American Bank v. People's Bank

• Decision Date: 06 November 1923
• Docket Number: No. 18308.,18308.
• Citation: 255 S.W. 943
• Parties: AMERICAN BANK OF DE SOTO v. PEOPLE'S BANK OF DE SOTO et al.
• Court: Missouri Court of Appeals

255 S.W. 943

AMERICAN BANK OF DE SOTO v. PEOPLE'S BANK OF DE SOTO et al.

No. 18308.

St. Louis Court of Appeals, Missouri.

November 6, 1923.

Appeal from Circuit Court, Jefferson County; E. M. Dearing, Judge.

"Not to be officially published."

Action by the American Bank of De Soto against the People's Bank of De Soto and Frank Dietrich, Special Deputy Bank Commissioner. From a judgment against it, plaintiff appeals. Affirmed.

Clyde Williams, of Hillsboro, for appellant.

T. E. Francis, of St. Louis, Frank Dietrich, of Hillsboro, and J. F. Evans, of St. Louis, for respondents.

SUTTON, C.

The defendant, People's Bank of De Soto, is an insolvent banking institution in charge of Frank Dietrich, special deputy bank commissioner, appointed to assist in liquidating the business and affairs of said bank, and by this action, plaintiff, American Bank of De Soto, seeks to establish a trust against the funds in charge of such deputy bank commissioner for the sum of $5,417.37, the amount of plaintiff's claim against defendant, and to have such claim adjudged entitled to preference and priority of payment out of the assets of the defendant bank.

The, cause was submitted and determined in the trial court upon a statement of the facts whereby the parties agreed:

"That plaintiff is and was at all times mentioned in the petition a corporation engaged in and doing a general banking business at De Soto, Jefferson county, Mo. That on the 30th day of December, 1920, and for a long time prior thereto, defendant was doing a general banking business in the same city. That on the 3d day of January, 1921 (said bank having been closed for business on the evening of December 30, 1920), the bank commissioner of the state of Missouri took charge of the business and affairs of the defendant bank, after which Frank Dietrich was appointed to assist in liquidating the business and affairs of said bank and is still in charge thereof.

"That it had been the custom for years between plaintiff and defendant bank to clear or exchange bills and checks which each had received on the other and settle the difference. That on the 30th day of December, 1920 (on which day said People's Bank was closed and has not since resumed business), plaintiff, in the due course of business and for a valuable consideration, had come into possession of and had for collection and settlement a great number of checks drawn by the solvent customers of the People's Bank on their accounts in said bank; all of which customers had to the credit of their accounts amounts sufficient to pay said checks, except $878.92, to which amount said checks were overdrafts, and which amount of overdrafts have since been made good and paid said bank except $229.20. That upon the clearing or exchanging checks on that day the balance due from the defendant bank to the plaintiff bank was $5,414.72. That the plaintiff bank turned over to the defendant bank, in clearing, the cheeks which it had received against defendant and received from defendant the checks which it had against plaintiff, and the difference made the balance as above stated, for which balance defendant bank delivered to plaintiff a draft on the Central National Bank of St. Louis, which draft was not paid but protested, and the protest fees are $2.65. That the checks so received by defendant from plaintiff were charged out of the accounts of the various depositors who had drawn them. That plaintiff was not and never had been a depositor in the defendant bank. That on said date and on the day the bank closed there was between six and seven thousand dollars in cash in the defendant bank.

"That there is now due on account of said balance and protest fees, from defendant to plaintiff, the sum of $5,417.37. That claim for said amount was properly presented in due time to the said deputy bank commissioner for allowance which claim was by him allowed."

Whereupon it was adjudged by the court that the plaintiff's claim was not entitled to preference or priority of payment, and the plaintiff appealed.

The plaintiff, in support of its contention that the assets of the People's Bank should be impressed with a trust in favor of the plaintiff for the amount of plaintiff's claim, argues that the depositors' checks were presented to the defendant bank for collection, and that it was thereby constituted the agent of the plaintiff bank for the collection of the checks, and that the action of the defendant bank in accepting the checks and charging the accounts of the depositors with the amounts of the checks was the same as if it had paid the money over the counter to itself as agent for the plaintiff bank, and that the general assets of the bank having received the benefit of the transaction, they should be charged with said amounts.

The argument is more commendable for its ingenuity than for its soundness. There is no rule of law better settled than that the relationship between a bank and its depositor is one of debtor and creditor. When a deposit is made in a bank, the funds deposited become the funds of the bank, and no trust relationship whatever is established between the bank and the depositor. The deposit becomes an ordinary indebtedness, not a trust fund. W...