange payable on demand apply also to checks. General Statutes, § 4543.

Deposits in an ordinary commercial bank create the relation of debtor and creditor between the bank and the depositor. The money at once becomes the property of the bank and is thereafter held by it, not as the agent, but as the debtor of the depositor, so that when and if the deposit is repaid, it is done with the bank's funds and not with the funds of the depositor. Booth v. Prete, 81 Conn. 636, 637, 71 A. 938, 20 L.R.A. (N. S.) 863, 15 Ann.Cas. 306; Bridgeport Projectile Co. v. City of Bridgeport, 92 Conn. 316, 320, 102 A. 644; Baldwin's Bank v. Smith, 215 N.Y. 76, 109 N.E. 138, L.R.A. 1918F, 1089, Ann.Cas. 1917A, 500; Commercial Bank v. Armstrong, 148 U.S. 50, 59, 13 S.Ct. 533, 37 L.Ed. 363; First National Bank of Murfreesboro v. First Nat. Bank of Nashville, 127 Tenn. 205, 154 S.W. 965.

When Katherine M. Alexiou deposited the $4,200 in the defendant savings bank, however, a somewhat different relation was created. Savings banks in this state are incorporated agencies, without capital stock, for receiving and loaning the money of depositors, and the assets of the corporation belong to all the depositors in proportion to their deposits. While the bank thus becomes in a sense the debtor of the depositor, it is also his agent, since the depositor retains the equitable ownership of the deposit while transferring the legal title to the bank for the purpose of investing and conserving it for him. In this respect a distinction has always been recognized, in this state, between commercial banks or banks of deposit and our mutual savings banks. Bank Commissioners v. Watertown Savings Bank, 80 Conn. 261, 70 A. 1038; Osborne v. Byrne, 43 Conn. 155, 21 Am.Rep. 641; Wood v. Connecticut Savings Bank, 87 Conn. 341, 345, 87 A. 983; Lippitt v. Thames Loan & Trust Co., 88 Conn. 185, 90 A. 369; Price v. Society for Savings, 64 Conn. 365, 366, 30 A. 139, 42 Am.St.Rep. 198; Brown v. Clark, 80 Conn. 421, 423, 68 A. 1001.

The obligation of the defendant savings bank to Katherine M. Alexiou was to pay her the amount of her deposit upon proper demand, and when and if it did pay her, it did so by paying her proportional share out of its general fund to which it had the legal title, and not with the moneys which she had deposited. The bank was not a bailee.

Primarily, a debt is payable in money, and this must be assumed in those cases where an agreement to receive something other than money is not shown. Morgan Paving Co. v. Carroll, 211 Ala. 121, 99 So. 640; Farmers L and T Co. v. Canada Ry. Co., 127 Ind. 250, 26 N.E. 784, 785, 11 L.R.A. 740; Jaspar County Savings Bank v. Saheroff, 205 Iowa, 774, 218 N.W. 486, 487; Bullock v. Horn, 44 Ohio.St. 420, 7 N.E. 737, 741. Although some inference may arise in the present case from the identity in amount of the deposits and the checks, there are no facts in the record before us from which we can conclude as an established fact that Katherine M. Alexiou accepted these checks in full payment and discharge of the debt of the bank to her, with full understanding that she was thereafter to rely entirely upon...