Lucas v. Central Missouri Trust Co.

• Decision Date: 05 May 1942
• Docket Number: 37428
• Citation: 162 S.W.2d 569,349 Mo. 537
• Parties: Ray B. Lucas, Superintendent of the Insurance Department, Appellant, v. Central Missouri Trust Company
• Court: Missouri Supreme Court

162 S.W.2d 569

349 Mo. 537

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

No. 37428

Supreme Court of Missouri

May 5, 1942

Rehearing Denied June 13, 1942.

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 plaintiff, Superintendent of Insurance, is the legal custodian of the money herein sued for and is trustee of same for the policyholders from whom it had been illegally collected. Sec. 5874, R. S. 1929; State ex rel. Lucas v Blair, 144 S.W.2d 106; State ex rel. Abeille Fire Ins. Co. v. Sevier, 335 Mo. 269, 73 S.W.2d 361; State ex rel. Carwood Realty Co. v. Dinwiddie, 343 Mo. 592, 122 S.W.2d 912. (2) As trustee of an express trust plaintiff has the right to maintain this action. Sec. 699, R S. 1929; Bogert, Trusts & Trustees, sec. 954; Restatement of the Law, Trusts, sec. 280. (3) The defendant bank was under no obligation to receive the funds tendered it by commissioners and custodians of the Circuit Court of Cole County. 8 Am. Juris., sec. 442. (4) The Circuit Court of Cole County had no jurisdiction to seize the fund belonging to policyholders and undertake to administer said fund. Aetna Ins. Co. et al. v. O'Malley, 342 Mo. 800, 118 S.W.2d 3. (5) The portions of the orders of the Circuit Court of Cole County directing the commissioners and custodians, who were in reality referees, to deposit restitution funds in defendant bank subject to check by said circuit court and said commissioners and custodians were acts attempting to assume jurisdiction of and to administer said funds, and hence such orders were void. (6) Void orders and judgments of a court are nullities and protect no one who acts upon them. 34 C. J. 509; Freeman on Judgments (4 Ed.), sec. 117; State ex rel. Abeille Fire Ins. Co. v. Sevier, 335 Mo. 269, 73 S.W.2d 361; Ralph et al. 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 funds in the defendant bank by Cook and Lauf to be administered by them under orders of the Circuit Court of Cole County, which did not have jurisdiction to administer the funds, did not amount to a deposit of the funds and did not create the relation of debtor-creditor between said commissioners and custodians or the circuit court and the defendant bank, but the defendant by accepting the 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 the defendant bank being advised by the custodians that the money was being put in the bank to be administered by the circuit court. Sec. 5874, R. S. 1929; William R. Compton Co. et al. v. Farmers' Trust Co., 279 S.W. 746; Special Road District No. 4 et al. 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 Savings 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) Defendant is liable to plaintiff regardless of how or from whom it received the money which belonged to plaintiff as trustee for the policyholders since said bank does not have title to said funds equal or superior to title of plaintiff. 41 C. J. 47; York v. Farmers' Bank, 105 Mo.App. 127, 79 S.W. 968; Johnson-Brinkman Co. v. Central Bank, 116 Mo. 558, 22 S.W. 813; Pile v. Bank, 187 Mo.App. 61, 173 S.W. 50; Strong v. Commonwealth Trust Co., 199 S.W.2d 1034; Bisesi v. Farm & Home Savings & Loan Assn., 231 Mo.App. 897, 78 S.W.2d 871; St. Charles Savings Bank v. Orthwein Investment Co., 160 Mo.App. 369, 140 S.W. 921; Paxton v. Gillam-Jackson L. & T. Co., 221 Mo.App. 1101, 297 S.W. 119; Duncan v. Anderson, 250 P. 1018. (9) The defendant is liable for the amount of $ 289,789.95 which it admits it did not return to plaintiff nor to policyholders, because: (a) Being charged with knowledge of the law, it knew when money was put in the bank on orders of the circuit court that the money did not belong to the circuit court or its custodians, and that said court could not administer it but could only turn it over to the Superintendent of Insurance, and therefore defendant became bound to the execution of that trust, to-wit, the return of the money to the Superintendent of Insurance. Mechanic's Bank v. Seton, 1 Pet. 229, 7 L.Ed. 152; Clearmont School District v. Jackson Bank, 37 S.W.2d 1006; Harrison Township v. People's State Bank, 329 Mo. 968, 46 S.W.2d 165. (b) Defendant when it honored checks of the circuit court and its commissioners and custodians in payment of rent, stenographers' salaries, lawyers' fees, furniture and fixtures, and other items of administration expense, had knowledge that the circuit court and its commissioners and custodians were breaching their trust, to-wit, were not returning the money to the Superintendent of Insurance, and therefore defendant became a participant in the breach of trust. Mann v. Bank of Greenfield, 323 Mo. 1000, 20 S.W.2d 502; In re Farmers' Exchange Bank v. Gallatin, 327 Mo. 640, 37 S.W.2d 936; Round Prairie Bank v. Downey, 64 S.W.2d 701; Dunnegan Grove Cemetery v. Farm & Home S. & L. Assn., 93 S.W.2d 95; Missouri Township v. Farmers Bank, 328 Mo. 868, 42 S.W.2d 353. (c) Knowledge or notice of the trust character of property applies to constructive trusts as well as to express trusts. Trevathan's Extr. v. Dees' Extrs., 298 S.W. 975; Cameron v. Peoples Bank, 147 A. 657; Custis v. Serrill, 154 A. 487; Fleckhamer v. Fleckhamer, 147 A. 886. (d) Even though it be conceded for the sake of argument only that the circuit court had a right to put the funds in the defendant bank, the placing of said funds in the bank by the court amounted to a bailment of said funds for the benefit of the Superintendent of Insurance, and the defendant thereby became a bailee or trustee of a special deposit. Van Wagoner v. Buckley, 133 N.Y.S. 599. (10) Defendant is liable for interest on money it received from the date of its receipt until it was repaid and on unreturned portion until it is returned, since illegal receipt of the money raised implied promise to return it immediately. 33 C. J., 203; Sec. 2839, R. S. 1929; Jefferson City Savs. Assn. v. Morrison, 48 Mo. 273; Napoleon Hill Cotton Co. v. Stix, Baer & Fuller Dry Goods Co., 217 S.W. 323, 203 Mo.App. 25; Great Northern Ry. Co. v. Erie Ry. Co., 58 F.2d 414. (11) It was a legal impossibility for the Circuit Court of Cole County to deposit or cause to be deposited the policyholders' money in the defendant bank in a general deposit. (a) Under the decisions of this court in the rate litigation, the Circuit Court of Cole County did not have jurisdiction to deposit the money. Aetna Ins. Co. v. O'Malley, 342 Mo. 800, 118 S.W.2d 3, 8. (b) A general deposit of money is a matter of contract and such a contract as to the policyholders' money could not be made because such a contract would be void as against public policy. State ex rel. Lucas v. Blair, 346 Mo. 1017, 144 S.W.2d 106, 109; Aetna Ins. Co. v. O'Malley, 343 Mo. 1232, 124 S.W.2d 1164, 1168; Sec. 5874, R. S. 1929 (now Sec. 5985, R. S. 1939); State ex rel. Scott v. Dircks, 211 Mo. 580; In re Rahn's Estate, 316 Mo. 492, 500, 291 S.W.2d 120; Industrial Loan Co. v. Grisham (Mo. App.), 115 S.W.2d 214, l. c. 217. (c) A general deposit of the money could not be made in the defendant bank because title to the fund could not be passed to the bank. Ralls County v. Commissioner of Finance, 334 Mo. 167, 66 S.W.2d 115; Farmers' Trust Co. v. Tootle-Lacy Natl. Bank, 332 Mo. 82, 56 S.W.2d 771; 7 Am. Juris., sec. 444, p. 313; Van Wagoner v. Buckley, 133 N.Y.S. 599. (d) The payments by the insurance companies in satisfaction of the judgment of restitution were not deposits in court. Morgan v. Willman, 318 Mo. 171; State ex rel. Robertson v. Sevier, 342 Mo. 346, 115 S.W.2d 810; State ex rel. Carwood Realty Co. v. Dinwiddie, 343 Mo. 592, 122 S.W.2d 912. (12) The defendant bank took the restitution fund charged with a trust and thereby became a trustee charged with the execution of said trust. Mann v. Bank of Greenfield, 323 Mo. 1000, 1013, 20 S.W.2d 502; Harrison Township v. Peoples State Bank, 329 Mo. 968, 46 S.W.2d 165, 166; Elliott v. Landis Machine Co., 236 Mo. 546; Schneider v. Schneider, 146 S.W.2d 585, 589. (13) The defendant bank, at the time it undertook to contract with Cook and Lauf and/or the Circuit Court of Cole County, had notice that it was the intention of the circuit court to administer the policyholders' funds and that the placing of the money with said bank was part of said plan of administration, and consequently the defendant bank acted wrongfully in accepting said funds under such conditions. Aetna Ins. Co. v. O'Malley, 342 Mo. 800, 118 S.W.2d 3, 10; State ex rel. Abeille Fire Ins. Co. et al. v. Sevier, 335 Mo. 269, 73 S.W.2d 361. (14) The defendant bank was charged with a correct interpretation of the statutes. State v. Weatherby, 344 Mo. 848, 129 S.W.2d 887, 892; In re Cameron Trust Company, supra, 51 S.W.2d l. c. 1026; Dunnegan Grove Cemetery v. Farm & Home S. & L. Assn., 93 S.W.2d 101; Aetna Ins. Co. v. O'Malley, 118 S.W.2d 3; Aetna Ins. Co. v. O'Malley, 124 S.W.2d 1164. (15) The law of bank preference cases is the law of this case. State ex rel. Gentry v. Page Bank, 14 S.W.2d 597; In re Cameron Trust Co., 300 Mo. 1070, 51...