Messenger v. Carroll Trust & Savings Bank
| Decision Date | 04 April 1922 |
| Docket Number | 34358 |
| Citation | 187 N.W. 545,193 Iowa 608 |
| Parties | GEORGE MESSENGER, Superintendent of Banking, Plaintiff, v. CARROLL TRUST & SAVINGS BANK et al., Defendants. MOLINE PLOW COMPANY, Appellee, v. J. A. DOUGHERTY, Receiver, Appellant |
| Court | Iowa Supreme Court |
Appeal from Carroll District Court.--E. G. ALBERT, Judge.
THE Carroll Trust & Savings Bank at Carroll went into the hands of a receiver as an insolvent on April 25, 1919. Thereafter the Moline Plow Company presented a preferred claim, and asked that it be established as such. The receiver admitted the liability as for a debt, but denied the claimant's right of preference. The cause was tried upon a stipulation of facts, and an order entered, establishing the preferred claim. The receiver appeals.
Affirmed.
McCrary & Urbany and Salinger, Reynolds, Myers & Cooney, for appellant.
Lee & Robb, for appellee.
I.
The Moline Plow Company is a manufacturing concern, resident in Illinois. Prior to April 3, 1919, it was not a depositor or creditor of the defunct bank. On April 3d, it drew its sight draft upon the Swaney Automobile Company, of Carroll, Iowa and sent the same, with a bill of lading attached, to the Carroll Trust & Savings Bank, with directions to collect and remit. The amount was for $ 1,411.98. The letter transmitting the sight draft contained the following:
"Please surrender bill of lading only upon payment of the draft and of exchange and collection charges and remit the full amount of the draft to us."
The draft was duly presented and collected. The proceeds of the collection were remitted on April 23d by Chicago exchange upon the Continental & Commercial National Bank. Before the draft upon the Chicago bank had been paid, the Carroll Trust & Savings Bank was closed. It was not open after the close of business on April 24th.
It is the contention for the Moline Plow Company that the relation created between it and the bank was strictly that of principal and agent; whereas the receiver contends that the transaction had created the relation of creditor and debtor only. The bank complied strictly with the directions of the claimant. It did not purport to open any account with the claimant, nor to deposit the proceeds to the credit of the claimant. It simply put such proceeds in the form of its own draft upon the Chicago bank, for the purpose of remittance. The case at this point is ruled squarely by Brown v. Sheldon State Bank, 139 Iowa 83, 117 N.W. 289, and by our previous cases cited therein. The question is fully discussed in the Brown case, and nothing can be gained by a repetition of the discussion here. Following such case, it must be held that the proceeds of the sight draft came into the hands of the bank as agent for the Moline Plow Company, and that the title thereto was at all times in the principal, and not in the agent.
II. It was also made to appear by the stipulation that at all times on and after the date of the collection of the sight draft, and up to and including the date of the suspension of the bank, and the appointment of the receiver, the bank had not less than $ 15,000 of cash, and that not less than $ 10,000 thereof passed into the actual possession of the receiver. This was a sufficient tracing of the funds into the hands of the receiver, under our holding in the Brown case and in prior cases cited therein.
It is contended also on behalf of appellant that, because of the method adopted in the collection of the sight draft, the proceeds of such collection never had any distinct identity, and that for that reason they could not be traced either into the bank or into the hands of the receiver. The method of collection was that the Swaney Company drew its check upon its own account in the collecting bank for the payment of the sight draft. It had an account of $ 4,500, against which it drew. Its check was charged against this account, and the...
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