Citizens' Sec. Bank v. Gatewood

• Decision Date: 16 February 1931
• Docket Number: No. 17081.,17081.
• Citation: 36 S.W.2d 426
• Parties: CITIZENS' SEC. BANK OF ENGLEWOOD v. GATEWOOD.
• Court: Missouri Court of Appeals

36 S.W.2d 426

CITIZENS' SEC. BANK OF ENGLEWOOD v. GATEWOOD.

No. 17081.

Kansas City Court of Appeals. Missouri.

February 16, 1931.

Appeal from Circuit Court, Jackson County; Willard P. Hall, Judge.

"Not to be officially published."

Petition by W. O. Gatewood, assignee of the Night and Day Bank of St. Louis, to have a judgment against the Citizens' Security Bank of Englewood adjudged and decreed to be a preferred claim. From an adverse judgment, petitioner appeals.

Affirmed.

Thos. H. Kingsley, of Kansas City, for appellant.

Gardner & Carroll, of Kansas City, for respondent.

ARNOLD, J.

This is an action seeking to have declared as a preferred claim a certain judgment for plaintiff in the sum of $7,248.75. The record discloses the following state of facts:

The Night and Day Bank was a corporation organized and existing under the laws of Missouri, engaged in general banking business in the city of St. Louis, until on or about January 6, 1922, when its assets and business were taken over by the commissioner of finance of the state. John G. Hughes, at that time, was such commissioner, and one Donald W. Ross, as special deputy commissioner, was placed in charge of the business and assets of the bank and so continued until on or about February 1, 1923, when he was removed and afterwards indicted, convicted, and sentenced to penal servitude. On or about September 9, 1922, and while said Ross was officially in charge of said bank, the firm of Oreon E. & R. G. Scott, in payment for some bonds they had purchased from the assets of that bank, issued and delivered to Ross their check dated September 9, 1922, payable to the order of John G. Hughes, commissioner of finance, drawn on the International Bank of St. Louis, in the sum of $7,248.75.

The Citizens' Security Bank of Englewood, organized and existing under the laws of Missouri, was engaged in a general banking business at Englewood, Jackson county, Mo., until about August 7, 1926, when its assets and business were taken over by the state finance commissioner. The record shows that at the time this cause was tried the said commissioner was still in charge of the business and assets of said bank and no order of distribution had then been made.

At the time the Scott check passed into the hands of the commissioner of finance in charge of the Night and Day Bank of St. Louis, Donald W. Ross, the special deputy in charge thereof, was the majority stockholder in the Citizens' Security Bank of Englewood, and Ross' brother-in-law, Paul E. Cole, was its cashier and had been in that position for about two weeks. Ross deposited, or caused to be deposited, in said Englewood Bank the Scott check, indorsed as follows: "For deposit, J. G. Hughes, Commissioner of Finance, Night and Day Bank, D. W. Ross Special Deputy Commissioner." The record discloses that neither the commissioner of finance nor the Night and Day Bank of St. Louis had an account with the Englewood Bank, nor was said bank designated as such depository. It appears the commissioner of finance had made a written contract with the Liberty Central Trust Company of St. Louis to act as depository of the funds of the Night and Day Bank, and Ross was not authorized to deposit its funds in any bank other than the said trust company.

On September 13, 1922, Paul E. Cole, cashier in charge of the Englewood Bank, received and accepted the said Scott check without further indorsement, and on the same day issued a certificate of deposit of that bank in the amount of $5,000 payable to D. W. Ross, personally, and opened a new account on its books, entitled, "D. W. Ross, Special," and credited that account with $2,248.75. Cole testified this was all done at the suggestion and request of Ross. The Englewood Bank collected the Scott check from the International Bank of St. Louis, the drawee bank. Later Ross personally collected the amount of $5,000, the certificate of deposit, and checked against the amount of $2,248.75, deposited as above mentioned, so that on January 6, 1923, there remained of that deposit only $4.37. No part of this money was ever paid to the Night and Day Bank or to the commissioner of finance. The testimony shows that from the time this fund was deposited in the Englewood Bank, until that bank was taken over by the commissioner of finance, it had on hand funds in excess of $50,000, and at the time the commissioner took charge of its assets, funds amounting to more than $100,000 passed into his hands.

After the Englewood Bank was taken over by the finance commissioner, and within the time provided by law, Charles R. Gillis, special deputy commissioner of finance, then in charge of the affairs of the Night and Day Bank, filed claim in writing on behalf of said bank for the amount of $7,248.75, based upon the facts as above stated, with the commissioner of finance in charge of the Englewood Bank, which said claim was disapproved and rejected. Thereafter and on May 4, 1927, this claim with others was sold and assigned to W. O. Gatewood, which said sale and assignment was duly approved by the circuit court of the city of St. Louis, wherein the liquidation of the affairs of the Night and Day Bank was pending. Thereafter said assignee filed a separate action at law (No. 63372) on the claim, in the circuit court of Jackson county at Independence, against the Englewood Bank, and in that action he had judgment (November 30, 1928) for the full amount of the claim, and the same was ordered paid out of the funds and assets of that bank in the hands of the commissioner of finance. No preference of payment was asked in that cause, nor was there any appeal from said judgment.

It appears from the evidence that before any order of distribution had been made of the assets of the Englewood Bank by the circuit court of Jackson county which had supervision of the liquidation of said bank, W. O. Gatewood, assignee, filed his petition herein (case No. 61867), alleging the facts as above stated, asking the judgment of the circuit court of St. Louis, above mentioned, be adjudged and decreed to be a preferred claim against the funds of said bank in the hands of the commissioner of finance, and ordered paid prior to general or common claims, and pro rata with other preferred claims. The record discloses no answer or demurrer was filed to the petition herein. A motion to strike was filed, but the record does not show this was ever heard or directly ruled on by the court.

The hearing was before the court without a jury, resulting in a judgment against Gatewood and that he have and recover nothing in the cause. Motion for a new trial duly filed was overruled and an...