Bank of Illmo v. Sturdivant Bank

• Decision Date: 07 January 1936
• Citation: 89 S.W.2d 560,232 Mo.App. 102
• Parties: BANK OF ILLMO, APPELLANT, v. STURDIVANT BANK, O. H. MOBERLY, COMMISSIONER OF FINANCE IN CHARGE OF THE LIQUIDATION OF THE STURDIVANT BANK, RESPONDENT
• Court: Missouri Court of Appeals

89 S.W.2d 560

232 Mo.App. 102

BANK OF ILLMO, APPELLANT, v. STURDIVANT BANK, O. H. MOBERLY, COMMISSIONER OF FINANCE IN CHARGE OF THE LIQUIDATION OF THE STURDIVANT BANK, RESPONDENT

Court of Appeals of Missouri, St. Louis

January 7, 1936

Appeal from Circuit Court of Cape Girardeau County, Missouri.--Hon Frank Kelly, Judge.

REVERSED AND REMANDED (with directions).

Judgment reversed and cause remanded.

Ray B Lucas for appellant.

(1) A bank may transfer fund upon an oral demand of a depositor even though the demand be made over the telephone. Blackshaw et al. v. French, 45 S.W.2d 916. (2) When a depositor makes proper demand on a bank for his account, or a part of it in said bank, and the bank refuses to honor the request of the depositor, and thereafter the bank fails and has sufficient funds on hand at the time of its failure with which to pay the demand of the depositor and when such funds pass into the hands of the finance commissioner, then the depositor is entitled to a preference for the amount of his demand. Claxton v. Cantley, Commissioner, 297 S.W 975; Hiatt v. Miller Bank, 34 S.W.2d 532; Johnson v. Farmers Bank Clarksdale, 11 S.W.2d 1090; Gover v. Cantley, 56 S.W.2d 146. (3) When a depositor properly demands payment from the bank of his account, or a part of his account, and requests payment in specific denominations of currency or silver and the bank refuses the demand of the depositor without stating that the demand is refused because the money is demanded in certain denominations, but refuses to honor the demand because the bank cannot pay it for any other reason expressed or unexpressed at the time, and thereafter the bank fails and is holding sufficient assets which pass into the custody of the finance commissioner, so that the depositor could have been paid, then the depositor is entitled to a preference. 7 C. J., p. 665; 18 C. J., p. 574; Levy v. New York Commercial Trust Company, 156 New York Supplement 295; Donijanovic v. Hartman, 169 Mo.App. 204.

John A. Ferguson and R. F. Baynes for respondent.

The court did not err in denying the preference to appellant, Bank of Illmo. There was not a sufficient demand made upon respondent before the closing of the Sturdivant Bank. Montana Life Insurance Company v. American Surety Company, 8 F.2d 801; 5 Words and Phrases (1st Series) 4060; Foss v. Norris, 70 Me. 117-118; 4 Words and Phrases (3rd Series) 819.

HOSTETTER, P. J. Becker and McCullen, JJ., concur.

OPINION

HOSTETTER, P. J.

This cause originated in the circuit court of Cape Girardeau County, Missouri, by the plaintiff filing its petition therein on May 11, 1932, setting out its claim for preference against the Sturdivant Bank of Cape Girardeau, Missouri, for the sum of $ 500. It is conceded that the petition was filed in due time and is in conventional form and that all the antecedent steps were regular and were done in due time as required by the statutes.

The plaintiff bank was located at Illmo, about seven miles from Cape Girardeau. The last day of the life of the Sturdivant Bank was Saturday, November 5, 1932. It did not re-open for business on Monday, November 7, 1932, for the reason that it was that day placed by its board of directors in the hands of the State Finance Department for liquidation.

At the close of business on November 5, 1932, the plaintiff bank had on deposit in defendant bank the sum of $ 706.96. It filed its claim with the Special Deputy Commissioner for $ 500 as a preferred claim and for $ 206.96 as a common claim. The Sturdivant bank, at the time it closed, had sufficient cash and assets in its possession, or in its corresponding bank, far in excess of the $ 500 claimed as a preference.

We quote the following from the statement made on behalf of respondent, the Sturdivant bank:

"The only question involved in this appeal is whether or not under the facts, the Circuit Court of Cape Girardeau County, Missouri, was justified in denying appellant's application for preference. The conceded facts are that appellant kept an account with the Sturdivant Bank, as a matter of convenience in securing change at times it desired, and that on several occasions it had called Sturdivant Bank by telephone and had money of certain denominations sent to it. In fairness, we are willing to concede that appellant, in telephoning for the money on the occasion mentioned in this cause was along the usual and regular course followed by the appellant and the Sturdivant Bank, but insist that the demand made by appellant for $ 500 in a particular specie was not a demand for its deposit."

The only oral testimony given in the case was by Charles J. Palisch, cashier of the plaintiff bank, and Theodore Horn, President of the plaintiff bank.

The following facts were shown in the testimony:

The Bank of Illmo had, for two or three years prior to the closing of the Sturdivant Bank, carried an ordinary deposit account in the Sturdivant Bank. Its purpose in carrying this account was because it was handy to get cash and change at times when it wanted it. The usual amount of the account was around $ 1,000. The custom between the two banks in respect to this account was as follows: The cashier, or some other attache of the Bank of Illmo, would call up by telephone in the morning, during banking hours, usually between nine and ten o'clock, and advise the cashier of the Sturdivant Bank how much money they wanted, and the Sturdivant Bank would send it by mail to the Bank of Illmo and it would reach there that afternoon. No check would be sent, but the practice in the Sturdivant Bank would be that the account would be charged with the amount of money desired and sent, together with the mailing and insuring expense, which would be charged off of the account of the Bank of Illmo. If the deposit account was, say, $ 1,000, and the Bank of Illmo wanted $ 500, the telephone request would be made and the money would be sent by mail and the $ 500 plus the expense, usually $ 1.00 or thereabouts, would be charged against the $ 1,000 account, the total charge being covered by a debit slip. Their method of doing business was illustrated by seven debit slips, which were put in evidence, covering a period between August 1, 1932, and October 14, 1932, inclusive. These exhibits show, among other things, one withdrawal of $ 25 in dimes; another in currency of $ 500 and silver $ 100, postage and insurance $ 1.19; another in currency $ 300 and silver $ 200, postage and insurance $ 1.12. No objection had ever been made on behalf of the Sturdivant Bank by its officers to this method of withdrawing money by telephone, and had been in vogue for the two or three years while the account was carried.

In respect to the $ 500 in controversy, it was shown that the call by phone was made by Mr. Palisch and the telephone conversation was carried on between him and Mr. Bender cashier of the Sturdivant Bank. Mr. Palisch testified that he told Mr. Bender to send them $ 500 in one dollar bills; that Mr. Bender replied that they had a big pay roll that day and couldn't spare the money; that he gave no other reason for not sending the money; that this conversation took place between ten and eleven o'clock in the forenoon of Saturday, November 5; that Bender didn't object to the method of trying to withdraw the money over the telephone but merely said they had a heavy pay roll and couldn't spare it. On cross-examination witness Palisch said: "He (Bender) told me they were having a heavy pay roll to meet and they would not be able to do it; couldn't spare the money," also, "Mr. Bender didn't say anything with regard to whether or not he...