Bailey v. Farmers' Bank of White Plains

• Decision Date: 21 December 1928
• Citation: 227 Ky. 179,12 S.W.2d 312
• Parties: BAILEY et al. v. FARMERS' BANK OF WHITE PLAINS et al.
• Court: Kentucky Court of Appeals

12 S.W.2d 312

227 Ky. 179

BAILEY et al. v. FARMERS' BANK OF WHITE PLAINS et al.

Court of Appeals of Kentucky

December 21, 1928

Appeal from Circuit Court, Hopkins County.

Suit between W. N. Bailey and others and the Farmers' Bank of White Plains and others. From the judgment, the former appeal. Reversed, with directions.

H. F S. Bailey, of Madisonville, for appellants.

Fox &amp Gordon and Cox & Grayot, all of Madisonville, for appellees.

DRURY C.

The appellants on this appeal were the appellees on a former appeal of this case. See 221 Ky. 55, 297 S.W. 938. Upon such former appeal, the appellants were held to be entitled to a lien on $3,037.04 as the identified proceeds of $19,500 of bonds, which Bailey et al. had left with the bank for safe-keeping. On the return of this case this $3,037.04 was distributed among them. Thereupon Bailey et al. asserted the remaining $16,462.96, with interest, as general claims against the estate of this insolvent bank. The trial court declined to allow this as such; hence this appeal.

The state banking commissioner, as the representative of the Farmers' Bank of White Plains, together with other general creditors of the bank, conceiving the idea that, as Bailey et al. had elected to treat this as a bailment and to treat their relation to the bank as that of bailor and bailee, and this court having held that that was their relation, concluded that Bailey et al., having elected to take that position, were now estopped to claim they were creditors of the bank, and hence should not be allowed to file this balance as a general claim against the assets of this bank. They filed a pleading to that effect, to which Bailey et al. interposed a demurrer. The court overruled the demurrer, and thereupon Bailey et al. filed a pleading asserting their claims as general claims, to which the banking commissioner and those associated with him filed a demurrer, which the court sustained.

The action of the court in ruling on these demurrers was erroneous. This was a simple bailment for the benefit of the bailor. The relation of debtor and creditor was not created by the deposit of the bonds, but simply that of bailor and bailee, and Bailey et al. have never changed their position. The banking commissioner and those associated with him erroneously conceived the idea that they had, and, as we have said, filed a pleading to that effect, thus raising a false issue, that Bailey et al. had shifted their position and were now asserting that by leaving these bonds with the bank for safe-keeping they had made the bank their debtor. They led the attorneys for Bailey et al. off with them, and the court went along with the crowd, and held Bailey et al. could not after claiming the relation of bailor and bailee, now claim the relation of debtor and creditor. Attorneys for both sides have elaborately briefed and discussed that false issue here. The whole matter will be simplified by a consideration of the rights and duties of bailor and bailee.

One of the most important rights of the bailor is that upon the termination of the bailment, he shall have returned to him the identical thing bailed or the product thereof, or the substitute for that thing. See 6 C.J. 1139, § 92; 3 R. C. L 114, § 37; Schouler on Bailments and Carriers (3d Ed.) § 6; Story on Bailments ...