Midland Nat. Bank v. Brightwell

• Decision Date: 21 February 1899
• Citation: 148 Mo. 358,49 S.W. 994
• Parties: MIDLAND NAT. BANK OF KANSAS CITY v. BRIGHTWELL.
• Court: Missouri Supreme Court

49 S.W. 994

148 Mo. 358

MIDLAND NAT. BANK OF KANSAS CITY v. BRIGHTWELL.

Supreme Court of Missouri, Division No. 2.

February 21, 1899.

BANKS AND BANKING — INSOLVENCY — FOLLOWING TRUST FUND.

A bank sent to another items for collection, which it received and collected, partly by accepting a draft of another bank, and by charging the accounts of its depositors. Such drafts, together with one of its own, were forwarded in settlement, but were not paid, as both banks made assignments. Held, that the first bank did not have a preference over general creditors of the insolvent collecting bank on account of such collections, since, as it received no money, and there was no augmentation of its assets by such collection, no trust fund was created in its favor.

Appeal from circuit court, Saline county; Richard Field, Judge.

Action by the Midland National Bank of Kansas City, Mo., against R. T. Brightwell, assignee of Slater Savings Bank. There was a judgment for plaintiff, and defendant appeals. Reversed.

This cause was heard and decided by the circuit court of Saline county, on the following agreed statement of facts: "State of Missouri, County of Saline — ss.: In the Saline County Circuit Court. Midland National Bank vs. R. T. Brightwell, Assignee Slater Savings Bank. It is hereby stipulated and agreed by and between the parties hereto that the facts in this case are as follows, and that this agreed statement may be read as evidence in this case: It is admitted that from and after the 12th day of December, 1894, and for some time prior thereto, the Midland National Bank was, and is now, a banking corporation, duly organized under the laws of the United States with reference to national banks, and doing a general banking business at Kansas City, Missouri; that on December 12, 1894, the Midland National Bank sent collection items to the Slater Savings Bank of Slater, Missouri, with instructions to remit in Kansas City exchange. These items aggregated $6,726.44, a large part of which consisted of drafts drawn on the Citizens' Stock Bank of Slater, Mo. All of these items were collected by the Slater Savings Bank, either by charging the accounts of depositors against whom the drafts were drawn after being authorized to do so by such depositors, and crediting the account of Midland National Bank, or by a clearing of the day's business with the Citizens' Stock Bank. In settlement of the balance for the day against it, the Citizens' Stock Bank gave the Slater Savings Bank its draft on St. Louis for $4,134.31. Slater Savings Bank indorsed this draft, and forwarded it, together with its own draft, on St. Louis, for $2,650, to the Midland National Bank, on account of the collection items above mentioned. Neither of these drafts was paid, and both the Slater Savings Bank and Citizens' Stock Bank of Slater failed December 17, 1894, and their assets are in the hands of their respective assignees. The Midland National Bank has not received payment for any portion of the collection items above mentioned represented by these drafts for $4,134.31 and $2,650. At the time of the failure of the bank, the assignee found in the vault the sum of $449 in cash. And it is also admitted that said draft of $2,650 was forwarded to plaintiff on December 14, 1894, and was duly presented for payment on December 17, 1894, when payment was refused, and said draft was protested for nonpayment; and also that the said defendant, as assignee, had in his hands at the date of the trial sufficient assets to pay the draft of $2,650 and interest thereon in full." No other evidence was offered at the trial. Thereupon the defendant prayed the court to declare the law to be "that, under the agreed statement of facts herein, plaintiff is not entitled to charge the above check of $2,650 as a trust fund against the Slater Savings Bank, and that the plaintiff is not entitled to a preference in its favor over the general creditors of the Slater Savings Bank, but that the said sum of $2,650 may be allowed as a general claim against the assets of said bank in the hands of the defendant, as assignee thereof," — which declaration of law the court refused to give, and defendant duly excepted to said refusal. The circuit court then rendered a decree that the said sum of $2,650 collected by the Slater Savings Bank was received as a trust fund, and was held as such when said bank failed, and that the assignee held it in the same way; and the court further found there were sufficient assets in the hands of the assignee to...