Mann v. Farmers' Exchange Bank of Gallatin

• Decision Date: 23 May 1932
• Parties: BESSIE MANN, APPELLANT, v. FARMERS EXCHANGE BANK OF GALLATIN; S. L. CANTLEY, COMMISSIONER, ET AL., RESPONDENTS
• Court: Kansas Court of Appeals

50 S.W.2d 146

227 Mo.App. 1

BESSIE MANN, APPELLANT, v. FARMERS EXCHANGE BANK OF GALLATIN; S. L. CANTLEY, COMMISSIONER, ET AL., RESPONDENTS

Court of Appeals of Missouri, Kansas City

May 23, 1932

Appeal from the Circuit Court of Daviess County.--Hon. Ira D. Beals Judge.

REVERSED AND REMANDED (with directions).

Reversed and remanded.

Dean H Leopard for appellant.

Ed. C Hyde and Earle W. Frost for respondents.

OPINION

ARNOLD, J.

Plaintiff appeals from a judgment of the circuit court denying her claim as preferred, in an action against defendants, but allowing it as a common claim.

The suit was instituted in the circuit court of Daviess county, Missouri, on February 7, 1927, by petition which alleges the Farmers Exchange Bank of Gallatin, Missouri, was a corporation organized and existing under the laws of Missouri, and engaged in banking business; that on March 4, 1926, said bank, by its board of directors, was placed in the hands of C. E. French, Commissioner of Finance of Missouri, together with its property, business and affairs, for liquidation, and said finance commissioner took charge thereof; that afterwards said C. E. French resigned his said office of Commissioner of Finance and defendant S. L. Cantley was appointed his successor and, at the time of the filing of this suit, was acting as such commissioner and had charge of defendant bank, through Joseph M. Martin, special deputy.

The petition alleges that prior to March 4, 1926, the time defendant bank was taken in charge by the commissioner of finance and placed in the hands of special deputy, Joseph N. Martin, the plaintiff, Bessie Mann, deposited and left in said bank two United States Government bonds, for the sum of $ 1,000, of the second Liberty Loan issue, bearing interest at four and one-half per cent per annum, payable semiannually, which deposit and leaving of said bonds was at the special request of said bank, with its officers and agents in charge thereof; that said bank, by such officers and agents, promised and agreed to keep the same safely for plaintiff and to deliver them to her on her request; that, relying on said promise, plaintiff left them with said bank. That said bank and all its property, effects and affairs, on March 4, 1926, were taken in charge by the commissioner of finance and placed in the hands of such special deputy; that plaintiff has demanded of said bank and the officers in charge thereof, the return of her said bonds; that such officers have failed and refused to return said bonds or to account therefor; that plaintiff has good reason to believe and hence states that said bonds have been converted to the use and benefit of said bank, and by reason of gross carelessness and mismanagement of said bank, said bonds have been lost or stolen by said bank, or its officers in charge thereof; that said bank by its officers has wrongfully converted said bonds into money at the par value thereof, and has placed the proceeds of the sale of such bonds in the assets of said bank, so that, at the time the bank was placed in the hands of the commissioner of finance, as aforesaid, and had, in its assets so turned over to the commissioner, the proceeds of the sale of said bonds, and that the special deputy in charge now holds and has in his charge all of such money and proceeds received from such sale, together with other assets of said bank.

The petition further states:

"Claimant further states that she has filed her claim on account of said bonds with the special deputy commissioner of finance in charge of said bank, within the time required by law.

"Plaintiff further states that the claim upon which this action is instituted was duly filed, and that sixty days have elapsed since the expiration of time for filing said claim and that said claim has not been approved."

The prayer asks that plaintiff be allowed her claim for payment of said bonds with accrued, unpaid interest, as a preferential claim.

The petition was filed on February 7, 1927. Thereafter, and on July 11, 1928, the court took up for consideration the report of the Commissioner of Finance in the matter of the liquidation of the Farmers Exchange Bank of Gallatin, and considered "all claims made for preference and for preferential payment," as shown by said report, "and all claims made by all parties who have filed claims for preference, and of all parties who have filed suits for preference, and for preferential payment, and all claims of all parties who have filed common claims, and all of said claims, suits and actions are now considered by the court, and are allowed, approved, disapproved or allowed conditionally, in detail, as set forth," in a general decree, and final judgment was rendered thereon. The final decree recites that evidence was heard on such claims, separately and severally; the decree approved the report of the special deputy from pages one to fourteen, inclusive, and as to the claim of Mrs. Bessie Mann, plaintiff herein, the decree recites:

"And now comes Mrs. Bessie Mann, after said rejection, and after due notice of said rejection having been given to her, and files suit for a bond left with said bank for safekeeping, in the amount of one thousand ($ 1,000) dollars, asking that the same be allowed as a claim against said bank and entitled to preference.

"This cause is submitted to the court, evidence heard, and the court, after being fully advised in the matter, finds from the evidence that Mrs. Bessie Mann left with the Farmers Exchange Bank of Gallatin, Missouri, a bond in the sum of one thousand ($ 1,000) dollars, and that the court finds from the evidence that said claimant is not entitled to preference or to a preferential allowance, and finds that the evidence fails to show that said bond or the proceeds thereof ever went into the assets of said bank or into the hands of the Commissioner of Finance in charge of said bank but that same should be allowed as a common claim.

"It is therefore ordered, adjudged and decreed by the court, that the claim of Mrs. Bessie Mann for preference and for preferential allowance be and the same is hereby denied, but that said claim be and the same is hereby allowed as a common claim, to be paid out of the assets of said bank, after all preferential claims and allowances have been paid."

Motions for a new trial and in arrest of judgment were overruled and plaintiff has appealed.

The record discloses the following occurred at the beginning of the trial:

"Mr. Cruzen reads claimant's petition to the court.

"MR. ALEXANDER: We would like for the record to show that the deputy commissioner of finance, Mr. Martin, files a demurrer to the petition in this case, and it is in substance that the petition does not state facts upon which the plaintiff is entitled to the relief called for, and then let it be overruled, and then we have leave to file and do file an answer which will be a general denial.

THE COURT: You will file that separate pleading?

"MR. ALEXANDER: Yes; first, let the record show we file a demurrer to the petition, which the court takes up and considers and overrules, and of course, I understand exceptions are saved, and followed by an entry that the deputy commissioner of finance files an answer in the case, which is in the nature of a general denial.

"THE COURT: Make the entry--demurrer filed, and overruled, and defendant files answer."

It was admitted and agreed by counsel in open court, in part, as follows:

". . . that the claim of Bessie Mann against said bank for preference in the sum of one thousand ($ 1,000) dollars, was duly filed within the time required by law, that sixty days has elapsed since the expiration of the time for filing claims against said bank and that said claim has not been approved and that the claim for preference was duly filed within the time required by law, and that sixty days has elapsed since the expiration of the time for filing claim for preference and that said claim for preference has not been approved."

Defendants' answer was a general denial. The first question for our consideration is defendant's demurrer to the petition. This question was not raised in defendants' original brief, but is presented and discussed in respondent's supplemental brief and argument, filed subsequent to the oral argument before this court. It is urged, in this connection, that the petition is insufficient and does not state a cause of action, in that it does not state and allege all of the necessary legal requirements in a suit against an insolvent bank and the commissioner of finance engaged in its liquidation. This position has special reference to section 5337, Revised Statutes 1929, which, in part, is as follows:

"When the time within which the commissioner is required to approve or reject claims has expired and at any time within six months thereafter, a claimant whose claim has been duly filed and has not been approved by the commissioner may institute and maintain an action thereon against such corporation or banker. No action shall be maintained against such corporation or banker while the commissioner is in possession of its affairs and business unless brought within the period of limitation specified in this section. In all actions or proceedings instituted against such corporation or banker while the commissioner is in possession of its property and business, the plaintiff shall be required to allege and prove that the claim upon which the action is instituted was duly filed and that sixty days have elapsed since the expiration of time for filing said claims and that said claim has not been approved." [R. S. 1919, sec. 11720.]

It is pointed out the petition herein contains only the general allegation that "the claim upon which this action...