Brady v. American Nat. Bank of Oklahoma City
| Decision Date | 25 May 1926 |
| Docket Number | 16659. |
| Citation | 250 P. 1006,120 Okla. 159,1926 OK 484 |
| Parties | BRADY v. AMERICAN NAT. BANK, OF OKLAHOMA CITY. |
| Court | Oklahoma Supreme Court |
Rehearing Denied Dec. 7, 1926.
Syllabus by the Court.
Where a trustee deposits funds belonging to his cestui que trust in his own name in a bank, and the bank, without notice of the trust character of such deposit, extends credit to such trustee on the faith of such deposit, it may assert its lien against such deposit, notwithstanding the trust character thereof.
Where a trustee deposits money belonging to his cestui que trust in a bank, and no credit is extended on account of such deposit and the bank in no way changes its position by reason thereof, a lack of notice of the trust character of such deposit is immaterial, and the true owner may recover the amount thereof from such bank.
Where a trust fund is deposited in a bank to the personal account of the trustee along with and mingled with his own funds in a single account, and afterwards the trustee draws checks generally upon said account, it will be presumed, so long as the balance remains equal to or greater than the trust fund that the checks so drawn were intended to be cashed out of the trustee's individual funds, the presumption being that every man, until the contrary is proved, is deemed to have acted honestly.
Commissioners' Opinion, Division No. 4.
Appeal from District Court, Oklahoma County; William H. Zwick Judge.
Action by Emma F. Brady against the American National Bank, of Oklahoma City. Judgment for defendant, and plaintiff appeals. Reversed and remanded with directions.
Walter & Hilpirt and E. L. Fulton, all of Oklahoma City, for plaintiff in error.
Thos H. Owen and Wilbur J. Holleman, both of Oklahoma City, for defendant in error.
The parties will be referred to as plaintiff and defendant as they were designated in the trial court.
The plaintiff commenced this action in the district court of Oklahoma county for the purpose of recovering a judgment in the sum of $2,011.67, alleged by her to be a trust fund belonging to her and deposited in said bank by the F. B. Collins Investment Company. The case was submitted to the court, upon an agreed statement of facts, which is substantially as follows: On the 12th day of May, 1923, and for a number of years prior thereto, the defendant was a banking corporation organized under the laws of the United States, doing business in Oklahoma City. On said date, and several years prior thereto, the F. B. Collins Investment Company, a corporation, was engaged in the farm loan business with its principal office in Oklahoma City, was a depositor of said defendant bank, and was indebted to said defendant in a sum of money in excess of its deposit.
On April 4, 1919, Fred Renner and Nettie Renner, his wife, borrowed from the F. B. Collins Investment Company $2,000, for which they gave their secured note upon certain real estate. This note and mortgage were afterwards sold and assigned to the plaintiff. On the 26th day of April, 1923, and while the plaintiff was the owner of said note and mortgage, the makers thereof, desiring to pay off and discharge said indebtedness and believing that the same was still held by the F. B. Collins Investment Company, transmitted by bank draft to said company $2,130.50, being the principal and interest then due on said note and mortgage. The investment company had already paid $118.83 by way of an installment of interest due on said note, so that the amount due the plaintiff on April 26, 1923, was $2,011.67. On April 26, 1923, the said investment company deposited said $2,130.50 draft to its credit in the bank, and on the same day drew its check against said deposit in favor of the plaintiff's agent for $2,011.67, and transmitted the same to the plaintiff's agent at Rochester, N.Y. Upon receipt of this check, the plaintiff's note was canceled and the mortgage released. The check was deposited in a New York bank and on May 12, 1923, in due course, presented to the defendant bank and payment thereon refused. At the time said draft was deposited, the investment company had on deposit in the defendant bank other funds amounting to $13,925.15. On the 8th day of May, 1923, the defendant bank, having learned of the impending insolvency of the F. B. Collins Investment Company, credited its entire deposit which on said date amounted to $11,545.94 upon its indebtedness to the bank. The defendant had no notice of the trust character of the draft until after the 8th day of May, 1923. The plaintiff never authorized the investment company to deposit said draft to its own credit in the defendant bank. From April 26, until May 8, 1923, the F. B. Collins Investment Company continued to make further deposits in said defendant bank and to draw its checks thereon, which were paid. The amount of the investment company's balance between said dates never fell below $9,329.83. It was expressly agreed that no loans were made or credit extended by the defendant bank to the F. B. Collins Investment Company on account of said deposit or after April 26, 1923, and that the defendant bank in no way changed its position on account of said deposit.
The trial court, upon these facts, found the issues for the defendant and entered judgment dismissing the plaintiff's petition. The plaintiff's motion for a new trial was overruled, and she has duly appealed to this court. The assignments of error are: (1) That the court erred in overruling the plaintiff's motion for a new trial; (2) that the judgment is contrary to law and to the evidence.
The theory of the defendant is based on section 7434, C. O. S. 1921:
"A banker has a general lien, dependent on possession, upon all property in his hands belonging to a customer, for the balance due to him from such customer in the course of the business."
And it is argued that:
"The weight of authority is to the effect that where the bank, in which funds...
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