Bank of Republic v. Republic State Bank

• Decision Date: 17 February 1930
• Docket Number: No. 4683.,4683.
• Citation: 24 S.W.2d 678
• Parties: BANK OF REPUBLIC v. REPUBLIC STATE BANK et al.
• Court: Missouri Court of Appeals

24 S.W.2d 678

BANK OF REPUBLIC v. REPUBLIC STATE BANK et al.

No. 4683.

Springfield Court of Appeals. Missouri.

February 17, 1930.

Appeal from Circuit Court, Greene County; Warren L. White, Judge.

Action by the Bank of Republic against the Republic State Bank and others to compel an allowance of a preferred claim. From a judgment denying its preference, plaintiff appeals. Reversed and remanded, with directions, and case certified to Supreme Court.

Neale, Newman & Turner, of Springfield, for appellant.

Farrington & Curtis, of Springfield, for respondents.

SMITH, J.

This is an action instituted in the circuit court to have a demand of $242.74 allowed as a preferred claim. The circuit court allowed the claim as an ordinary claim, but denied its preference over other claims. By proper steps the plaintiff has appealed to this court.

The statement prepared by the plaintiff is adopted by the defendants as a correct statement, and we accept it as a proper statement of the facts. The statement is as follows:

"Plaintiff's (Appellant) action is for an allowance of a preference against the Republic State Bank which had failed and was in process of liquidation by the state banking department.

"The petition alleged and the stipulation upon which the case was tried without the introduction of any oral evidence showed, the following facts, viz.:

"For years before the Republic State Bank closed its doors on April 17, 1928, it had been the custom between it and plaintiff, the Bank of Republic, each day to clear or exchange bills and checks which each had received upon the other; neither bank was a depositor of the other, nor did either bank carry any kind of an account with the other.

"On said April 17, 1928, plaintiff bank for a valuable consideration and in due course of business had for collection a number of checks drawn by solvent customers of defendant bank on their accounts in the latter bank; all of said customers had sufficient moneys in their accounts to pay their respective checks in the possession of plaintiff bank; the defendant bank likewise on said day held certain checks drawn by customers of plaintiff bank against the latter; upon the clearing or exchanging of checks for that day the balance due from defendant bank to plaintiff bank was $242.74; said checks were exchanged and the defendant bank executed and delivered to plaintiff bank a draft on the McDaniel National Bank of Springfield, Missouri, for said amount of $242.74, which draft was presented for payment in due course on the next day to the McDaniel National Bank but was not paid because of the failure and closing of the defendant bank.

"The checks so received by defendant bank were charged out of the accounts of the respective depositors; at the time of the closing of said bank it had in its vaults or in solvent corresponding banks more than $242.74.

"Plaintiff bank presented its claim for allowance as a preferred claim to be paid in full with said Martin L. Howard, Special Deputy Commissioner in charge of the liquidation of said bank in due time and in due form, and the claim was allowed by the said Howard not as a preferred claim, but as a general one, and the matter was informally referred to the said circuit court, Division No. 2 for the right of priority or preference to be determined; more than sixty days had elapsed since the expiration of the time for filing claim.

"The stipulation showed the further additional facts, viz.: that at the time of the failure of said bank it had on deposit in the McDaniel National Bank $6,677.38; that it owed the McDaniel National Bank in the form of two notes the sum of $15,000.00 which notes were then due; that on May 11, 1928, the McDaniel National Bank charged the account of the Republic State Bank with the entire balance which it had on deposit in the McDaniel National Bank and credited the same on the said $15,000.00 indebtedness; that none of the $6677.38 came into the hands of the liquidation officers.

"A supplemental stipulation entered into, filed and introduced in evidence recited that before the failure of the defendant bank it had hypothecated with the McDaniel National Bank as security for its debt of $15,000.00; certain notes exceeding in amount the sum of $15,000.00; that after the failure of defendant bank more than enough was realized by the McDaniel National Bank from said collateral to discharge the balance remaining due on said $15,000.00 debt after the application to the payment thereof of the $6677.38 mentioned in the original stipulation; that the unused portion of the amount realized on said collateral was turned over to the special deputy commissioner in charge of the liquidation of said bank. That the two banks were located on opposite sides of the main street of Republic, Missouri; that in making the exchange of checks, drafts, etc., the United States mails were not resorted to, but that the officers of the banks each day gathered up the items which each bank had collected on the other and carried them across the street for the purpose of making such exchange; that the exchange was thus made and a balance struck for which drafts were issued."

The plaintiff insists that the trial court erred in its finding, and that it was likely influenced by an opinion rendered by the St. Louis Court of Appeals in the case of American Bank of De Soto v. People's Bank of De Soto, 255 S. W. 943, in which a claim for preference was not allowed, based upon an agreed statement of facts, as published in the reports, in essentials like the facts in this case. The defendants, as one of their contentions, insist that, because the facts are the same here as in the American Bank Case, this case was properly decided. The plaintiff counters by saying that a recent case, Farmers' Bank v. Cantley, 16 S.W.(2d) 642, decided by the St. Louis Court of Appeals, reported since the trial of the instant case, and based upon a statement of facts, as shown by the published reports, like the one under consideration here, together with other cases cited, which distinguish the American Bank Case, justify an allowance of this claim as a preference over other claims.

We have read the statements of facts in the two cases mentioned above, as shown by the published reports, and we are unable to see from the statements alone any material difference, yet we find in the case of Bank of Poplar Bluff v. Millspaugh (Mo. App.) 275 S. W. 579, at page 583, Judge Bradley used this language:

"On this state of facts the St. Louis Court of Appeals denied a preference. Counsel for plaintiff bank in the cause at bar, it would appear, are inclined to concede that their contention is in conflict with and contrary to the law as written in American Bank v. People's Bank, supra. Counsel for plaintiff in Federal Reserve Bank of St. Louis v. Millspaugh [(Mo. App.) 275 S. W. 583] supra, says that the case of American Bank v. People's Bank was decided on the theory that the two banks there proceeded under the reciprocal accounts method. If such was the fact, then we are not in conflict, but we cannot say from the statement of facts and the opinion in American Bank v. People's Bank that the two banks in that case were doing business with each other under the reciprocal accounts method. It seems that the conclusion we have reached, and the law as we have endeavored to state it, are in conflict with the case mentioned. We have given the cause at bar serious and prolonged consideration, and are of the opinion that sound reason, substantial justice, and the weight of authority support our conclusion.

"The judgment should be reversed and cause remanded, with directions to allow plaintiff's claim as a preferred claim as asked in its petition, and it is so ordered. Deeming our statement of the law and our conclusion in conflict with the case of American Bank v. People's Bank, supra, by the St. Louis Court of Appeals, this cause is ordered certified to the Supreme Court for final disposition."

When that case reached the Supreme Court, that court adopted Judge Bradley's opinion as its own, 313 Mo. 412, 281 S. W. 733, 737, 47 A. L. R. 754, but in no way mentioned the conflict, if any, in the two cases, unless the adopting of the opinion had the effect of holding that the two opinions were in conflict, and that the...