Clearmont School Dist v. Jackson Bank of Clearmont

• Decision Date: 06 April 1931
• Docket Number: No. 17136.,17136.
• Parties: CLEARMONT SCHOOL DIST. v. JACKSON BANK OF CLEARMONT et al.
• Court: Missouri Court of Appeals

37 S.W.2d 1006

CLEARMONT SCHOOL DIST. v. JACKSON BANK OF CLEARMONT et al.

No. 17136.

Kansas City Court of Appeals. Missouri.

April 6, 1931.

Appeal from Circuit Court, Nodaway County; D. D. Reeves, Judge.

Proceeding by the Clearmont School District against the Jackson Bank of Clearmont, S. L. Cantley, State Commissioner of Finance, and Herbert H. Albaugh, Special Deputy Commissioner. From a judgment denying the School District a preference and allowing its claim against the Bank as a common claim, the School District appeals.

Reversed, and cause remanded, with directions.

Ellis G. Cook, of Maryville, for appellant.

Shinabargar, Blagg & Livengood, of Maryville, for respondents.

CAMPBELL, C.

Plaintiff is an independent school district in Nodaway county, Mo. Byron Sowers was its treasurer, and cashier of the defendant bank, a banking corporation of the same county. Defendant had not been designated as a depository of the school funds belonging to plaintiff either by the county court of said county or by plaintiff, nor had the defendant bank delivered to plaintiff any bond or other security providing for the safe-keeping of its funds. Said treasurer, with defendants' knowledge, received the several sums of public school money belonging to plaintiff and deposited the same in the defendant bank in his name as treasurer of plaintiff. The bank failed, and its business and affairs were taken over by the finance commissioner of Missouri. At that time there was on deposit in said account in said bank the sum of $5,667.10, and the bank had sufficient funds to pay plaintiff's claim, if preference is awarded. The plaintiff filed claim therefor, stating the facts, and praying that its said claim be given preference. The case was tried to the court, resulting in preference being denied and the allowance of the claim as a common claim. The plaintiff appealed.

It was the duty of plaintiff's board to select a depository for its fund, and to cause said depository to give security therefor. Sections 9362 and 12187, Rev. St. 1929. This duty it did not perform. When it failed in that respect, the only one having the right to receive and hold its public school funds was its treasurer, Byron Sowers. The statutes say the school board, not its treasurer, shall designate a depository and cause such depository to give security. If the Legislature had intended that the treasurer of a school district could select a depository it would have said so. So long as the public money was in the custody of Sowers, it was a trust fund, and, when the bank received it, knowing it had not been designated as a depository, it obtained no better title than Sowers had. He was a trustee, and the bank was a trustee with respect to that fund....