Coal & Coke Co. v. Bank of Bevier, 17279.

• Decision Date: 07 December 1931
• Docket Number: No. 17279.,17279.
• Citation: 44 S.W.2d 188
• Court: Missouri Court of Appeals
• Parties: CENTRAL COAL & COKE CO., APPELLANT, v. STATE BANK OF BEVIER, RESPONDENT.

44 S.W.2d 188

CENTRAL COAL & COKE CO., APPELLANT, v. STATE BANK OF BEVIER, RESPONDENT.

No. 17279.

Kansas City Court of Appeals. Missouri.

December 7, 1931.

Appeal from the Circuit Court of Macon County. — Hon. Vernon L. Drain, Judge.

REVERSED AND REMANDED (with directions).

Walter C. Goodson and Geo N. Davis for appellant

Ed. G. Robinson and C.G. Buster for respondent.

ARNOLD, J.

This is an action to establish a preferred claim in the amount of $1448.38, against the assets of the defendant bank in the hands of the commissioner of finance for liquidation. No question arises upon the sufficiency of the petition which, in part, bases the cause of action upon an alleged special deposit, and charges "that the Central Coal & Coke Company was a customer and a special depositor in said bank under an arrangement by which the amount of money needed by the Central Coal & Coke Company for the semi-monthly pay roll was sent to said bank, for which the said bank was paid by the rate of one dollar ($1) per one thousand ($1,000) dollars; that said money so deposited in said bank was a special deposit for a special purpose and not intended to swell and go into the assets of said bank, under a special agreement between the said bank and the Central Coal & Coke Company; and that on or about the 21st day of February, 1930, and while said bank was insolvent and known to be insolvent by its officers and agents, the Central Coal & Coke Company made a special deposit in said bank, for the purpose aforesaid, of $7123.11, and checks against the same exceeded the withdrawals in the sum of $1448.38, which amount of money was in the defendant bank at the time it closed, belonging to the Central Coal & Coke Company, and which plaintiff is entitled to recover."

Plaintiff demanded judgment in the sum of $1448.38, and that said judgment be declared a preferential claim. The answer was a general denial.

The cause was tried at the April, 1931, term of the circuit court of Macon county, and the court adjudged "that said claim be and is hereby disallowed as a preferential or priority claim" and "that plaintiff is entitled to recover of the defendant for the sum so claimed in his petition as a common claim." From this judgment plaintiff duly appealed and assigns error in the denial of a preference because the evidence shows there was a special deposit.

Plaintiff introduced the following agreed statement of facts: "It was agreed that the State Bank of Bevier was operating in Bevier, Missouri; that on or about the 25th day of February, it was closed by the directors; that on the 25th day of February, it voluntarily passed its assets and affairs into the hands of the commissioner of finance of Missouri; that L.L. Vaughn was placed in charge of the bank by the commissioner of finance and has since that time had charge of all of the assets and books of the State Bank of Bevier, and notice was given to creditors to prove their claims on or before the 15th day of July, 1930. Further admitting, this claim sued on was filed within the time and allowed as a common claim; and that within six months thereafter, this suit was brought for preference; further admitting that the commissioner of finance in charge of the bank now has sufficient funds on hand to pay this claim if allowed as a preferred claim; it was further admitted that the Central Coal & Coke Company, is in the hands of a receivers, and that J.M. Bernardin is the receiver. It is further admitted that the sum of $1448.38, sued on in this claim went into the hands of the commissioner of the bank."

The following letter also was introduced in evidence by plaintiff:

                       "Central Coal & Coke Company
                         "Keith & Perry Building
                            "Kansas City, Mo
                  "A.B. Ewing, Comptroller
                

"In your reply refer to file 383 "October 30, 1924.

"Mr. W.A. Rowland, Cashier. "State Bank of Bevier, "Bevier, Missouri.

"Dear Sir: "Our agent at Bevier, Mr. J.E. Agee, states that he has talked to you in regard to handling our mine pay rolls by check through your bank. He states that you will be willing to do this for $1 for each $1,000 of pay roll.

"As you know the Bevier mines are not working at present but we would like to get this worked out so that if the Bevier District starts we will have the pay roll matter settled. Under the new arrangement, we would pay the miners two days in advance of the Missouri mine pay roll day. The detailed statement of the amount which is due the miner as well as his check would be given to him two days before his regular pay day.

"Mr. Agee can inform your bank four days before our regular pay day of the amount and the denominations which will be required to meet the pay roll. At that time you can get in touch with the Commerce Trust Company and have them send the funds to you if this is necessary. At the same time Mr. Agee notifies your bank of the funds that will be needed to meet the pay roll, he will also notify-our treasurer here who will deposit the total amount of the pay roll to your credit in the Commerce Trust Company. You can then give us credit on your accounts for the amount of this pay roll, and when the agent issues the pay checks, these will be charged against this pay roll account. We will then have suitable checks printed to cover our requirements.

"Your charges in this connection can be paid by the agent through his account in your bank. You can furnish him with a statement of your charges monthly.

"I presume that the method of handling the pay roll as outlined above will be satisfactory. I should like to hear from you in regard to this matter.

                                      "Yours very truly
                       "[Signed] A.B. EWING, Comptroller.
                "ABE:MB"
                

No reply to this letter appears in the record, but Mr. Agee testified he was the agent of the Central Coal & Coke Company at Bevier, and had complete control of the pay roll: the company had about 225 men; that he talked with the cashier of the bank about the letter and made arrangements with him about the pay roll account; the bank was to handle the pay roll and the company was to pay the bank $1 a thousand for the service; the company was to deposit the money with the Commerce Trust Company in Kansas City the day preceding the pay day. He stated:

"We paid on the 8th and 23rd, unless it fell on Saturday or a holiday, and the morning of the pay day I would take my bank book up and they would credit me with the deposit, and we deposited the exact amount we were issuing pay checks for, for that day. We issued the pay checks on the same day ... in case a miner didn't call for his check, we didn't issue the check, or in case he came in and settled up before pay day, we immediately issued a check for whatever balance was left in that deposit and put the money in the office safe and used it in the regular office business."

He said the account was balanced within two or three days, and it was understood at the bank they were to carry no balance. That was the prevailing practice and course of business from 1924, to the time the bank closed its doors. Witness stated that under this arrangement they paid two days earlier than the regular Missouri mine pay roll day; that the last credit on the account was on February 21, 1930, in the amount of $7123.11, representing the deposit to cover pay checks that day; that checks aggregating $1448.38, had not been returned to the bank; that the bank had authority to pay money out of this account only on the form of check used for the pay roll, and no other checks were drawn. "Q. What was the form, do you know? A. Yes, sir. There was two checks. One was blue and the other yellow. The blue was used on the 8th pay day and the yellow on the 23rd pay day. A regular bank check was never drawn on this account from the beginning in 1924, until the time it closed."

If a miner would draw his money before pay day, the witness would draw a check payable to himself as agent.

"After each pay day I drew money out of this account as agent, and this was drawn out on the same kind of a check, regular pay roll check, known as labor due Central Coal & Coke Company, to balance... . The checks used checking against this account were not ordinary bank checks but were regular pay roll checks, issued for wages due for labor ... there wasn't any deposit to this account except a pay roll correction or pay roll...