In re Riverton State Bank

• Decision Date: 11 December 1934
• Docket Number: 1860
• Citation: 38 P.2d 603,47 Wyo. 469
• Parties: IN RE RIVERTON STATE BANK; v. WILDE, STATE EXAMINER MADDEN
• Court: Wyoming Supreme Court

38 P.2d 603

47 Wyo. 469

IN RE RIVERTON STATE BANK;

MADDEN v. WILDE, STATE EXAMINER

No. 1860

Supreme Court of Wyoming

December 11, 1934

APPEAL from the District Court, Fremont County, E. H. FOURT, Judge.

Suit by John Madden against A. E. Wilde, State Examiner, in charge of liquidation of the Riverton State Bank, an insolvent banking corporation. From the judgment, defendant appeals.

Affirmed.

For the appellant there was a brief by Ray E. Lee, Attorney General O. O. Natwick, Deputy Attorney General, and Wm. C. Snow Assistant Attorney General, all of Cheyenne.

The controversy involves a claim of preference made by respondent to the State Examiner as liquidator of insolvent bank and is based on Section 10-532, R. S., enacted as Section 3 of Chapter 141 of the Laws of 1929. It is our contention that the Act of 1929 is unconstitutional and void. The statute differs from the Ohio statute referred to in Fulton v Company, 125 O. S. R. 518. Section 10-532 deprives people of property without due process of law and denies equal protection of the laws. Article 14, Section 1, Constitution U. S. The statute differs in terms from those involved in Central Trust Company v. Bank, 153 S.E. 145; Central Trust Company v. Bank, 150 S.E. 137; Ex Parte Sanders, 167 S.E. 154; Witt v. Bank, 164 S.E. 306. In Nettles v. Bank, 153 S.E. 214, a similar statute was held to be violative of the due process clause of the Constitution. The judgment of the trial court is contrary to law. Foster v. Rincker, 4 Wyo. 484; State v. Foster, 5 Wyo. 199; Development Company v. Giinther, 32 Wyo. 294; Gray v. Elliott, 37 Wyo. 4; Vermont Company v. Bank, 37 Wyo. 216.

For the respondent, there was a brief by F. A. Michels, of Lander, and F. B. Sheldon, of Riverton. Both sides submitted cause without oral argument.

The findings and judgment of the trial court are supported by the evidence. Yellowstone Sheep Company v. Diamond Co., 43 Wyo. 15. The appellate court will not disturb a judgment where there is evidence upon which the finding may reasonably be based. Hunt v. City of Laramie, 181 P. 137. Saratoga Land Company v. Jensen, 20 Wyo. 323; Perka v. Rock Springs Commercial Company, 37 Wyo. 98. As between the immediate parties, the form of an indorsement is not conclusive, but the nature of the contract may be proved by parol evidence. U. S. National Bank of Omaha v. Geer, 73 N.W. 266. The case comes squarely within the provisions of Section 10-532 and Section 10-713, R. S. 1931. These statutes were enacted at the legislative session following the decision in Vermont Loan Company v. Bank, 37 Wyo. 216. The rule of proof requiring the tracing of funds in order to establish a trust has been changed by these statutes in order to meet a clear injustice.

BLUME, Justice. KIMBALL, Ch. J., and RINER, J., concur.

OPINION

BLUME, Justice.

In this case the court rendered judgment declaring the claim of John Madden, hereinafter referred to as the claimant, to be a preferred claim against all of the assets of the Riverton State Bank, now in the process of liquidation. From this judgment the State Examiner has appealed. He allowed the claim as a general one, and contends that it should not have been allowed as a preferred claim.

The evidence shows: On July 25, 1932, claimant had in his possession a check, apparently on a Wisconsin bank, for the sum of $ 9668.10. On that day he, in company with Mrs. Burke, went to the Riverton bank and interviewed Mr. McGeown, the cashier of the bank. The claimant wanted to use part of the money, and after the cashier had, by telegram, found out that the check was good, it was agreed that the claimant might use of the sum of $ 1668.10 immediately and check against it. The Wisconsin check was to be sent through the regular channels and collected and the cashier agreed to send the balance of the sum, namely, $ 8000, to claimant's sister in law in Wisconsin. The check was accordingly deposited. The deposit slip was written out by the cashier. It was for the sum of $ 9668.10, and contains the statement: "In receiving items for deposit or collection, the bank acts only as depositor's collecting agent." On the books of the bank, the claimant was given credit for the total amount of deposit, namely $ 9668.10. At the same time the cashier gave to claimant a blank check book. The latter drew checks against the deposit, six in all, in the total sum of $ 1660.93, leaving of the above sum of $ 1668.10 only the sum of $ 7.17. All the checks were issued and paid on July 25, 1932. On August 6 thereafter claimant sent a telegram from Milton Junction, Wisconsin, to the Riverton State Bank reading: "Please send balance my account care of Farmers Bank Milton Junction Wisconsin." On August 9, 1932, the Riverton Bank issued its cashier's check for $ 8007.15. This check was deposited in the Farmer's Bank a few days thereafter, sent through the mails for collection, but was not paid because the Riverton bank closed its doors on August 20,1932.

1. The Attorney General, on behalf of the State Bank Examiner, contends that there is no substantial evidence to support the finding that the claimant should have a preferred claim, for the reason that the evidence clearly indicates that when claimant deposited his Wisconsin check, the relation of creditor and debtor arose between him and the bank. What the relation herein was, both before as well as after the Wisconsin check was collected, depends upon the intention of the parties. 3 R. C. L. 633; Hudson v. State, (Del.) 35 Del. 23, 156 A. 881, 80 A. L. R. 219; S.E. Hall Ind. v. Trust & Savings Bank, 177 La. 659, 148 So. 909; Brennan v. Holden, 4 F.Supp. 285, 288. The Attorney General has overlooked the deposit slip which states the relation to be that of principal and agent. And while such statement is not necessarily conclusive, it is material evidence of such intention. Brennen v. Holden, supra; King v. Bowling Green Trust Co., 145 A.D. 398, 129 N.Y.S. 977. That intention must, of course, be held to be modified herein to the extent of $ 1668.10. Claimant and Mrs. Burke both testified that the bank was to act only as collecting agent in so far as the sum of $ 8000 was concerned, and this amount, when collected, was to be sent to Wisconsin. The stubs of the check book given claimant show that he was to check against only the sum of $ 1668.10. The stub of the first check was filled out by the cashier, according to the testimony of Mrs. Burke, and by Mrs. Burke, according to the testimony of the claimant himself. This stub indicates that it was changed, and that claimant, instead of having a checking account of only $ 1668.10, had a checking account for the total amount of the Wisconsin check, namely the sum of $ 9668.10, thus indicating that the relation of debtor and creditor arose as to the whole amount. But even if we accept as true, as the attorney general contends we should do, that Mrs. Burke, instead of the cashier, filled out the first stub, this would not change the situation, for the evidence is uncontradicted that the cashier filled out the stub of the second check, and that shows no changes, but was filled out on the basis of the contention that the claimant had a checking account only as he claimed, namely, for the sum of $ 1668.10. The foregoing evidence was sufficient, we think, in warranting the court in holding that the relation of the bank, both before as well as after the Wisconsin check was collected, was that of agency. We do not think that the telegram sent by claimant, and hereinbefore set out, negatives that relation. It mentions "my account." But that does not, we think, necessarily postulate the existence of the relation of debtor or creditor, particularly in view of the positive and uncontradicted testimony tending to show the contrary.

The Attorney General, to sustain the contention that the relation of debtor and creditor existed in the case at bar, has cited us to the case of Ex parte Sanders, 168 S.C. 323, 167 S.E. 154. In that case a depositor of a bank drew a check against his deposit, and in exchange requested cash in the sum of $ 100 and a draft on a definite bank. It was held that the relation of creditor and debtor existed; further than in view of the fact that the assets of the bank were not augmented, he could have no preferred claim upon the insolvency of the bank. Two of the justices dissented. The case is distinguishable from the case at bar: (1) There can be no question that the assets of the Riverton bank were augmented when it received and cashed the Wisconsin check delivered to it by the plaintiff; (2) the claimant in this case was not a depositor of the bank until the check in question was deposited, and (3) he did not request a draft or check on any particular bank in payment of the collection which was to be made. The fact that the claimant became a creditor as to part of the deposit cannot, logically, be made conclusive of the fact that he became such as to the proceeds of the whole check deposited for collection. It doubtless is a circumstance in determining the relation as to the whole deposit, but that is all. It cannot be said to be controlling in the face of evidence which establishes the relation of principal and agent as to part of the deposit.

Inasmuch, then, as the Riverton bank must be held to have acted in a fiduciary capacity, namely, as agent for the claimant, it follows that under the holding of this court in State v. Foster, 5 Wyo. 199, 38 P. 926; Foster v. Rincker, 4 Wyo. 484, 35 P. 470; Lusk Development Co. v. Giinther, 32 Wyo. 294, 232 P. 518 and Vermont Loan & Trust Co. v. First National Bank, 37 Wyo. 216, 260 P. 534, the claimant herein must be held to have a preferred claim, at least as against the fund of money on hand at the time of the insolvency of...