Commerce Trust v. Farmers' Exch. Bk. of Gallatin

• Decision Date: 10 June 1933
• Docket Number: No. 32410.,32410.
• Citation: 61 S.W.2d 928
• Parties: COMMERCE TRUST COMPANY, a Corporation, Appellant, v. THE FARMERS' EXCHANGE BANK OF GALLATIN, In Liquidation, S.L. CANTLEY, Commissioner of Finance, and JOSEPH N. MARTIN, Special Deputy Commissioner of Finance in Charge.
• Court: Missouri Supreme Court

61 S.W.2d 928

COMMERCE TRUST COMPANY, a Corporation, Appellant, v. THE FARMERS' EXCHANGE BANK OF GALLATIN, In Liquidation, S.L. CANTLEY, Commissioner of Finance, and JOSEPH N. MARTIN, Special Deputy Commissioner of Finance in Charge.

No. 32410.

Supreme Court of Missouri, Court en Banc.

June 10, 1933.

Appeal from Daviess Circuit Court. — Hon. Ira D. Beals, Judge.

AFFIRMED.

Dudley & Brandom and H.G. Leedy for appellant.

(1) Plaintiff's action is to recover money belonging to defendant and held in trust for it. The Commissioner of Finance acquired no title to such money in taking charge of the defendant bank, and the same constitutes no part of the assets of the bank, and is not subject to administration by the Commissioner of Finance, or to distribution to the creditors of the bank. As plaintiff's property, the fund may be recovered without regard to the provisions of the statute relating to the filing of claims by creditors. Bank of Poplar Bluff v. Millspaugh, 313 Mo. 12, 281 S.W. 733; Federal Reserve Bank v. Millspaugh, 314 Mo. 1, 282 S.W. 706; Fidelity Natl. Bank & Trust Co. v. Farmers Exchange Bank of Gallatin, 45 S.W. (2d) 1091; Federal Reserve Bank v. Quigley. 284 S.W. 164; Gentry County Drainage Dist. v. Farmers & Mechanics Bank, 5 S.W. (2d) 1110; State Farmers Mut. Tornado Ins. Co. v. Cantley, 222 Mo. App. 839, 6 S.W. (2d) 970; Carson Natl. Bank of Auburn v. American Nat. Bank, 34 S.W. (2d) 143; State ex rel. Percy v. Cox, 30 S.W. (2d) 46; State of Missouri ex rel. v. Page Bank of St. Louis, 14 S.W. (2d) 597; Advance Exchange Bank v. Baldwin, 31 S.W. (2d) 96; Paul v. Draper, 73 Mo. App. 566; First Natl. Bank v. Sanford, Assignee of the Bank of Commerce, 62 Mo. App. 394; Elliott v. Landis Machine Co., 236 Mo. 547; Harrison v. Smith, 83 Mo. 210; German Fire Ins. Co. v. Kimball, Assignee of Farmers Bank of Wikenda, 66 Mo. App. 370; Tiermans, Executor, v. Security Building & Loan Assn., 152 Mo. 135; Horigan Realty Co. v. Flynn, 213 Mo. App. 591, 253 S.W. 403; Orr v. St. Louis Union Trust Co., 291 Mo. 383, 236 S.W. 642; Dorrance v. Dorrance, 257 Mo. 317, 165 S.W. 783. (2) The provisions of statute of this State relating to the filing of claims against failed banks have reference to the administration of the assets of the bank only and confer no right on the Commissioner of Finance to withhold property to which the bank has no title. Secs. 5333, 5337, R.S. 1929; Secs. 72, 76, Laws of New York, 1914, Ch. 369; In re Bank of Cuba, 191 N.Y. Supp. 88; In re McCarthy's Funds, 248 N.Y. Supp. 335; In re Forrest's Estate, 249 N.Y. Supp. 776; In re Vavoudis, 252 N.Y. Supp. 779; Nauman Co. v. Bradshaw, 193 Fed. 350. (3) Property held as bailee by a suspended bank by the express provisions of Section 5328, Revised Statutes 1929, must be delivered by the Commissioner of Finance to the owner thereof, and no claim is required to be filed for the same. Such statute applies to all property held by the delinquent as bailee, including trust funds. In re Forrest's Estate, 249 N.Y. Supp. 776. (4) The provisions of statute relating to the filing of claims against failed state banks in this State and the bringing of suits thereon by their express terms relate alone to the claims of creditors. They constitute a special Statute of Limitation, and as such must be strictly construed and cannot be made to relate to the claims of cestui que trusts or others. Secs. 5333, 5334, 5335, 5336, 5337, R.S. 1929; Macon County v. Farmers Trust Co., 29 S.W. (2d) 1096; American Can Co. v. Schram, 2 Pac. (2d) 924; Pleadwell v. Glass Co., 151 Mo. App. 51; Mann v. Bank of Greenfield, 20 S.W. (2d) 502; Tate v. Savings Bank of Cabool. 21 S.W. (2d) 222; Farm & Home Savings & Loan Co. v. Howard, 30 S.W. (2d) 631; Taylor, Bank Commissioner, v. Simpkins, 5 S.W. (2d) 311. (5) Even though the statutory provisions relating to the filing of claims against failed banks in this State could be construed as having any application to plaintiff's cause of action, it was necessary for the Commissioner of Finance to show that the requirements had been complied with. Although the issue was directly raised that none of the statutory requirements had been followed, no proof of compliance whatever was offered. Mann v. Bank of Greenfield, 20 S.W. (2d) 502; Woods v. Cainsville Bank, 11 S.W. (2d) 56; Farm and Home Savings & Loan Assn. v. Howard, 30 S.W. (2d) 631. (6) Even though the statutory provisions relating to the filing of claims could be considered as having any application to plaintiff's cause of action such compliance was waived by the Commissioner of Finance. Barlett v. McAllister, 289 S.W. 814; Macon County v. Farmers Trust Co., 29 S.W. (2d) 1096. (7) A court in the exercise of its general equity jurisdiction may allow claims not even presented in the furtherance of justice. Woods v. Cainsville Bank, 11 S.W. (2d) 56; Andrew v. Security Savings Bank, 214 N.W. 245; In re Hanover Trust Co., 252 Mass. 348, 148 N.E. 130.

Ed C. Hyde and Earle W. Frost for respondents.

(1) Appellant is not entitled to recover on the claim set out in its petition herein for the reason that said claim was not filed with the Commissioner of Finance within the time specified and required in the notice given by said Commissioner under the provisions of Section 11716, Revised Statutes 1919, now Section 5333, Revised Statutes 1929. Bowersock Mills & Power Co. v. Citizens' Trust Co., 298 S.W. 1049; Cold Spring Lodge v. Cantley, 18 S.W. (2d) 111; Federal Land Bank of St. Louis v. Cantley, 44 S.W. (2d) 269; Netherton v. Farmers' Exchange Bank, No. 16596, K.C. Court of Appeals (not yet reported); Summers v. Farmers' Bank, 282 S.W. 757. (2) Recovery on appellant's claim is further precluded and barred for the reason that appellant did not file its suit herein within the time required by the statutory period of limitation relating to such suits. Sec. 11720, R.S. 1919, now Sec. 5337, R.S. 1929; Tate v. Citizens' Sav. Bank, 223 Mo. App. 957, 21 S.W. (2d) 222; Evans v. French, 222 Mo. App. 990, 6 S.W. (2d) 655; Summers v. Farmers' Bank, 282 S.W. 757. (3) Appellant's petition is insufficient and does not state a cause of action in that it does not state and allege all of the necessary legal requirements in a suit against an insolvent bank and the Commissioner of Finance engaged in the liquidation thereof. Sec. 11720, R.S. 1919, now Sec. 5337, R.S. 1929; In re State Bank of Brashear, 45 S.W. (2d) 117; Federal Land Bank of St. Louis v. Cantley, 44 S.W. (2d) 269; Cold Spring Lodge v. Cantley, 18 S.W. (2d) 111; Netherton v. Farmers' Exchange Bank, No. 16596, K.C. Court of Appeals (not yet reported). (4) Neither appellant's petition nor proof discloses any basis for the exercise of general equitable jurisdiction and the allowance of its claim regardless of the failure to comply with the statutory requirements. Such action would not be proper under the facts and the laws and decisions applicable to the exercise of such jurisdiction. Sec. 879, R.S. 1929; Rogers v. Brown, 61 Mo. 187; Kober v. Kober, 324 Mo. 379, 23 S.W. (2d) 149. (5) The decree of the circuit court should be affirmed.

COOLEY, C.

This case was tried in the Circuit Court of Daviess County and from a judgment against it the plaintiff appealed to the Kansas City Court of Appeals. That court, in an opinion reported in 52 S.W. (2d) 406, held that the judgment should be reversed and the cause remanded with directions to the trial court to allow plaintiff's claim as a preferred one but, deeming its decision in conflict with that of the St. Louis Court of Appeals in Bowersock Mills & Power Co. v. Citizens' Trust Co., 298 S.W. 1049, certified the cause to this court for determination. We adopt the following statement of facts made by the Court of Appeals:

"This is an action to recover the proceeds of a collection made by the Farmers' Exchange Bank of Gallatin, now in liquidation, immediately before it suspended business, which proceeds are claimed to constitute trust funds in the possession of said bank and the Deputy Commissioner of Finance in charge of its assets and affairs.

"The trial court found that the claim of plaintiff was not filed with the Commissioner of Finance, and that this suit was not begun, within the time required by law and denied plaintiff any right of recovery.

"It is admitted that the following facts contained in the statement in plaintiff's brief are true:

"`On March 3, 1926, plaintiff sent to defendant bank for collection and remittance various checks drawn by depositors of defendant bank against their respective accounts therein aggregating the sum of $2,371.02. On March 4, 1926, these checks were charged by the defendant bank to the accounts of the various drawers of the same and the aggregate amount thereof was attempted to be remitted to plaintiff by defendant bank drawing its remittance draft against its balance with the Fidelity National Bank and Trust Company of Kansas City. On the same day the defendant bank suspended business, and its remittance draft for that reason was not paid. The accounts of the various depositors against which the checks were drawn were in excess of the amounts of the checks respectively charged to such accounts, except one account. Plaintiff asks no recovery for the check charged to that account inasmuch as settlement of the same has been otherwise effected. The record also shows that other items have been eliminated by agreement. At the time of the charging of the checks to the depositors' accounts, and at the time it suspended business, and its affairs were taken in charge by the Commissioner of Finance, the defendant bank had sufficient available cash to pay all of the checks collected in full, including a deposit with the Fidelity National Bank and Trust Company, against which the remittance draft was drawn, in excess of the amount of such draft.'

"The facts further show that the claim was not filed until approximately a month after the time required for the filing of those...