Blackshaw v. French

• Decision Date: 02 February 1932
• Docket Number: No. 21881.,21881.
• Citation: 45 S.W.2d 916
• Parties: BLACKSHAW et al. v. FRENCH, Commissioner of Finance.
• Court: Missouri Court of Appeals

45 S.W.2d 916

BLACKSHAW et al. v. FRENCH, Commissioner of Finance.

No. 21881.

St. Louis Court of Appeals. Missouri.

February 2, 1932.

Appeal from Circuit Court, Montgomery County; W. C. Hughes, Judge.

"Not to be officially published."

Action by Samuel Blackshaw and others against C. E. French, Commissioner of Finance, in charge of the property and affairs of the Commercial Bank of Wellsville. From a judgment for defendant, plaintiffs appeal.

Reversed and remanded.

Fry & Hollingsworth and Marion S. Francis, all of Mexico, Mo., for appellants.

Glover E. Dowell, of Montgomery City, for respondent.

BENNICK, C.

This is an appeal from the judgment of the circuit court of Montgomery county in a proceeding under the statute (section 5336 et seq., R. S. 1929) for the determination of the question of priority of payment of an approved claim of $2,424 against the defunct Commercial Bank of Wellsville, which closed its doors and was duly taken over by the department of finance on May 10, 1930. The plaintiffs are Samuel Blackshaw, Sam Woods, E. S. Oliver, and Fred Blattner, Jr., whose status as claimants is that of assignees of the Continental Life Insurance Company, which was a depositor in the bank.

It appears that the insurance company had carried a general checking account in the bank for at least a year prior to the time of its closing, and that on May 11, 1929, to secure its deposit, a depository bond was executed by the bank as principal, and the several plaintiffs herein as sureties, the same to run for a term expiring May 13, 1930. The condition of the bond was that if the bank, during the term thereof, should faithfully account for, and in the due and ordinary course of business pay over on legal demand, all moneys deposited in the bank by or on account of the insurance company, then the obligation was to be null and void, but otherwise to be and remain in full force and effect.

On May 9, 1930, the day prior to the closing of the bank, the insurance company had on general deposit in it a balance of $2,424, which is the sum covered by the whole claim involved in this proceeding. On that day the insurance company, which has its general offices in the city of St. Louis, received information from some undisclosed source that T. K. Shelby, the cashier of the bank, had absconded, and upon that advice decided to withdraw the major portion of its deposit from the bank. Accordingly, about 2.30 o'clock in the afternoon, J. D. Mills, the vice president of the insurance company, and the one in charge of the account, called the bank from St. Louis over the telephone, and was put in communication with Eldridge Oliver, an employee of the bank, whose authority to have acted for it is not questioned on this appeal, though it seems that an issue was made of the matter in the lower court.

The record shows that Mills, in the course of the telephone conversation, requested Oliver to transfer by telegraph to the credit of the insurance company in St. Louis the sum of $2,400, and that Oliver answered, "I will, immediately." About an hour afterwards, Oliver filed a telegram in code at the local office of the Western Union Telegraph Company in Wellsville, signed by the bank, and addressed to the bank's St. Louis correspondent, the Mercantile-Commerce Bank & Trust Company, which, when translated, was shown to have read as follows: "Charge our account $2,400.00, and credit account of the Continental Life Insurance Company under advice to them."

The telegram was delivered at not later than 4:45 p. m. of the same day, and in due course came into the hands of E. F. Kallemeier, the assistant treasurer of the Mercantile-Commerce Bank & Trust Company, who appears to have had supervision over the Wellsville bank's account. At that time the latter's account showed a balance of only $1,394.20, which, of course, was considerably less than the sum to be credited to the account of the insurance company pursuant to the directions of the telegram. Kallemeier therefore at once called the cashier of the insurance company over the telephone, informing him of the receipt of the telegram and of the insufficiency of the Wellsville bank's account to permit payment, and advising him that he would hold the matter over until the following day, and that, in the event that the account was built up by that time to the amount stated in the telegram, he would make the payment as directed.

About noon the following day, Kallemeier learned that the Wellsville bank had meanwhile closed its doors. Some little time later, but after banking hours, Mills called on Kallemeier personally, and requested him to make the payment, but Kallemeier informed him that the account was still insufficient. As a matter of fact, items paid by the St. Louis bank on the morning of May 10th had reduced the Wellsville bank's account to the sum of $585.56, which was the balance standing to its credit at the close of business on that day. Mills then requested Kallemeier to give him the balance which was shown on the books, but the latter replied that his order was for the payment of the specific sum of $2,400, and that he was powerless to make payment in a lesser sum.

Kallemeier testified further that, though it was true that the telegram was received after the close of banking hours on May 9th, yet, if the Wellsville bank had then had on deposit a sufficient amount to have paid the demand, it would then and there have been honored, and charged against the Wellsville bank's account, though the entry would not have been made on the books of the Mercantile-Commerce Bank & Trust Company until the commencement of business on the following morning. However, the evidence was, as has heretofore been indicated, that at no time from the receipt of the telegram to notice of the closing of the Wellsville bank did the latter have on deposit with the St. Louis bank a sufficient sum to have permitted the payment of the amount specified in the telegram.

Shortly following the closing of the bank, the plaintiffs herein, in accordance with their liability as sureties on the bond, paid the insurance company the sum of $2,424, which was the full amount of its deposit; and on September 3, 1930, took a written assignment from the insurance company of its claim...