Macon County v. Farmers' Trust Co. of Macon

• Decision Date: 03 July 1930
• Docket Number: 29974
• Parties: Macon County, Appellant, v. Farmers Trust Company of Macon; S. L. Cantley, as Commissioner of Finance of the State of Missouri; and Alonzo English, as Deputy Commissioner of Finance in Charge of Assets of said Farmers Trust Company
• Court: Missouri Supreme Court

29 S.W.2d 1096

325 Mo. 784

Macon County, Appellant, v. Farmers Trust Company of Macon; S. L. Cantley, as Commissioner of Finance of the State of Missouri; and Alonzo English, as Deputy Commissioner of Finance in Charge of Assets of said Farmers Trust Company

No. 29974

Supreme Court of Missouri

July 3, 1930

Appeal from Macon Circuit Court; Hon. Vernon L. Drain Judge.

Reversed and remanded (with directions).

William M. Van Cleve, Otho F. Matthews and Ed S. Jones for appellant.

(1) The funds sued for constituted a trust fund in the possession of the defendant trust company and the holder of the funds became a trustee by its own wrong. Bartlett v McCallister, 316 Mo. 129; Compton v. Farmers Trust Co., 279 S.W. 746; Huntsville Trust Co. v Noel, 12 S.W.2d 751; State ex rel. v. Page Bank, 14 S.W.2d 597. (2) Where the property and assets of the bank including the property constituting the trust fund have gone into the hands of the commissioner and have augmented the assets in his hands and have not been disbursed by him, and the property in the hands of the commissioner exceeds the plaintiff's claim, the assets of the bank become available, in equity, for the liquidation of the trust. Cases supra, Bank v. Brightwell, 148 Mo. 358; Nichols v. Bank, 278 S.W. 793; Evans v. Bank, 6 S.W.2d 655; Johnson v. Farmers Bank, 11 S.W.2d 1090. (3) The law limits the right to bring an action within six months after the time has expired for approving or rejecting claims, but only upon claims which have been disallowed by the commissioner. This section requires the necessary averment in the petition that the claim sued on has been rejected by the commissioner. Nowhere in the Banking Act is a provision made for actions on allowed claims, nor a limitation on the time when they may be brought. Where a trust exists, the funds are traced, and have not been disbursed, equity will enforce performance. Sec. 11720, R. S. 1919. Priorities can be adjudged on claims allowed by the commissioner or established by judgment only by the circuit court. The determination of a priority is within the peculiar province of a court of equity. No legal remedy is provided and equitable principles are applied alike in the allowance and enforcement. (4) A mandatory duty is devolved upon the commissioner in charge of a closed bank to present all allowed claims to the circuit court for determination of their priority. The commissioner is forbidden by statute to determine priorities. Huntsville Trust Co. v. Noel, supra; Sec. 11719, R. S. 1919; Evans v. Bank, 6 S.W.2d 655; Johnson v. Farmers Bank, 11 S.W.2d 1090. (5) Priorities and manner of payment may be fixed by the court at the time of paying dividends or upon final distribution and such dividends may be paid at any time after the date for the presentation of claims or at the time the final order of distribution is made. Sec. 11722, R. S. 1919. Sections 11719, 11720 and 11722 are intended to enable the commissioner to ascertain the total indebtedness against the property in his hands, and to limit the time within which such indebtedness shall be proved, but not to limit the time or manner in which it shall be paid. (6) If Section 11720 is a limitation as to the fixing of priorities on allowed claims and the commissioner has failed to follow his mandatory duty under the statute to certify such claims to the circuit court for determination as to priority and the court, by reason of such failure, has not such claim before it within the time specified in the claimed limitation, then the commissioner cannot avail himself of the defense of limitations and the general powers of a court of equity will intervene and afford the proper relief. (7) The defendant trust company, by taking the funds of the county, without qualifying as a depositary, became a trustee ex maleficio and the Statute of Limitations does not run. Huntsville Trust Co. v. Noel, 12 S.W.2d 751; Elliott v. Machine Co., 236 Mo. 567; Mann v. Bank of Greenfield, 20 S.W.2d 502; Copple v. Rowland, 4 S.W.2d 816. (8) Appellant was not precluded to try this action by reason of a former suit and judgment thereon. Estoppel by judgment arises only where the issues presented have been adjudicated therein. Custer v. Kroeger, 280 S.W. 1035; Donnell v. Wright, 147 Mo. 639; St. Louis v. United Railways, 263 Mo. 424.

C. G. Buster and Waldo Edwards for respondents.

(1) The law limits the right of a claimant to bring its action within six months after the time has expired for approving or rejecting claims, and also its preference, if any, it seeks. Secs. 11716, 11718, 11719, 11720 and 11722, R. S. 1919; Tate v. Citizens Savings Bank, 21 S.W.2d 655; Bowersock Mills & Power Co. v. Citizens Trust Co., 298 S.W. 1049; Woods v. Cainville Bank, 11 S.W.2d 56; Cold Springs Lodge v. Cantley, 18 S.W.2d 111. (2) It has been held innumerable times that the time for enforcing a remedy may be shortened by the Legislature where it does not deprive such party of its remedy and leaves it a reasonable time in which to enforce it. Siebert v. Copp, 62 Mo. 182; Adamson v. Davis, 47 Mo. 268; Stevens v. National Bank, 43 Mo. 385. (3) A judgment rendered in a former suit between the same parties, on the same cause of action, in a court of competent jurisdiction, operates as an estoppel and bar, not only to every issue that was offered, but as to every other matter which might have been litigated or determined in the action. Boob v. Kier, 246 S.W. 926; Richardson v. Dell, 191 S.W. 63; Leslie v. Carter, 268 Mo. 420; St. Louis v. United Rys. Co., 263 Mo. 387; Summet v. Realty & Brokerage Co., 208 Mo. 511; State ex rel. v. Patton, 271 Mo. 554; Spratt v. Early, 199 Mo. 501; Case v. Sipes, 280 Mo. 120; Barber Paving Co. v. Field, 132 Mo.App. 628.

OPINION

Blair, P. J.

Action in the Macon County Circuit Court to secure priority of payment for the balance due Macon County upon its unpaid deposit in Farmers Trust Company of Macon. The trial court denied the relief sought, and the county was granted an appeal to this court.

The uncontradicted facts will be briefly stated. In May, 1925, the County Court of Macon County advertised for bids from banking institutions which desired to become depositaries of the county funds for the ensuing two-year period. Farmers Trust Company of Macon, to which we will generally refer as "trust company," was then awarded two-tenths of such funds on its proposal to pay interest thereon monthly at two per cent. Under agreement with the county court, the trust company gave its bond in the sum of $ 60,000, with personal sureties, and also deposited as further security certain collateral, which it is unnecessary to describe.

In May, 1927, the county court made another order accepting bids of several banks and awarding county funds to them as depositaries for a further period of two years. The trust company then bid two per cent interest for two-tenths of such funds, as before; but was then awarded only one-tenth of the funds of the county, upon certain conditions as to bond and deposited collateral, with which the trust company failed to comply. Thereupon the county court ordered the return of the money deposited under the 1925 arrangement. Only a part thereof was paid out on checks of the county treasurer, in whose name the county deposit was carried.

On August 10, 1927, the trust company was placed in the hands of the Commissioner of Finance, and on August 27, 1927, respondent English was put in charge of its liquidation. The amount then due Macon County was found to be $ 27,095.74. A claim in that amount was filed by the county with the commissioner in charge of the trust company, and that claim was subsequently approved as a general or common claim for the sum due at the time and was listed with other claims in the office of the Recorder of Deeds.

On November 7, 1927, and in response to the petition of the county therein filed, the Circuit Court of Macon County authorized and ordered the County Court of Macon County "to sell and dispose of for cash, at public or private sale" the collateral deposited by the trust company in May, 1925, and still held by the county, and to apply the proceeds thereof to the indebtedness due the county, and to apply the proceeds thereof to the indebtedness due the county from the trust company.

At the same term of the circuit court, the county filed suit against the sureties on the $ 60,000-bond given by the trust company in May, 1925. The trust company was not made a party to the suit. It was alleged in the petition to be insolvent. The record does not disclose the disposition of this suit, but it appears that $ 3750 was all that the county was able to, or at least did, realize from the personal sureties. This amount, with the proceeds of the sale of the collateral, reduced the claim of the county to $ 6,412.76, which was the amount of the claim the county sought to have allowed in this proceeding as a preferred claim against the funds of the trust company in the hands of the liquidating agent.

From the judgment of the trial court, it is impossible to tell upon what theory that court decided the case. The judgment is simply a finding of the issues for defendant. The county contends (and respondents apparently do not contend otherwise) that the money of the county improperly retained by the trust company, without compliance with the terms of the renewed deposit, after demand by the county for its return, constituted a trust fund in the hands of the trust company. [Huntsville Trust Company v. Noel, 321 Mo. 749, 12 S.W.2d 751.] Such trust fund went to swell the assets of the trust company and the liquidating agent had on hands and undistributed to depositors or other creditors funds more than sufficient to pay the claim of the county and other claims,...