Deposit Guaranty Bank & Trust Co. v. Merchants' Bank & Trust Co

• Decision Date: 03 December 1934
• Docket Number: 31469
• Citation: 158 So. 136,171 Miss. 553
• Parties: DEPOSIT GUARANTY BANK & TRUST CO. v. MERCHANTS' BANK & TRUST CO
• Court: Mississippi Supreme Court

158 So. 136

171 Miss. 553

DEPOSIT GUARANTY BANK & TRUST CO. v. MERCHANTS' BANK & TRUST CO

No. 31469

Supreme Court of Mississippi

December 3, 1934

Division B

1. BANKS AND BANKING.

Chancery court's order, directing executrix to place money, held by her in trust for minor legatees, on time deposit in bank which subsequently failed, and prohibiting it from permitting withdrawal thereof without court order, did not make bank coexecutor and trustee for minors, who were not entitled to preference over bank's general creditors (Code 1930 section 3828).

2. BANKS AND BANKING.

Relation between bank and depositor is simply one of debtor and creditor, in absence of contrary agreement, and deposit is not ordinarily trust fund.

3. BANKS AND BANKING.

Ordinarily bank deposit is loan to bank and funds deposited become its property.

HON. V. J. STRICKER, Chancellor.

APPEAL from the chancery court of Hinds county HON. V. J. STRICKER, Chancellor.

Proceeding for liquidation of the Merchants' Bank & Trust Company. From a judgment denying a petition by the Deposit Guaranty Bank & Trust Company to have a deposit treated as a trust fund and given preference over general creditors, petitioner appeals. Affirmed.

Affirmed.

Howie & Howie and May, Sanders, McLaurin & Byrd, all of Jackson, for appellant.

Under and by virtue of the terms and provisions of the final order in the estate of Louis Lasunsky, and furnishing of a copy of the same to the Merchants Bank & Trust Company, together with the notation pasted on the ledger sheet of said bank, the funds of both of these minors should be classed as a preferred claim, and the same should be paid in full out of any assets of said bank.

Fogg v. Hebdon, 32 So. 285, 80 Miss. 750; Miss. Cent. Co. v. Conner, 114 Miss. 63, 75 So. 57; Sawyer v. Conner, 114 Miss. 363, 75 So. 131; Love v. Bank of Collins, 137 So. 791, 161 Miss. 671; Cochrane v. Florida East Coast Ry. Co., 145 So. 217; Everglade Cypress Co. v. Tunnicliffe, 148 So. 192.

When a bank takes a deposit with instructions from the depositor that the deposit is for specific purpose and no other, it partakes of the nature of specific or special deposit, and the relation between the bank and the depositor with reference thereto is that of principal and agent, and title to the deposit remains in the depositor.

Tunnicliffe v. Sears, 148 So. 197; Arnall v. Commercial Bank of Wellsville, 45 S.W.2d 909; Grossman v. Taylor, 46 S.W.2d 13; Smith v. Fuller, 99 N.E. 214.

If moneys are entrusted to a bank to be held intact, or are left with the bank for a specific purpose under circumstances that negative an intent that title to the money passes to the bank, the bank is a trustee or an agent as the case may be. In such event, equity will impress a trust on the monies, and will decree that they be returned to the owner.

Kershaw v. Kimble, 65 F.2d 553; In re Kruger's Estate, 249 N.Y.S. 772; In re Holden, 264 N.Y.S. 244.

The facts in the case at bar show that the trustee did not occupy the relation of debtor and creditor with the Merchants Bank & Trust Company, and the bank was not permitted to honor any checks written by her on the two accounts unless express authority was given thereto by the chancery court of Hinds county, Mississippi. This restriction upon the depositor and the special notation on the books of the Merchants Bank & Trust Company, constituted the relationship of principal and agent, and under the decisions of the various courts, title to this money did not pass to the bank.

The bank was made a trustee by the decree of the court, and acquiesced, thereby becoming a joint trustee of the funds with Mrs. Lasunsky--not in the place of Mrs. Lasunsky, but jointly with her.

If we are correct in our analysis of the effect of the court's decree, the bank held the money in question as trustee, and if so held the claim of the appellant was entitled to be decreed to be a preference.

Flowers, Brown & Hester, of Jackson, for appellee.

Ordinarily a bank deposit is a loan to bank, and funds so deposited become property of bank.

Moreland v. Peoples Bank of Waynesboro, 114 Miss. 203, 74 So. 828, L. R. A. 1917F 263; Rice v. Webb, 141 Miss. 66, 105 So. 854.

If the agreement between the parties is that the identical coin or currency shall be laid aside and returned, then it is a special deposit. But if the agreement is that the money shall be returned, not in the specific coin or currency deposited, but in an equal sum, it is a general deposit.

M. C. Railroad Co. v. Conner, 114 Miss. 63; Warren v. Nix, 97 Ark. 374, 135 S.W. 896.

The court will observe that the Sawyer case turned on the proposition that under the facts surrounding the making of the deposit, title to the funds did not pass to the bank.

It is clearly the law that all deposits are prima facie general deposits to be used by the bank.

3 R. C. L. 517; Railroad Co. v. Conner, 114 Miss. 72; 3 R. C. L. p. 518, sec. 147; Warren v. Nix, 97 Ark. 374, 135 S.W. 896.

The petition in the present case does not aver that the deposit was special or that the identical money was to be returned.

The authorities defining "special deposits" and differentiating special from general deposits are collated in volume 7, Words and Phrases, title "special deposits," and volume 4, second series, of same work; also 3 R. C. L., sec. 146 et seq.

Billingsley v. Pollock, 69 Miss. 762, 13 So. 828, 30 Am. St. Rep. 585.

There was no agreement with Mrs. Lasunsky that the identical money would be returned to her.

OPINION

Ethridge, P. J.

Louis Lasunsky, in his lifetime, made a will wherein he bequeathed to Norman Ingram Markow the sum of four thousand dollars, and to Renie Littenberg the sum of four thousand dollars, and made his wife, Mrs. Sophie Lasunsky, executrix of said will without bond. She qualified as such and proceeded with the execution of the will and trust confided to her, placing the funds in the Merchants' Bank & Trust Company, and in addition to the bequest, certain funds belonging to her to supplement such funds. She reported to the chancery court and the court made an order requiring the funds to be placed in said Merchants' Bank & Trust Company to bear interest at not less than...