In re Hodiamont Bank

Decision Date03 March 1936
CourtMissouri Court of Appeals

Appellant's motion for rehearing overruled March 20 1936.

Appeal from Circuit Court of St. Louis County.--Hon. Jerry Mulloy Judge.


Judgment affirmed.

Lashly, Lashly & Miller and Arthur V. Lashly for appellant.

(1) Claimant-respondent's pleading and proof failed to conform to the statute. Claimant-respondent is not entitled to a "preferred" claim for the reason that claimant-respondent failed to allege and prove the facts required by Revised Statutes of Missouri, 1929, section 5337, namely, that its claim, if any, was duly filed, and that sixty days had elapsed since the expiration of the time for filing claims and that said claim had not been approved. Church v. Cantley, Commissioner of Finance (1932, K. C.), 226 Mo.App. 670, 45 S.W.2d 117; Federal Land Bank v. Cantley (1931, K. C.), 226 Mo.App. 559, 44 S.W.2d 269; Mann v. Farmers Bank (1932, K. C.), 227 Mo.App. 1, 50 S.W.2d 146; R. S. of Mo. 1929, sec. 5337. (2) Claimant-respondent's claim for preference is necessarily grounded on a cashier's check, and where, as here, the evidence fails to show fraud in its issuance claimant is not entitled to a preference. A claimant depositor is not entitled to a preference where it appears that he requested and received a cashier's check payable to the depositor or his agent for the amount of a general checking account deposit; and it has been uniformly held that a claimant depositor is not entitled to a preference where he "accepts a cashier's check" for his general deposit after the bank had refused an adequate demand for a cash payment of said deposit, although having sufficient funds available for the payment thereof; that claimant by accepting said cashier's check waives his previous preferential status, if any, and his claim for preference must necessarily be grounded upon the cashier's check; that there is no fraud on the part of the bank, although it appears that the bank's agent knew, or had reasonable grounds to believe, that the bank was insolvent at the time of the issuance of the cashier's check. Banker of M. W. of A. v. Harrison (1933, Mo.App. Springfield) [*], 62 S.W.2d 486; Hennemann v. Rosebud Bank et al. (1935, Mo.App. K. C.) [*], 78 S.W.2d 113; South Carolina State Bank v. Citizens Bank (1934), 173 S.C. 496, 176 S.E. 346; Milne v. Viegel et al. (1927), 170 Minn. 66, 211 N.W. 594; Leach v. Citizens Bank, 202 Iowa 879, 211 N.W. 526; Clark v. Chicago Title & Trust Co. (1900), 186 Ill. 440, 57 N.E. 1061; State ex rel. Nelson v. Builders Bank (1932), 264 Ill.App. 388; Perry Bank & Trust Co. v. Riggins et al. (1930), 233 Ky. 257, 25 S.W.2d 386; Walker, Supt. of Banks, v. Sellers (1918), 201 Ala. 189, 77 So. 715.

E. McD. Stevens and James E. King for claimant-respondent.

(1) Claimant's-respondent's "Pleading and Proof" conformed strictly to the requirements of the statute. Section 5336, R. S. Mo. 1929, prescribes the procedure to be followed after the claim has been accepted and also what shall be done in the event the commissioner rejects the claim, and section 5337 provides what shall be done when the commissioner has approved the duly filed claim and sets a limitation of the time within which suit may be instituted upon rejected claims, and section 5339 provides that the circuit court, upon application of the commissioner, shall specify what claims, if any, are entitled to priority of payment. Bowersock Mills & Power Company v. Citizens' Trust Company, 298 S.W., l. c. 1050; Claim of St. Rose's Church filed with the Commissioner of Finance, March 31, 1933, approved September 18, 1933 (page 14, Additional Abstract of the Record); Order of Court setting time for determination of questions of priorities granted; Clerk ordered to notify preferred claimants of said hearing (page 13, Additional Abstract of the Record); Notice to St. Rose's Church to appear and present evidence in support of claim for priority (page 13, Additional Abstract of the Record). Quoting from the Commissioner of Finance's petition, filed September 23, 1933, in the Circuit Court of St. Louis County, Missouri, entitled, "Petition for order setting time for consideration of claims and determination of questions of priorities:" "Comes now Harold L. Keller and respectfully represents and shows to the court that he is the duly appointed, qualified and acting Special Deputy Commissioner of Finance of the State of Missouri, in charge of the effects and property of the Hodiamont Bank. Your petitioner states that he is filing herewith certain claims which have been filed with your petitioner by creditors of the Hodiamont Bank, pursuant to a notice heretofore given to file said claims in accordance with the laws of the State of Missouri pertaining thereto. Your petitioner states that the claimant in each of said claims has requested priority . . . your petitioner states that he files these claims herein in accordance with the laws of the State of Missouri pertaining to the procedure in such cases . . . for the purpose of having the questions of priorities claimed . . . determined by the court . . . Claim 394, St. Rose's Church, Goodfellow avenue, $ 15,000" (page 4, Additional Abstract of Record). (2) Claimant's-respondent's claim for preference is not necessarily grounded on a cashier's check and the evidence does show fraud in its issuance. The cases cited by appellant are obviously not applicable to the facts of this case and this is apparent from the statement of law as set out by appellant: "A claimant depositor is not entitled to a preference where it appears that he requested and received a cashier's check," etc. Here, as shown by all the evidence, the depositor demanded cash and by fraud was induced to take a cashier's check. The officers of the bank had reason to believe at the time they issued the draft, instead of the cash requested, that the payment of same would be refused. R. S. Mo. 1929, sec. 5382; St. Louis-San Francisco Ry. Co. v. Millspaugh, 220 Mo.App. 110. 278 S.W. 786; Missouri Public Service Co. v. Cantley, 57 S.W.2d 755. (3) So long as the bank remained open in charge of its officers, transacting business with sufficient cash assets to pay checks when presented, drawn by depositors with sufficient assets to pay them, it was required to pay them as presented. Farmers' Bank of Deepwater v. Moberly, 78 S.W.2d 906; Kahmann et al. v. Moberly, 77 S.W.2d 858, l. c. 861; Koehler v. Joplin State Bank et al., 68 S.W.2d 728; Thomson v. Bank of Gerster et al., 74 S.W.2d 74; Blackshaw v. French, 45 S.W.2d 916; Farmers' Bank of Bowling Green v. Cantley, 16 S.W.2d 642. Where depositor demands his money, and bank, not having sufficient funds on hand, issued him draft on another bank in which drawing bank had money, and drawing bank closed next day and payment of draft was refused, failure to pay draft created trust funds in hands of liquidating officer for amount thereof and depositor was entitled to preference. Thomson v. Bank of Gerster et al., 74 S.W.2d 74. In the above case the court says, "Had plaintiff gone to the bank for the purpose of buying a draft and the draft had been issued on his check, the contention of defendants would be sound, but where a draft is issued under the circumstances shown in the case at bar we think the effect of the whole transaction was the same as if plaintiff had been refused payment of his check for the amount of the draft, as in the case of Johnson v. Farmers' Bank of Clarksdale, 223 Mo.App. 513, 11 S.W.2d 1090, l. c. 1092." (4) Claimant-respondent is entitled to a preference under the provision of the Uniform Bank Collection Code enacted in Missouri in 1929, Laws Missouri 1929, p. 205, now sections 5565 to 5575, R. S. Mo. 1929, particularly the last-mentioned section, to-wit: R. S. Mo. 1929, sec. 5575, par. 2. When a payor bank has presented to it for payment an item . . . payable at such bank . . . and at the time has on deposit to the credit of the maker an amount equal to such item and such drawee shall fail or close for business . . . after having charged such item to the account of the maker . . . but without such item . . . having been paid . . . the assets of such drawee shall be impressed with a trust in favor of the owner of such item . . . and such owner shall be entitled to a preferred claim upon such assets, irrespective of whether the fund representing such item can be traced and identified as part of such assets or has been intermingled with or converted into other assets of such failed bank. Bank of Republic v. Republic State Bank, 328 Mo. 848, 42 S.W.2d 27, l. c. 31; Farmers Exchange Bank of Marshfield v. Farm & Home S., etc., Ass'n, 332 Mo. 1041, 61 S.W.2d 717, l. c. 720; People ex rel. Nelson v. Denhardt, 353 Ill. 450, 188 N.E. 464; In re Farmers & Merchants Bank of Center, 83 S.W.2d 198; Johnson v. Farmers Bank of Clarksdale, 223 Mo.App. 513, 11 S.W.2d 1090; Bank of Poplar Bluff v. Millspaugh, 313 Mo. 412, 281 S.W. 733. Additional citations to respondent's brief filed by leave of court: Shell Petroleum Corp. v. Sturdivant Bank, St. Louis Court of Appeals, Dec. 3, 1935, 87 S.W.2d 1064; Bank of Illmo v. Sturdivant Bank, No. 23037, St. Louis Court of Appeals, Opinion filed Jan. 7, 1936.

BENNICK, C. Hostetter, P. J., and Becker and McCullen, JJ., concur.



--This is an appeal by Meredith C. Jones, the special deputy commissioner of finance in charge of the liquidation of the Hodiamont Bank, from the judgment and decision of the Circuit Court of St. Louis County awarding priority to the claim of St. Rose's Church in the amount of $ 15,000....

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