Merchants' Ice & Fuel Co. v. Holland Banking Co.
Decision Date | 20 July 1928 |
Citation | 8 S.W.2d 1030,223 Mo.App. 93 |
Parties | MERCHANTS' ICE & FUEL COMPANY, APPELLANT, v. HOLLAND BAKING COMPANY, RESPONDENT. [*] |
Court | Missouri Court of Appeals |
Appeal from the Circuit Court of Greene County.--Hon. Guy D. Kirby Judge.
REVERSED AND REMANDED (with directions).
Judgment reversed and remanded.
Arch A Johnson and F. M. McDavid for appellant.
Roscoe C. Patterson and Orin Patterson for respondent.
This is a claim for preference filed by appellant corporation with the commissioner of finance in charge of the Holland Banking Company, which bank failed and was closed January 15, 1924. The claim was referred to the circuit court of Greene county for its determination, as provided by sections 11718 to 11722, inclusive, Revised Statutes 1919, and is in the nature of an equitable action or interplea. No question arises on the pleading. At the close of the evidence the trial court, upon request of appellant, made a finding of facts which is as follows:
Thereafter the court gave judgment against the claimant dismissing its claim and this appeal followed. This court heretofore rendered an opinion, reversing and remanding the cause, but in due time sustained defendant's motion for rehearing for reasons hereinafter discussed.
We believe the evidence fairly justified the finding of facts made by the learned trial judge as above set forth. In addition to that finding, however, some other circumstances were shown which we deem of some importance. The claimant, Merchants Ice & Fuel Company, received a certificate from the commissioner of finance in charge of the Holland Bank after it closed, showing the amount of its deposit with that bank. Thereafter claimant collected forty per cent on this certificate from the McDaniel National Bank and endorsed the certificate to the McDaniel National Bank as security for the advance payment. At the time of the trial that certificate was being held by the McDaniel Bank. It also appears that there was no one among the bank's patrons similarly situated to claimant; that is, there was no other depositor whose note had been placed as collateral with the New York Bank who also had a deposit in the Holland Bank at the time it closed and had thereafter paid his note to the New York Bank, as did claimant. The record shows that two depositors of the Holland Bank had offset their deposits against their notes previously held as collateral by the New York Bank but returned to the commissioner in charge of the Holland Bank, after the indebtedness to the New York Bank had been paid.
This case primarily involves the right of a depositor to set off the amount of his deposit in an insolvent bank against his note given to that bank. Had the note of claimant been held by the Holland Bank at the time the commissioner took charge, the right of set-off would of course have been complete. [Aab v. French, 279 S.W. 435, 437, and cases cited.]
The facts under consideration, however, complicate the question to an unusual degree. These facts may be briefly summarized as follows: The $ 400,000 borrowed from the New York Bank by the officers of the Holland Bank was used by the latter bank and not by the individual officers who signed the note; when the Holland Bank failed claimant had on deposit therein about $ 3700, and its $ 5000 note to the Holland Bank was in the hands of the New York Bank, placed there, with other notes, ostensibly as collateral to the $ 400,000 note executed by the officers of the Holland Bank; these collateral notes in the aggregate equalled the amount of the officers' note to the New York Bank; under the mistaken belief, induced by a statement made to the claimant herein by the bank commissioner in charge of the Holland Bank that the New York Bank owned claimant's $ 5000 note, the claimant paid the New York Bank the amount due thereon when its said note became due; the Holland Bank, at the time it closed, had on deposit with the New York Bank $ 108,000, which amount was applied by the New York Bank on the $ 400,000 note of the officers; as a result of that application of funds the New York Bank returned $ 108,000 in notes to the Holland Bank; several depositors of the Holland Bank were allowed to offset their deposits against their notes included in those so returned by the New York Bank; the commissioner thereafter collected about $ 35,000 of the notes returned; claimant has received forty per cent of its deposit from the McDaniel Bank, turning over as security its certificate showing the amount it had on deposit with the Holland Bank. There is no evidence that the board of directors of the Holland Bank authorized the officers of that bank to deliver claimant's note to the New York Bank as security for the $ 400,000 note of said officers. Under such circumstances is claimant lawfully entitled to a preference?
The particular question here involved has never been before the appellate courts of this State. There are certain well-established rules of law, however, which are applicable. When the commissioner of finance took over the assets of the Holland Bank he occupied the same position as that bank relative thereto, i. e., subject to all sets-offs and equities based on liabilities of the bank existing at the time he took charge. Any such rights of set-off would not be affected by reason of the fact that the indebtedness to the bank of the party claiming the set-off, as was true in this case, had not matured at the time the bank was taken over. [Smith v. Spengler, 83 Mo. 408; Huse v. Ames, 104 Mo. 91, 15 S.W. 965; Storts v. Mills, 93 Mo.App. 201; Storts v. George, 150 Mo. 1, 51 S.W. 489.]
Plaintiff advances the theory that since the funds in the hands of the finance commissioner have been augmented to the amount of $ 108,000 by the excess of collateral returned by the New York Bank to which plaintiff has contributed to the amount of the note paid without protest but under a mistake as to the facts, that on general principles of equity, it is entitled to be repaid from the fund in the hands of the commissioner to the extent of its deposit. Plaintiff admits there is no authority in this State upholding such proposition. Two cases from sister States are cited however, which unquestionably support plaintiff's position. In Seymour v. Becker, 73 N.W. 1096 (Minn.), a similar state of facts arose, which are clearly stated in the syllabus of the case as follows:
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