Mann v. Bank of Greenfield

• Decision Date: 04 October 1929
• Docket Number: 27737
• Citation: 20 S.W.2d 502,323 Mo. 1000
• Parties: Frank C. Mann, Trustee of Estate of John A. Ready, Appellant, v. Bank of Greenfield, and S. L. Cantley, Commissioner of Finance
• Court: Missouri Supreme Court

20 S.W.2d 502

323 Mo. 1000

Frank C. Mann, Trustee of Estate of John A. Ready, Appellant, v. Bank of Greenfield, and S. L. Cantley, Commissioner of Finance

No. 27737

Supreme Court of Missouri

October 4, 1929

Appeal from Lawrence Circuit Court; Hon. Charles L. Henson Judge.

Reversed and remanded (with directions).

George W. Goad and Mann & Mann for appellant.

(1) One dealing with the trustee of an express trust, knowing him to be such, is charged with knowledge of the terms of the trust and is bound, at his peril, to know the extent and limitation of the trustee's powers. Pundmann v. Schoenich, 144 Mo. 149; Evangelical Synod v. Schoeneich, 143 Mo. 652; In re Linn County Bank, 1 S.W.2d 206; Price v. Morrison, 236 S.W. 297; Schulz v Bank, 246 S.W. 614. (2) The cash and notes transferred by Van Osdell from the Ready estate to the Dade County Bank were trust funds and remained so in the hands of the Dade County Bank, the Commissioner of Finance when he took possession of the assets of the Dade County Bank, and the defendant Bank of Greenfield, to whom these assets were transferred; and when the commissioner took over the defendant bank he got no better title than that possessed by the latter bank and its assets in his hands remained impressed with such trust. Bartlett v. McCallister, 289 S.W. 820; Sloler v. Coats, 88 Mo. 514; Harrison v. Smith, 83 Mo 210; Orr v. Trust Co., 291 Mo. 383; Tierman v. Bldg. & Loan Assn., 152 Mo. 135; Nichols v. Bank, 278 S.W 797. (3) The court erred in giving Instruction 5, to the effect that notice of Van Osdell, the cashier of the Dade County Bank, who was the chief officer and transacting the business of the bank, was not notice to said bank. Bank v. Bank, 244 Mo. 583; Bank v. Lovett, 114 Mo. 525; Bartlett v. McCallister, 289 S.W. 814; In re Linn County Bank, 1 S.W.2d 206. (4) The knowledge of the officer is the knowledge of the corporation, although he is dealing with such corporation, in his own interest, if such officer is, at the same time, the managing officer of the corporation, and acts as the sole representative of the corporation in the particular transaction. Bartlett v. McCallister, 289 S.W. 814; Leonard v. Latimer, 67 Mo.App. 138; Latimer v. Loan Co., 78 Mo.App. 463; Bank v. Welliver, 215 Mo.App. 247; Citizens Trust Co. v. Coppage, 227 S.W. 1057; Tatum v. Bank, 69 So. 508; Bank v. Lyons, 220 Mo. 538; Bank v. Bank, 244 Mo. 554; In re Linn County Bank, 1 S.W.2d 206. (5) Where a corporation receives the benefits of an unauthorized transaction, it may not repudiate the same without offering to return the said benefits. Johnson v. Bank, 287 S.W. 835; Bank v. Douglas, 178 Mo.App. 664; State ex rel. v. Park-Davis Co., 191 Mo.App. 219; Parrour v. Investment Co., 64 Mo.App. 32; Wiler v. Bank, 187 Mo.App. 230; Millinery Co. v. Trust Co., 251 Mo. 553; Bank v. Lyons, 220 Mo. 538; Bartlett v. McCallister, 289 S.W. 814; Bank v. Bank, 244 Mo. 554. (6) Statute of Limitations is no defense where the transferee of a trust fund took with notice of the terms of the trust. Davis v. Keiser, 297 Mo. 1, 246 S.W. 897; Stoff v. Schuetze, 293 Mo. 635, 240 S.W. 139; Case v. Goodman, 250 Mo. 113; Elliott v. Machine Co., 236 Mo. 546; Case v. Seper, 280 Mo. 110.

Thos. W. Martin and Allen McReynolds for respondents.

(1) Plaintiff is estopped. The four months' time had elapsed for filing claims. The contract was entered into between the Dade County Bank and its directors and the Bank of Greenfield, and plaintiff up to that time had filed no claim against the assets of the Dade County Bank and made no assertion of any rights outside of that appearing in his letter of February 13. Plaintiff, by his conduct, is estopped from asserting any claim against the Bank of Greenfield. Leonard v. Shale, 266 Mo. 123; Bank v. Wade, 73 Mo.App. 558; Hughes v. McAlister, 15 Mo. 296; Meeker v. Stratt, 38 Mo.App. 239; Oliver v. Beard, 72 Mo.App. 181; Parke v. Franciscus, 228 P. 441; Lumber Co. v. Craig, 248 Mo. 319. (2) The action is in conversion and the Statute of Limitations in such an action is five years. Sec. 1317, R. S. 1919. If the right of action in a case of tort is once barred no subsequent acknowledgment or promise will take it out of the express language of the Statute of Limitations, nor will an admission or promise to pay during the period of limitation avail against the statute. 37 C. J. 1097; Schades v. Gehner, 133 Mo. 252. (3) Trover will not lie for money. In the first count plaintiff seeks to recover for the conversion of cash amounting to $ 1757.74. In the second count for cash amounting to $ 1543.74. In the third count for two items of cash amounting respectively to $ 2500 and $ 500, and in the fourth count for a check of $ 500, or the cash proceeds thereof (just which is not clearly pleaded), amounting to $ 500. In the present action recovery cannot be had for any of these sums for the reason that money, unless it can be identified as a specific chattel, is not a subject of conversion. 38 Cyc. 2014, 2015, note 53; Anderson Electric Car Co. v. Savings Trust Co., 212 S.W. 60, 201 Mo.App. 400; Cobush Furniture & Carpet Co. v. Lowenberg, 185 S.W. 747, 194 Mo.App. 551. (4) The mere fact that the Dade County Bank honored Van Osdell's check as trustee in and of itself imposes no liability upon it or upon the Bank of Greenfield as assumer, because under the statutes, Sections 13426 and 13428, a bank is protected against payment to a trustee. It would seem in legal contemplation that the bank paid $ 500 on the check; that Van Osdell thereupon paid the $ 500 back to the bank, thereby obtaining credit upon his note. In that view there would be no liability, because that would amount to the conversion of money, for which, as shown above, no action in trover will lie.

Davis, C. Henwood and Cooley, CC., concur.

OPINION

DAVIS

This is an action on a contract. The petition comprises four counts, and each hypothesizes the theory that the Dade County Bank knowingly and wrongfully appropriated and used the assets of a trust estate without consideration therefor, and that thereafter the Dade County Bank, in liquidation, entered into a contract with defendant bank, wherein defendant, in consideration of the transfer to it of certain assets, assumed and agreed to pay, except capital stock and surplus, the liabilities of said Dade County Bank. A jury was waived. At the close of all the evidence the trial court gave declarations of law as to each count, to the effect that, under the pleadings, plaintiff was not entitled to recover. It also gave a declaration of law that notice or knowledge of Van Osdell (cashier of said Dade County Bank and testamentary trustee of said trust estate) did not constitute notice or knowledge to said bank. The trial court then rendered judgment for defendant, and plaintiff appealed.

The facts developed for plaintiff warrant the finding that John A. Ready died in 1911 or 1912, leaving a will appointing Edwin Harrison and Floyd Q. Van Osdell executors thereof. They were also appointed trustees of Ready's estate. The estate was finally administered, and the trustees took charge of the assets as such on May 21, 1913. Harrison and Van Osdell were at that time, respectively, the cashier and assistant cashier of the Dade County Bank. Harrison resigned as cashier in 1917, and, in 1918, severed his connection with the bank and moved to Oklahoma. In 1918 Van Osdell was elected cashier of said bank. While Harrison remained a trustee of Ready's estate even after removal, Van Osdell in fact was the trustee active in its management. In addition, Van Osdell from 1918 until his resignation in December, 1922, was the only active and operating officer of the Dade County Bank. However, one Grether was in the bank as assistant cashier. The assets received by the trustees of the Ready estate amounted to not less than $ 22,000, and were comprised of notes secured by first mortgages.

It appears that the Dade County Bank in 1918 was financially troubled. A client of said bank was the Greenfield Electric Company. Its officers and directors were officers and directors of the bank. It was indebted to the bank in the sum of $ 12,000 or more. Its earnings aggregated $ 500 or $ 600 a month, but its operating expenses were in excess of its earnings. It was unable to reduce its indebtedness to the bank. The bank examiner objected to this line of credit, and insisted that the directors indorse its notes. It also had an overdraft in the bank for $ 500, for which it gave the bank its note. Van Osdell on June 12, 1918, and May 1, 1919, respectively, to decrease the light company's indebtedness and to take care of the overdraft, drew checks on and payable to the Dade County Bank for $ 2500 and $ 500 on the account of the Ready estate, and in lieu thereof substituted and placed as assets of the Ready estate two unsecured notes of the light company for $ 2500 and $ 500, respectively. The buildings of the light company burned without insurance. Later a sale of its remaining property was arranged, and, in order to effect a sale, these two notes placed in the Ready estate were delivered to the purchaser without consideration to the Ready estate. The money received from the sale was applied to the indebtedness of the light company to the Dade County Bank.

On February 13, 1919, the Dade County Bank held the note of Johnson, a brother-in-law of Van Osdell, for $ 1500, secured by a chattel mortgage on live stock, which was neither ackowledged, recorded nor filed for record. The note, about six months old, and other obligations of Johnson, were objected to by the bank examiner and the bank directors. On said day, Van Osdell, due to the pressure and the fact that Johnson had sold the live stock, transferred this Johnson note to the Ready estate, and...