Lucas v. Central Missouri Trust Co.

• Decision Date: 12 November 1942
• Docket Number: 37667
• Citation: 166 S.W.2d 1053,350 Mo. 593
• Parties: Ray B. Lucas, Superintendent of the Insurance Department of the State of Missouri, Appellant, v. Central Missouri Trust Company, a Corporation
• Court: Missouri Supreme Court

166 S.W.2d 1053

350 Mo. 593

Ray B. Lucas, Superintendent of the Insurance Department of the State of Missouri, Appellant, v. Central Missouri Trust Company, a Corporation

No. 37667

Supreme Court of Missouri

November 12, 1942

Rehearing Denied January 4, 1943.

Appeal from Jackson Circuit Court; Hon. Albert A. Ridge Judge.

Affirmed.

Roy McKittrick, Attorney General, Covell R. Hewitt and Harry H. Kay, Assistant Attorneys General, for appellant; Charles L. Henson of counsel.

(1) The Circuit Court of Cole County did not have jurisdiction of the rate review case. American Constitution Fire Assur. Co v. O'Malley, 342 Mo. 139, 113 S.W.2d 795; State ex rel. Robertson v. Sevier, 342 Mo. 346, 115 S.W.2d 810; American Constitution Fire Assur. Co. v. O'Malley, 343 Mo. 198, 120 S.W.2d 43. (2) The Circuit Court of Cole County did not have jurisdiction to administer the funds impounded in connection with the rate review case. American Constitution Fire Assur. Co. v. O'Malley, supra; State ex rel. Robertson v. Sevier, supra; American Constitution Fire Assur. Co. v. O'Malley, supra; State ex rel. Carwood Realty Co. v. Dinwiddie, 343 Mo. 592, 122 S.W.2d 912. (3) The Superintendent of Insurance was the legal custodian of the impounded funds. American Constitution Fire Assur. Co. v. O'Malley, 342 Mo. 139, 113 S.W.2d 795; State ex rel. Lucas v. Blair, 346 Mo. 1017, 144 S.W.2d 106; State ex rel. Carwood Realty Co. v. Dinwiddie, supra. (4) The order of the Circuit Court of Cole County dated January 21, 1933 (made upon the motion filed by respondent bank), ordering the impounded funds taken away from the Superintendent of Insurance, the lawful custodian thereof, and placed in the hands of the clerk of said court, and directing future impoundment in the hands of said clerk, subject to the custody and control of said court, and directing that said funds be deposited in banks, was void since such order was an assumption of administration of said impounded funds by said court. See cases cited under Points (1) and (2) above. (5) Likewise, the order of the Circuit Court of Cole County dated February 18, 1936, construing its previous order of January 21, 1933, and formally naming the clerk of said court as custodian and directing said custodian to deposit said fund in banks, and undertaking to empower said custodian to draw checks against said impounded fund, and to administer said fund, was void since by said order the court undertook specifically to administer the fund and direct its disbursement. See cases cited under Points (1) and (2) above. (6) Void orders of a court are nullities and protect no one who acts upon them. Freeman on Judgments (4th Ed.), sec. 117; State ex rel. Abeille Fire Ins. Co. v. Sevier, 335 Mo. 269, 73 S.W.2d 361; Ralph v. Annuity Realty Co., 325 Mo. 410, 28 S.W.2d 662; United Cemeteries Co. v. Strother, 342 Mo. 1155, 119 S.W.2d 762. (7) The placing of the impounded funds in the respondent bank subject to check, under orders of the Circuit Court of Cole County, which did not have jurisdiction to administer said funds, did not amount to a deposit of said funds, and did not create the relation of debtor-creditor between the custodian appointed by said court, or the court itself, and the respondent bank, but the respondent bank, by accepting such funds under such conditions, accepted them in violation of law, and hence became a trustee ex maleficio of said funds, said bank being charged, as all men are, with knowledge of the statutes of the State and a correct interpretation thereof. State v. Weatherby, 344 Mo. 848, 129 S.W.2d 887; State ex rel. Abeille Fire Ins. Co. v. Sevier, 335 Mo. 269, 73 S.W.2d 361; 7 Am. Jur., sec. 442; William R. Compton Co. v. Farmers' Trust Co., 279 S.W.2d 746; Special Road District No. 4 v. Cantley, 8 S.W.2d 944; Huntsville Trust Co. v. Noel, 12 S.W.2d 751; State ex rel. Gentry v. Page Bank of St. Louis County, 14 S.W.2d 597; Andrews v. Farmers' Trust Co., 21 S.W.2d 641; City of Macon v. Farmers' Trust Co., 21 S.W.2d 643; Aurora School District v. Bank of Aurora, 227 Mo.App. 339, 52 S.W.2d 484; Hart v. Kirksville Savs. Bank, 82 S.W.2d 612; Dobyns v. Bank of Ava, 99 S.W.2d 495; In re Cameron Trust Co., 300 Mo. 1070, 51 S.W.2d 1025. (8) As trustee ex maleficio, respondent bank is liable to account to appellant, Superintendent of Insurance, for all money it received as such trustee, and for the profits and earnings from its use of said money in its business operations. Bogert, Trusts and Trustees, sec. 471. (9) The Circuit Court of Cole County and its custodian held the impounded funds with authority only to turn said funds over to the Superintendent of Insurance, and when the bank received said funds charged with knowledge of the law which required said funds to be in the custody and control of the Superintendent of Insurance, it became bound to the execution of that trust, to-wit, the return of said funds to the Superintendent of Insurance. Mann v. Bank of Greenfield, 323 Mo. 1000, 20 S.W.2d 502; Clearmont School District v. Jackson Bank, 37 S.W.2d 1006; Harrison Township v. Peoples State Bank, 329 Mo. 968, 46 S.W.2d 165. (10) Even though it be conceded, for the sake of argument only, that the circuit court had a right to put the funds in the respondent bank, the placing of said funds in said bank by the court amounted to a bailment of said funds for the benefit of the Superintendent of Insurance, and the respondent thereby became a bailee or trustee of a special deposit. Van Wagoner v. Buckley, 133 N.Y.S. 599. (11) Respondent bank admits that of the funds received by it belonging to the policyholders it did not return the sum of $ 133,411.14 either to the policyholders or to their trustee, the Superintendent of Insurance, and hence respondent is liable to account for said amount.

W. T. Ragland and Chas. H. Mayer for respondent; Ragland, Otto & Potter and Conkling & Sprague of counsel.

(1) This case was tried below on the sole theory that the defendant trust company, in accepting deposits of the fund illegally collected by the insurance companies in the 16 2/3 per cent case, had acted illegally, and therefore and thereupon had become a trustee ex maleficio of said fund. (2) Respondent bank did not, as a depositary of the circuit court, wrongfully receive for deposit the funds which had been impounded in the registry of that court. State ex rel. North British & Mercantile Ins. Co. v. Thompson, 330 Mo. 1146; State ex inf. McKittrick v. American Colony Ins. Co., 336 Mo. 406; American Constitution Fire Assur. Co. v. O'Malley, 342 Mo. 139; State ex rel. Lucas v. Blair, 346 Mo. 1017. (3) The petition did not and would not sustain a judgment based on the theory upon which the case was tried below. (4) The circuit court did not act beyond its authority in depositing the illegally collected fund in the defendant trust company. State ex rel. North British & Mercantile Ins. Co. v. Thompson, 330 Mo. 1146; State ex inf. McKittrick v. American Colony Ins. Co., 336 Mo. 406; American Constitution Fire Assur. Co. v. O'Malley, 342 Mo. 139; State ex rel. Lucas v. Blair, 346 Mo. 1017. (5) Even if the Supreme Court overruled its holding in the mandamus case (330 Mo. 1146) and in the quo warranto case (336 Mo. 406), and meant nothing in the American Constitution Fire Assurance Company case (342 Mo. 139) when it held that it was the duty of the circuit court to protect the fund, and even if the circuit court acted in excess of its authority when it deposited the fund in the defendant trust company (all of which respondent denies), still the trust company, in accepting the deposit, did nothing which was either actually or constructively fraudulent, and therefore, absent the essential element upon which to base it, there can be no constructive trust created. 22 C. J., p. 150, par. 7 of sec. 85; United States v. Realty Co., 163 U.S. 427, 41 L.Ed. 215; Brent v. The State, 43 Ala. 297; People v. Santa Clara Lbr. Co., 134 N.Y.S. 509; Delouche v. Rosenthal, 78 So. 970; In re West St. Louis Trust Co. v. Brokaw, 232 Mo.App. 209. (6) The trust company was and is protected by Section 5458, R. S. Mo. 1929, against any liability for money paid out upon checks drawn by its depositor. See 5458, R. S. 1929. (7) Whether the petition be for money had and received, or a suit in equity, the same equitable principles apply, and the judgment ought to be affirmed because there is no equity in plaintiff's case; in equity and good conscience, the plaintiff is not entitled to recover.

Barrett, C. Westhues, C., not sitting; Bohling, C., concurs.

OPINION

BARRETT

This is an action by the Superintendent of the Insurance Department of the State of Missouri against the Central Missouri Trust Company of Jefferson City. The purpose of the suit is to recover the specific sum of $ 133,411.14 of the $ 1,798,911.12 impounded 16 2/3 per cent increased insurance premium funds which were deposited in the defendant bank. The $ 133,411.14 was withdrawn from the bank by checks on orders of the Circuit Court of Cole County for the purpose of compensating the court's custodian of the fund, the then circuit clerk, his attorney, stenographic and clerical help, stationery and supplies, rent for an office and other expenses incurred in carrying out the orders of the court in administering or handling the fund.

Though we are unable to balance the sums as set forth in the plaintiff's brief, from which we make this statement of the facts, $ 250,000.00 of the total fund was withdrawn and deposited in the Exchange National Bank of Jefferson City, $ 175,000.00 was withdrawn and deposited in the Commerce Trust Company of Kansas City and $ 7,086.83 was withdrawn to make refunds to certain of the insurance companies, who collected the fund, on account of policy cancellations. The...