American Surety Co. of N.Y. v. Normandy State Bank

• Decision Date: 05 January 1943
• Docket Number: No. 26154.,26154.
• Citation: 167 S.W.2d 436
• Parties: AMERICAN SURETY COMPANY OF NEW YORK, A CORPORATION, APPELLANT, v. NORMANDY STATE BANK, A CORPORATION, RESPONDENT.
• Court: Missouri Court of Appeals

167 S.W.2d 436

AMERICAN SURETY COMPANY OF NEW YORK, A CORPORATION, APPELLANT, v. NORMANDY STATE BANK, A CORPORATION, RESPONDENT.

No. 26154.

St. Louis Court of Appeals, Missouri.

Opinion filed January 5, 1943.

Appeal from the Circuit Court of St. Louis County. — Hon. John A. Witthaus, Judge.

AFFIRMED.

Bryan, Williams, Cave & McPheeters for appellant.

(1) Plaintiff, upon making payment under its policy of the loss sustained by the deputy commissioner, became subrogated to the rights of the deputy commissioner against all persons and corporations, including the bank. Capen v. Garrison, 193 Mo. 335; 60 C.J. 714; 5 Pomeroy's Equity Jurisprudence, sec. 2343, page 5183; Berry v. Stigall, 253 Mo. 690. (2) The bank, having been at all times solvent and having mixed and mingled the deposits made by the deputy commissioner of finance with its own moneys, and having used the commingled moneys in its own business, became a debtor of the deputy commissioner for the amount of the deposits. Am. Surety Co. of New York v. Normandy State Bank, etc., 108 Fed. (2d) 819; In re Mount Vernon Bank, 334 Mo. 549; Glidden v. Gutelius, 96 Fla. 834, 119 So. 140; Leach v. Sanford State Bank, 207 Iowa, 478; Andrews v. Farmers' Savings Bank, 207 Iowa, 394, 223 N.W. 171; Evans v. French, 222 Mo. App. 990; Thomson v. Bank of Syracuse, 220 Mo. App. 805; Nichols v. Bank of Syracuse et al., 220 Mo. App. 1019, 1026; Security Nat. Bank Savings & Trust Co. v. Moberly, 340 Mo. 95, 103, 105; Sec. 7926, R.S. Mo. 1939; Brown v. Maguire's Real Estate Agency, 343 Mo. 336, 345. (3) The undisputed facts show that there was not an accord and satisfaction of the claim of the plaintiff nor a compromise of its claim. Wilson v. Hartford Fire Ins. Co., 300 Mo. 1; In re Mosbacher, 31 S.W. (2d) 225. (4) Plaintiff, by agreeing that the amount of the claim against it should be reduced by the sum of $1991.12, and by delivering the draft notwithstanding that the deputy commissioner would not execute the assignment tendered to it, did not waive its rights and is not estopped to assert them. (5) The plea in the answer of plaintiff in the suit of the deputy commissioner against it that it was entitled to a reduction of the claim against it in proportion to the amount that he loss bore to the total amount of all valid and collectible insurance covering the loss does not estop the plaintiff from pursuing its claim in this case. (6) Plaintiff is not estopped from claiming that the judgment in the action of the deputy commissioner against it is not res adjudicata of the issues herein. Dibert v. D'Arcy, 248 Mo. 617, 661; M.K. & T. Ry. Co. v. Am. Surety Co. of New York, 291 Mo. 92, 109; Walker v. Manske, 10 S.W. (2d) 316, 317; Mayer v. Nischwitz, 198 Mo. App. 101, 105; State ex rel. Hospes v. Branch, 154 Mo. 592, 604; Kirk, Admr., v. Met. Life Ins. Co., 225 Mo. App. 757, 760. (7) As the bank used the deposits made by the deputy commissioner constantly, the property right which the deputy commissioner had was a lien against the property in which the deposits were invested. Sec. 7926, R.S. Mo. 1939; Glidden v. Gutelius, 96 Fla. 834; Am. Surety Co. v. Normandy State Bank, 108 Fed. (2d) 819, 823.

Otto O. Fickeissen, Ivon Lodge and Fordyce, White, Mayne, Williams & Hartman for respondent.

(1) The assertions in appellant's brief that, "the plaintiff in this case was forced to pay the full amount of the claim, with interest on it," that "there is nothing at this point showing that the plaintiff agreed to give up any of its rights of subrogation or that the deputy commissioner or anyone else gave up any of its rights or yielded anything," and that "under a threat of the levy of an execution ... the plaintiff paid the entire claim of the deputy commissioner," are entirely erroneous and not supported by the record. (2) Plaintiff is estopped by its conduct from prosecuting an action against defendant who dismissed its suit against the National Surety Corporation in reliance upon the settlement. (a) Subrogation is an equitable remedy. Lincoln v. Du Pont de Nemours & Co., 224 Mo. App. 1183, 32 S.W. (2d) 292; Peck v. Fillingham's Estate, 199 Mo. App. 277, 202 S.W. 465. (b) Where a party with knowledge of the facts assents to, or participates in, judicial proceedings without objection, he is generally bound by such proceedings as against one who has been misled to his injury by conduct, especially where the party against whom the estoppel is claimed has accepted benefits or enjoyed rights under judgment, decree or order rendered thereon. 31 C.J.S. 368-369, par. 115, also 31 C.J.S. 366, pars. 114, 362, pars. 113-114, and same text, 347, pars. 101, 341, par. 107. (3) There was a complete accord and satisfaction arrived at when attorneys representing the Normandy State Bank in its dual capacities agreed with attorneys for American Surety Company and the attorney for the National Surety Corporation as to how both suits were to be finally settled. (4) Plaintiff's right of subrogation, if any existed, was an entirety and by accepting $1991.12 from this defendant the subrogation was paid. Where plaintiff's demand is an entirety though consisting of several items, he may not split it up into separate parts or claims. Broyles v. Anchor, 78 S.W. (2d) 459; Cleveland v. Laclede-Christy, 113 S.W. (2d) 1065. (5) This plaintiff refused to try its case in the state courts, but now after it frankly admits that it could not recover in the Federal District Court in the present action, asks the state courts to hold contrary to the Federal Court, while payment of the judgment, upheld by that alleged erroneous opinion, forms the basis of this suit. (a) If plaintiff's view of the law is correct, then the first judgment would not have been obtained had the matter remained in the state courts. This defendant could then have been free to prosecute its suit for the full loss against the National Surety Corporation. (b) Even had it failed to prove the loss under the burglary clause, at least $4000 could then have been obtained without litigation because the National Surety Corporation was ready to pay on the robbery clause, while under the settlement made the latter paid only $2447.34. (c) Plaintiff selected its forum and should not now be-permitted to switch, after the rights of defendant have been established, to another forum where a different holding would cause a loss. (6) Plaintiff's brief repeatedly speaks of "deposits" made by the Normandy State Bank, Commissioner in Charge, in the Normandy State Bank. This merely represents plaintiff's interpretation of the legal effect of the method employed to liquidate the State Bank of Anglum. In fact, Normandy State Bank, Deputy Commissioner, never made any deposit of Anglum funds with itself as the term "deposit" is ordinarily used. (a) Normandy State Bank, Deputy Commissioner in charge of the Affairs of the State Bank of Anglum, at all times administered the Anglum money as a trust fund under the supervision of Division No. 1 of the Circuit Court of St. Louis County. Secs. 5223-5326 and 5330, R.S. Mo. 1929 (now reenacted as Secs. 7917-7920 and 7924, R.S. Mo. 1939); Craig v. Stacy, 330 Mo. 569, 50 S.W. (2d) 104, l.c. 106. (b) Plaintiff says there was nothing improper in the method employed in the present case, yet contends that as a result of that administration the funds lost their trust character and became general deposits. Such an interpretation flies directly in the teeth of the legislative intent in designating the character of the funds and method of administration. (7) The old rule that in order to constitute a special deposit the thing deposited must be retained has been modified when applied to moneys, so that money in a special deposit need not be earmarked or retained. Am. Surety Co. v. Normandy State Bank, 108 Fed. (2d) 819; In re North Missouri Trust Co. (Mo. App.), 39 S.W. (2d) 413; Holland Banking Co. v. Mount Vernon Bank, 334 Mo. 549, 66 S.W. (2d) 850; State v. Bank of Southeast Missouri (Mo.), 107 S.W. (2d) 1, 2; San Diego Co. v. California Nat'l Bank, 52 Fed. 59; Fidelity Bank & Trust Co. v. Ely-Walker Dry Goods Co. (Mo. App.), 77 S.W. (2d) 480; In re Sturdevant Bank (Mo. App.) 89 S.W. (2d) 89; Stone v. St. Louis Union Trust Co., 183 Mo. App. 261, 166 S.W. 1091; Brown v. Maguire's Real Estate Agency (Mo. App.), 101 S.W. (2d) 41, l.c. 48. In the case last cited Judge BECKER dissented, deeming the opinion in conflict with the Supreme Court opinion in case of Security National Bank Savings & Trust Co. v. Moberly, 101 S.W. (2d) 33, 340 Mo. 95 (relied on by appellant) and the case was certified to Supreme Court, which affirmed the Court of Appeals as to this feature of the case, reported in 121 S.W. (2d) 754. (8) The Normandy State Bank, Deputy Commissioner of Finance in charge of the affairs of the State Bank of Anglum, at all times had title to the Anglum funds in its representative capacity, and the loss of the funds was covered by American Surety Company's policy of insurance. Title to this fund never passed to the Normandy State Bank in its individual capacity. Same cases as cited under Point (7) (9) The plaintiff here, "with full knowledge of the nature of the interest of the named insured, recognized such interest as sufficient to support a policy, and hence it ought not now to be permitted to question the sufficiency of such interest." Am. Surety Co. v. Normandy State Bank, 108 Fed. (2d) 819, 822; Franklin v. National Ins. Co., 43 Mo. 491.

SUTTON, C.

This is an action whereby plaintiff, American Surety Company of New York, seeks to recover of defendant, Normandy State Bank, by way of subrogation, a portion of the amount it paid to satisfy a judgment, which defendant in its representative capacity as deputy commissioner of finance in charge of the affairs of the State Bank of Anglum had obtained against plaintiff. There was a judgment for defendant, and plaintiff appeals.

The facts, though very much involved, are undisputed.

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