May v. Bank of Hughesville

• Decision Date: 14 February 1927
• Docket Number: No. 15840.,15840.
• Citation: 291 S.W. 170
• Parties: MAY v. BANK OF HUGHESVILLE et al.
• Court: Missouri Court of Appeals

291 S.W. 170

MAY v. BANK OF HUGHESVILLE et al.

No. 15840.

Kansas City Court of Appeals. Missouri.

February 14, 1927.

Appeal from Circuit Court, Pettis County; Dimmitt Hoffman, Judge.

"Not to be officially published."

Action by Sam D. May against Bank of Hughesville and Henry Longan, Deputy Commissioner in charge of the liquidation of said bank. Judgment for defendants, and plaintiff appeals. Affirmed.

James T. Montgomery, of Sedalia, for appellant.

Jones & Jones, of Sedalia, for respondents.

ARNOLD, J.

This is an action seeking to establish as a preferred claim a certain deposit in the Bank of Hughesville, Pettis county, Mo. For a number of years defendant bank had been conducting a general banking business at Hughesville under the banking laws of the state of Missouri; and plaintiff, a stock man and farmer living near Hughesville, had been a customer and depositor of said bank ever since its organization, covering a number of years.

The record shows that on February 27, 1925, plaintiff was indebted to the said bank on its books in the sum of $191.08, which had been carried by the bank as an overdraft. Late in the afternoon on said last-named date plaintiff deposited to his credit in said bank a check on a New York bank in the sum of $5,000. Out of this amount he reimbursed the bank for the said overdraft, and the balance of the check, $4,808.92, was passed to his credit on the books of the bank. It appears also that on the day in question, and prior to making the deposit, plaintiff had been at the city of Sedalia, and there had drawn a check against the bank of Hughesville in the sum of $1,000, payable to the Third National Bank of Sedalia, and also drew a check on the Hughesville bank for $250, payable to the Citizens' National Bank of Sedalia; that, after drawing said checks, plaintiff drove from Sedalia to Hughesville, a distance of about 20 miles, and at about 5:30 p. m. made the deposit above mentioned. It also appears that the check so deposited was mailed by defendant on the same day to the Citizens' National Bank of Sedalia, and reached that bank in the morning of the following day, when it was credited to the account of the bank of Hughesville.

The evidence shows the bank, of Hughesville had been in an insolvent condition for some months prior to the date of the occurrence which forms the basis of this action, and that, on February 28, 1925, it passed into the hands of the state finance commissioner, and a notice was posted upon the door notifying the public to that effect. It further appears that the checks above mentioned, drawn against the bark of Hughesville in favor of the two Sedalia banks, were forwarded to the bank of Hughesville for payment, but, said bank being in the hands of the finance commissioner, these checks were dishonored. In due time plaintiff filed his claim against the receiver of the bank for $4,808.92, which was allowed as an ordinary claim. Thereupon this suit was instituted in the circuit court of Pettis county to have same declared a preferred claim.

The petition sets forth the fact of the deposit of the $5,000 check; the payment of plaintiff's indebtedness of $191.08 to the bank out of the proceeds thereof; that at the time said deposit was made, said defendant bank was insolvent, and its insolvency known to the officers of said bank, and that it was then closed and in charge of the finance department of the state of Missouri; that plaintiff did not know, and had no means of knowing, that the bank was insolvent and in charge of the state finance department at the time the said deposit was made; that by reason of the premises the bank of Hughesville obtained no title to said deposit, and the relationship of debtor and creditor was not thereby created; that said bank was hopelessly insolvent at the time the deposit was made, and was known to be so by its officers; and that it was a fraud !non plaintiff for said bank to accept his said deposit under the circumstances; and that plaintiff should have his said claim preferred against the assets of the bank, and such relief is accordingly sought.

The cause was tried to the court, resulting in a judgment and finding for defendants. A motion for a new trial was overruled, and plaintiff appeals.

The evidence shows that on February 27, 1925, the officers and directors of the bank of Hughesville were in Sedalia, endeavoring to make some arrangement with the Citizens' National Bank of Sedalia to take over the assets of the bank of Hughesville and pay its indebtedness. It appears that among said assets was one note upon which more security was demanded before the proposition would be accepted. The officers of the bank of Hughesville were unable to meet this requirement, and the deal failed of consummation. The following day the deputy state bank commissioner went to Hughesville and closed the bank. The deputy commissioner testified there was no determination to close the bank until be reached Hughesville on Saturday, February 28, 1925, and that it was closed on that date.

There is but one error charged, to wit, that the trial court erred in refusing to declare plaintiff's claim preferred. It is plaintiff's contention that, when a bank receives a deposit after hopeless insolvency, the fraud voids the implied contract establishing the relation of debtor and creditor, and prevents money so deposited from becoming property of the bank, and that a trust is the equitable result. Plaintiff cites cases in foreign jurisdictions which would seem to sustain his position in this respect. But, whatever the rule may be in other states, we are required to follow the rule in Missouri, which is to the effect that, to entitle a depositor to a preference, there must be present an element in the transaction whereby the deposit in question may be declared a trust.

There are numerous decisions in this state, and all to the same effect, to wit, that no trust upon which a preference may...