Ellington v. Cantley

• Decision Date: 05 December 1927
• Docket Number: No. 16123.,16123.
• Citation: 300 S.W. 529
• Parties: ELLINGTON et al. v. CANTLEY, Com'r of Finance.
• Court: Missouri Court of Appeals

300 S.W. 529

ELLINGTON et al. v. CANTLEY, Com'r of Finance.

No. 16123.

Kansas City Court of Appeals, Missouri.

December 5, 1927.

Appeal from Circuit Court, Ray County; Ralph Hughes, Judge.

"Not to be officially published."

Suit by Wilbert B. Ellington and others against S. L. Cantley, Commissioner of Finance, in charge of the Commercial Bank at Lawson, Mo., in process of liquidation by and through Special Deputy Commissioner of Finance, A. V. Spillman. Judgment for defendant, and plaintiffs appeal. Affirmed.

Brown, Douglas & Brown, of St. Joseph, and Crowley & Farris, of Richmond, for appellants.

Lavelock, Kirkpatrick, Clark & Garner, of Richmond, for respondent.

FRANK, C.

This suit seeks to establish a preferred claim in the sum of $840 against the assets of the Commercial Bank of Lawson, Mo., in the hands of the commissioner of finance, S. L. Cantles.

The case was tried before the chancellor, without the aid of a jury. The finding and judgment was for defendant, and plaintiff appealed.

The deposit out of which the claim for preference arose was made on April 19, 1926, and the bank closed its doors and placed itself in the hands of the commissioner of finance on May 4, 1926. Prior to April, 1926 George E. Ellington, his wife, Naomi Ellington, and their son, Wilbert B. Ellington, purchased a farm of 200 acres. On this farm was a deed of trust to the St. Joseph Life Insurance Company for $20,000, bearing 6 per cent. interest. This deed of trust also covered another 80 acres owned by one Stein. Under an agreement among the parties, the Ellingtons assumed $14,000 of the loan, and Stein assumed the remainder; thus making Ellingtons' annual interest $840 and Stein's $360. The insurance company agreed to this arrangement. The interest was due on the deed of trust on April 21st.

The Ellingtons had been customers of the bank, and carried an account in the name of G. E. Ellington. They were indebted to the bank on notes aggregating several thousand dollars, secured by a chattel mortgage on personal property and by a second deed of trust on the real estate.

On April 19, 1926, the Ellingtons sold the personal property on which the bank held the chattel mortgage, and deposited the proceeds of this sale amounting to $2,270.18, in the bank to the credit of G. E. Ellington. They told the cashier of the bank that they had bought some feed which they wanted to pay for; that they also wanted to pay the $840 interest on their real estate loan to the St. Joseph Life Insurance Company, and pay some notes which they owed the bank. They then checked to the hank the sum of $1,097.32 to apply on their indebtedness, and gave ether checks which reduced the amount of the deposit to $1,146.66. Between that date and the closing of the bank this balance varied. Other deposits were made and other checks charged against the account, and on May 3, 1926, the balance was $834.62, and on May 4, it was $847.27. At no time was the balance exactly $840.

At the time the bank closed, the Ellingtons were in debt to the bank on notes then past due in a sum greater than the amount on deposit to the credit of G. E. Ellington.

After the bank closed, the St. Joseph Life Insurance Company filed a claim for the $840 interest due it with the commissioner of finance, not in its own behalf, but as agent of the Ellingtons. Prior to this time the St. Joseph Life Insurance Company foreclosed its deed of trust on the Ellington land.

G. E. Ellington and wife having been adjudged bankrupt, their trustee was substituted in this suit, and is now claiming the $840 as a preferred claim against the bank in favor of the Ellington bankrupt estate.

It is not disputed that the Ellingtons informed the cashier of the bank at the time the deposit was made that they wanted $840 of this money sent to the insurance company to pay the interest on their real estate loan. The cashier understood this, and promised to do so when Mr. Stein paid in his part of the Interest. As before stated, the deed of trust in question covered both the Ellington and the Stein land, and the Ellingtons and Stein had each assumed their proportionate part of the interest on said deed of trust.

G. E. Ellington testified that, before the deposit in question was made, he had an account in his name at the bank; that he knew at the time that the deposit in question was placed to his account; that he never at any time requested the bank to issue a draft for the $840, and never tendered the bank a check for that amount. The bank was not requested to put the $840 in a separate deposit. It is the contention of respondent that the balance on deposit in the name of G. E. Ellington on the day the bank closed should be set off against the notes then due the bank from G. E. Ellington, while appellant contends that a preference should be declared to the amount of $840.

There is but one question to be determined in this case, and that is whether or not the facts and circumstances attending the deposit in question constitute it a special, as distinguished from a general, deposit.

A bank deposit is presumed to be general, and the burden is on plaintiffs in this case...