J. A. Willoughby & the Capitol Nat'l Bank v. Weinberger

• Decision Date: 11 January 1905
• Citation: 1905 OK 6,15 Okla. 226,79 P. 777
• Parties: J. A. WILLOUGHBY and THE CAPITOL NATIONAL BANK v. J. WEINBERGER.
• Court: Oklahoma Supreme Court

1905 OK 6

79 P. 777

15 Okla. 226

J. A. WILLOUGHBY and THE CAPITOL NATIONAL BANK v. J. WEINBERGER.

Supreme Court of Oklahoma

Decided: January 11, 1905

Syllabus

¶0 NATIONAL BANK--Depositor Entitled To Preference, When. J Weinberger deposited $ 80.00 in cash in the Capitol National Bank of Guthrie at 11:50 A. M., on April 4th, 1904. At the time the deposit was made the bank was insolvent and it closed its doors at 2:20 P. M. on the same day. There was deposited during the day while the bank was open, $ 12,857.39 in cash. The bank had on hand in cash when it closed, $ 20,000.00: Held, that in an action against the receiver of the bank, in the absence of evidence establishing that the bank had paid out or converted the $ 80.00, it will be presumed that the bank, in transacting its business on the day the deposit was made, used its own money and did not appropriate the appellee's money which had been received by fraud; it being a fraud for a bank to receive money when it is in a failing condition; and the appellee was entitled to have his claim for such cash deposit paid in preference to the general creditors. At the time the appellee deposited the $ 80.00 in cash, he also deposited checks on the different banks of Guthrie with the Capitol National Bank, amounting in all to $ 135.42, and all of these checks were used by it in settling its account with the clearing house; and, even after transferring and delivering all of these, together with other checks, to the clearing house, there was still a balance due to the clearing house which was settled in another way: Held, that as the Capital National Bank, before it closed its doors, used the checks to pay a debt owed by it, and neither the checks or any cash or property received in exchange for them came into the hands of the receiver, the appellee should be denied a preference as to them, but that his rights as to such checks should be on an equality with the general creditors.

Error from the District Court of Logan County; before J. L. Pancoast, Trial Judge.

Flynn & Ames, for plaintiffs in error.

Cotteral & Horner, for defendant in error.

BURWELL, J.

¶1 The Capitol National Bank of Guthrie, on April 4th, 1904, was in a failing condition, which was known to the officers of the bank. The appellee, Weinberger, at 11:50 A. M. on that date, made a deposit with the bank as follows:

Currency, $ 70.00

Silver, 10.00

Sundry checks on the Capitol National. Bank 46.80

Sundry checks drawn on other banks in Guthrie, 135.42

¶2 The bank closed its doors at 2:30 P. M., or two and a half hours after the deposit was made. The cash on hand in the bank when it closed was in excess of the cash deposited during the day. The checks on the other banks in Guthrie deposited by appellee were used with the clearing house to take up the checks which it held against the Capitol National Bank, but after using all of the checks which the Capitol National Bank held on the other banks there was still a balance due to the clearing house, which was settled in another way. Weinberger, after the receiver for the bank was appointed, commenced this suit for a preference for the cash and checks on other banks deposited with the defunct bank, it being conceded by him that he is not entitled to preference for the checks on the Capitol National Bank. Therefore, those checks, amounting to $ 46.80, are eliminated from our consideration.

¶3 The trial court rendered judgment for Weinberger, allowing him a preference for both cash and for checks on other banks, from which the receiver appealed; but, in so far as it related to the preference for the cash deposited, the judgment must be sustained.

¶4 The evidence establishes that the total cash deposited during the entire day while the bank was open for business was $ 12,857.39. It began business in the morning with $ 54,126.92 in cash in its vaults. When the bank closed it had on hand in cash, $ 20,000. The...