In re Receivership of Security Savings Bank of Perry
| Decision Date | 07 February 1928 |
| Docket Number | 37656 |
| Citation | 217 N.W. 831,205 Iowa 171 |
| Parties | IN RE RECEIVERSHIP OF SECURITY SAVINGS BANK OF PERRY. v. SECURITY SAVINGS BANK OF PERRY et al., Appellees GEORGE J. DUGAN, Trustee, Appellant, |
| Court | Iowa Supreme Court |
Appeal from Dallas District Court.--W. G. VANDER PLOEG, Judge.
The claimant, George J. Dugan, trustee, sought the allowance of a preferred claim against the assets of the Security Savings Bank of Perry in the hands of a receiver. The claim was allowed without preference, and the claimant appeals.
Reversed.
George J. Dugan and George H. Sackett, for appellant.
Ben J Gibson, Attorney-general, and Harry Wifvat, for appellees.
The following opinion was written by Justice Vermilion prior to the time of his death, and is now adopted as the opinion of the court.
It appears without dispute that the appellant, George J. Dugan was the attorney for the administrator with the will annexed of the estate of John Charles White, and was also an agent or representative of the Western Surety Company. It also appears that it was in contemplation that a loan was to be made upon the property of the White estate, to prevent the sale of real estate to pay debts. In the negotiations for the loan, it became necessary for the representatives of the estate to furnish a bond. The bond appears to have been executed by Dugan, as the representative of the Western Surety Company. Before doing so, however, he required that the payment of the premium therefor be secured. This was done, after some adjustment of the amount by the deposit by the heirs of the White estate of the amount of the premium, $ 314.53, with the Security Savings Bank, for which certificate of deposit or cashier's check was issued. This was held by Dugan, pending the completion of the loan and the delivery of the bond.
On the day that the bank closed its doors, but before that event, and while it was still transacting business as a going concern, Dugan, through a representative, demanded payment of the $ 314.53. His representative was induced by the officers of the bank to leave the amount in the bank on special deposit, and to accept the following certificate:
On the back of the instrument appears the following:
It also appears, as shown by the books of the bank, that there was cash on hand in the bank on that day in the sum of $ 1,318.53; and there is no dispute but that this amount came into the hands of the receiver.
I. Although it appears without dispute that the officers of the bank were familiar with the entire transaction, and knew that the purpose of the original deposit was to pay the premium on the bond, it is clear that the bank, prior to the issuance of the instrument above set out, assumed no duty with respect to the deposit other than to pay the amount thereof to Dugan, or on his order, on return of the certificate or cashier's check. It was, prior to that time, a general deposit, and the relation of the bank was not changed by the fact, or knowledge on the part of the officers of the bank, that Dugan was holding the money as trustee. Officer v. Officer & Pusey, 120 Iowa 389, 94 N.W. 947.
II. To entitle the appellant to a preference, it must appear (1) that the bank held the money as trustee, and (2) that the funds of the bank were thereby augmented, and so passed into the hands of the receiver.
It is a well established doctrine that if, from the nature of the transaction, it appears that the relation of a claimant and a bank is that of principal and agent, the money of the claimant is held by the bank as trustee, and the claimant is entitled to a preference, on the insolvency of the bank, upon a proper tracing of the money into the hands of the receiver. Nurse v. Satterlee, 81 Iowa 491, 46 N.W. 1102; Whitcomb v. Carpenter, 134 Iowa 227, 111 N.W. 825; Messenger v. Carroll Tr. & Sav. Bank, 193 Iowa 608, 187 N.W. 545.
It is also well settled that a special deposit, or a deposit for a specific purpose, creates a trust relation, as between the depositor and the bank, which will entitle him to a preference. Officer v. Officer & Pusey, supra; Hudspeth v. Union Tr. & Sav. Bank, 196 Iowa 706 (31 A. L. R. 466, 195 N.W. 378), and cases cited in note in the latter publication. See, also, 7 Corpus Juris 631, 751.
Here the character of the deposit as special was recognized, the purpose for which the money was to be used was designated, and the right of the depositor to a preference was secured by the express terms of the certificate issued by the bank, the written contract between the parties. The basic fact upon which a preference must be predicated,--the existence of a relation of trust between the bank and the claimant,--could not be more definitely and certainly established.
III. The question remains whether the funds in the hands of the bank were augmented by the transaction. It cannot be doubted that, if the...
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Bank v. Sec. Sav. Bank of Perry (In re Sec. Sav. Bank), 37656.
...205 Iowa 171217 N.W. 831IN RE SECURITY SAV. BANK ET AL.DUGANv.SECURITY SAV. BANK OF PERRY ET AL.No. 37656.Supreme Court of Iowa.Feb. 7, ... , trustee, sought the allowance of a preferred claim against the assets of the Security Savings Bank of Perry in the hands of a receiver. The claim was allowed without preference, and the ... ...