Farmers' Bank of Deepwater v. Moberly
| Decision Date | 07 January 1935 |
| Citation | 78 S.W.2d 906,229 Mo.App. 595 |
| Parties | FARMERS BANK OF DEEPWATER, APPELLANT, v. O. H. MOBERLY, COMMISSIONER OF FINANCE, ETC., RESPONDENT |
| Court | Kansas Court of Appeals |
Appeal from the Circuit Court of Henry County.--Hon. Leslie A Bruce, Judge.
REVERSED AND REMANDED (with instructions).
Dewey P. Thatch, Jas. A. Parks, Elmer B. Silvers, Chas. E. Hassett and Arnold Conrad for appellant.
Haysler A. Pogue and Floyd L. Sperry for respondent.
This is an action by a depositor for preference on claim presented for allowance in liquidation of a bank's affairs, in the hands of the defendant finance commissioner, for $ 2500 of a deposit in said bank, based upon the failure of such bank while a going concern, to pay the depositor's check drawn and presented therefor.
It appears from the record that the plaintiff is a banking corporation doing business at Deepwater, Missouri, and that it was such and was so doing business at all the dates and times mentioned herein and that, on November 19, 1932, it had on deposit to its credit, subject to check, with the Brinkerhoff-Faris Trust & Savings Company--the said Brinkerhoff-Faris Trust & Savings Company at such time being also a banking corporation and doing business at Clinton, Missouri--the sum of $ 2714.78. On November 19, 1932, plaintiff drew its check for $ 2500 upon said Brinkerhoff-Faris Trust & Savings Company against its said deposit and endorsed and delivered the same for collection and for its credit to and with the Drovers National Bank in Kansas City, Missouri. This check, bearing the endorsement of plaintiff and likewise the cancelled endorsement of the Drovers National Bank thereon, was returned to plaintiff by the Drovers National Bank unpaid with the following printed slip attached thereto:
The endorsement of the Drovers National Bank upon said check appears under date of November 21, 1932, while the cancellation of such endorsement appears under date of November 23, 1932. The check was presented to the Brinkerhoff-Faris Trust & Savings Company between such dates on November 22, 1932, and payment thereof refused by it because it was drawn for an amount in excess of the limit of $ 10 provided by it therefor in its resolution, as above shown.
On February 6, 1933, the assets and affairs of the said Brinkerhoff-Faris Trust & Savings Company were taken in charge by the defendant O. H. Moberly, as finance commissioner of the State of Missouri, for liquidation as an insolvent institution, it having failed and closed its doors. From such date, its assets and affairs have been in process of liquidation in charge of the defendant finance commissioner; and it will be hereinafter referred to, for convenience, as the liquidating bank.
On November 21, 1932, the liquidating bank, by its board of directors, adopted the following resolution, to-wit:
"Resolved, that a limit of ten dollars per day be placed on all withdrawals of deposits beginning Tuesday morning, November 22, 1932; this action being deemed advisable in order to protect the funds of this institution for the benefit of all depositors."
The following also appears from the record in its minutes:
It appears that, at such time, said H. P. Faris and G. C. Lingle were, respectively, the president and the vice-president of the said Brinkerhoff-Faris Trust & Savings Company.
On November 25, 1932, upon request of certain officers of the liquidating bank, the city council of Clinton adopted a resolution directing its mayor, the Honorable Floyd L. Sperry, to issue his proclamation declaring a thirty day holiday for all banks and trust companies in the city, beginning the morning of November 25, 1932, which proclamation was accordingly issued, and all such banks and trust companies were requested to observe the same; and it appears to have been observed by the liquidating bank, in part but not fully. It appears from stipulations of the parties in the record that, following the adoption of the resolution of November 21, 1932, the doors of such bank were opened as usual by its directors and officers on the morning of November 22, 1932, and that it, in charge of such officers and directors, transacted business on that day and the succeeding day, as usual, except it failed to pay checks, if any, against demand deposits where such checks exceeded $ 10 or where the total amount of the checks drawn against any one account exceeded $ 10 in any one day. The record fails to show the number or amount of checks so presented, if any, from the morning of the twenty-second to and including the twenty-fourth, other than plaintiff's. November 24, 1932, being a legal holiday, it remained closed upon such date; and, after the issuance of the proclamation by the mayor declaring a moratorium, beginning November 25, 1932, for thirty days, it remained closed until February 6, 1933, at which time the defendant State commissioner of finance took it in charge. It further appears that, until such date of February 6, 1933, such bank and all of its assets remained in charge of its officers and directors, who, during such time, converted some of its assets into cash and made certain disbursements on account of salaries to its officers and employees and for other items; that, on said date and at the time the liquidating bank was taken in charge by the defendant finance commissioner, the plaintiff's deposit of $ 2714.78 remained in said bank as it was on November 19, 1932, and had thereafter remained, subject to check. Statements of the liquidating bank's financial condition on November 22, 1932, and on February 6, 1933, appear in the record.
On June 10, 1933, plaintiff filed with the deputy commissioner of finance, in charge of the liquidating bank, its verified claim for the total amount of its deposit with said bank at the dates mentioned above in the sum of $ 2714.78, seeking the allowance of $ 214.78 thereof as a common claim and of $ 2500 thereof as a preferred claim or as one entitled to a preference.
It appears that the deputy commissioner in charge approved said claim in the full amount thereof, allowing $ 214.78 as a common claim and certifying the balance thereof to the circuit court for adjudication as to the preference sought therefor.
Upon a hearing in the latter court, the entire claim was allowed and classified as a common claim; and the classification of any part thereof as preferred or as being entitled to preference was denied; and judgment to such effect was rendered.
From such adverse judgment, plaintiff, after an unsuccessful motion for a new trial, appeals.
OPINION.1. It is contended by plaintiff that, because it had to its credit sufficient funds on deposit in the liquidating bank for the payment of its check on the date it was presented and because such bank had on hand at that time sufficient assets in cash with which to pay it, it became the duty of the liquidating bank to pay such check; that, upon its failure to do so, it thereafter held the amount of plaintiff's check in trust for plaintiff; and that the assets of the liquidating bank, passing into the defendant commissioner's hands and being augmented by the amount of such check, passed impressed with such trust, by reason of which, in the liquidation of the affairs of said bank, plaintiff is entitled to preference to the amount of its check in the order of the payment of its claim over the claims of other depositors not upon the same or some similar basis.
That such contention is well made if, at the time the check was presented, the liquidating bank was open transacting business with its assets and affairs unaffected by liens and process of law and with such in the possession and charge of its officers seems to be the settled law of Missouri. That it is the duty of a bank to pay a check of a depositor upon presentation and demand where such depositor has on deposit to his account a sum sufficient to pay such check has been so often declared by the Supreme Court and other appellate courts of the State that it is no longer to be considered an open question. [Johnson v. Farmers' Bank of Clarksdale (Mo. App.), 11 S.W.2d 1090; Claxton v. Cantley (Mo. App.), 297 S.W. 975.]
It is likewise settled that, where the bank fails or refuses to pay a check under such circumstances, it, by operation of law upon such failure or...
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