Mississippi Central Railroad Co. v. Conner

• Decision Date: 30 April 1917
• Docket Number: 19166
• Citation: 114 Miss. 63,75 So. 57
• Court: Mississippi Supreme Court
• Parties: MISSISSIPPI CENTRAL RAILROAD COMPANY v. CONNER

75 So. 57

114 Miss. 63

MISSISSIPPI CENTRAL RAILROAD COMPANY v. CONNER

No. 19166

Supreme Court of Mississippi

April 30, 1917

Division B

APPEAL from the chancery court of Adams county, HON. R. W. CUTRER Chancellor.

Petition seeking the probate of a claim by the Mississippi Central Railroad Company against L. P. Conner, receiver of the First Natchez Bank. From a decree sustaining a demurrer to the petition, and dismissing the petition, plaintiff appeals.

The facts are fully stated in the opinion of the court.

Affirmed.

S. E Travis, for appellant.

The petition, as we submit, presents several grounds of relief. In the first place, the deposit in the First Natchez Bank was in the nature of a special deposit, impressed with a trust, and the title thereto was never in the First Natchez Bank and did not and could not pass to the receiver. As seen, it is admitted by the demurrer that the funds in question were "never deposited with the said First Natchez Bank to be checked on generally and as a checking account in the usual course of business." It is admitted that the said funds were deposited with the said First Natchez Bank pursuant to an agreement by which the same were to be held for safe keeping until the end of the week in which the deposits were made, and then transferred to appellant's regular bankers, said First National Bank of Commerce. It is admitted that said funds were deposited in and held by the said First Natchez Bank "solely in the manner and for the purposes" stated. And it appears from the custom adopted relative to the transfer of the funds to appellant's regular banker that they were never checked against generally. The whole of the weekly balance was transferred by check in each instance each week without a single exception during the whole time special deposit had been so made. Such being the case, the title to the fund never passed to the First Natchez Bank or to its receiver holding no better title than it had, and the chancellor erred in not approving the account with priority of payment as prayed for. The following authorities show this: 7 Corpus Juris., pages 631-632, 660; Zane on Banks & Banking, page 283; 5 Cyc., page 515; Armour v. Bank, 69 Miss. 706, (Opinion); Smith v. Bank, 30 L. R. A. N. S.) 517, (Syllabus); Ryan v. Phillips, 44 P. 909 (Syllabus); Bank v. Mining Co., 46 N.E. 202 (Syllabus); 8 Corpus Juris., page 539, 542; 7 Corpus Juris., page 681 (Note); Parker v. Reddick, 7 A. S. R. (Miss.), 647; Hubbard v. Supply Co., 4. L. R. A. (N. S. ) 132; Ryan v. Phillips, 44 P. 909 (Syllabus); Bank v. Mining Co., 46 N.E. 202 (Syllabus); 8 Corpus Juris., page 539, 542; 7 Corpus Juris., page 681 (Note); Parker v. Reddick, 7 A. S. R. (Miss.), 647; Hubbard v. Supply Co., 4 L. R. A. (N. S.) 132; Romanski v. Thompson et al. 11 So. 828.

In the third place there are lines of authorities supporting appellant's claim for priority of payments on at least three other grounds; namely, 1, the making of the check operated as an assignment of the fund pro tanto; 2, that the making and presenting of the check operated as a transfer of the fund to the holder; and 3, that the making and presenting of the check operated as an equitable assignment of the fund. The authorities supporting these three propositions, as well as those supporting the two points first discussed, so overlap each other that it is deemed sufficient to submit a few excerpts from them generally on the points involved. Bank v. Keith, 56 N.E. 179 (Ill.); Wyman v. Bank, 48 L. R. A. 566 (Opinion); Ill. Hotel Co. v. Bank, 63 Am. St. Rep. 271; Ill. Hotel Co. v. Bank, 39 L. R. A. 481 (Ill.); Bank v. Trust Co., 23 L. R. A. 611 (Ill.); Bank v. Jones, 31 Am. St. Rep. 403, (Ky. ); Commonwealth v. Distillers, etc., Co., 116 S.W. 766 (Mo.); Savings Institution v. Ade, 8 F. 106 (Neb.); John Fonner v. Smith, 11 L. R. A. 528; Neb. Bank v. Bank, 77 N.W. 346, 43 L. R. A. (N. S.) 100, 67 L. R. A. 617; Kaesemeyer v. Smith, 43 L. R. A. (N. S.) 101 (Note); Bank of Cincinnati v. Coates, 8 F. 542-3; Schuler v. Leclede Bank, 27 F. 427; Bank et al. v. Schuler (U. S.), 30 L.Ed. 701; Ryan & Sons v. Paine, 66 Miss. 678; Merchantile Co. v. Packing Co., 69 So. 294 (Miss.); Stoller v. Coates, 88 Mo. 514; Northumberland Bank v. McMichael, 51 Am. Rep. 530; Plumas Co. Bank v. Bank of Rideout, etc., 47 L. R. A. (N. S.), 553-4 (Note), 5 Cyc., page 560; 7 Corpus Juris., page 734.

We respectfully submit that the decree of the lower court should be reversed, and that judgment should be entered here allowing the claim with priority of payment, as prayed for, or, in the event the appellant is not entitled to this relief, then that the cause should be reversed and remanded with direction to the lower court to allow the claim with priority of payment.

Chas. F. Engle and L. T. Kennedy, for appellee.

The instant case is one purely and simply of an ordinary general deposit. Turn it and twist it as you may, the fact remains that appellant's agent at Natchez deposited his collections daily in the bank just as any ordinary depositor did, that these funds were credited to appellant's account just as the funds of other ordinary depositors of the bank were credited and that these funds went into the cash of the bank just as other deposits did, without any ear-marks or special designation whatsoever to identify them or to distinguish them from any other deposit made in general course of business.

Appellant could not by surrounding the manner in which it withdrew these deposits with "frills and fure-belows" and circumlocutions and involved methods add to or detract from the obligation of the bank or make that obligation any less or any more than the bank's obligation to any general depositor, namely: To pay the check, draft or other order when presented, if the depositor had on hand sufficient funds to his credit.

Neither could the appellant by adopting any particular or peculiar method of its own in withdrawing its deposit add to or take from the liability of the bank or make that liability and different than the bank's liability to any other depositor for failure to pay the check, draft or other inland bill or exchange when presented; namely in case of an insolvent bank in hands of receiver, to get the pro rata distribution allotted to other depositors.

The bill says that appellant had an "arrangement" that its agent at Natchez would make these deposits daily and at the end of week appellant would draw out the deposits. This "arrangement" is no more than the arrangement any general depositor makes when he puts his money on deposit to his credit. He can draw it out when and how and in what manner he pleases. So could appellant draw out the deposit hourly, daily, weekly, monthly or yearly. The "arrangement" so called was only for the benefit of appellant, who was simply making a convenience and a use of the bank without any corresponding benefit flowing to the bank as in the case of depositors who kept a balance with the bank. This court certainly can have no patience with a contention that such a depositor who was getting all in the way of service and giving nothing in the way of benefit, compared with the depositor who maintained a regular balance, should be paid by preference and priority over that depositor. This case presents for discussion no principle which is new to this court.

There is no potent charm in the allegation that appellant's Hattiesburg Bank sent appellant's check to the First Natchez bank in time for the check to have been paid before suspension of business by the latter.

No matter how appellant may state its case; no matter how long the circumference of the circle it travels to get from the point where it made the deposit back to the point where it tried to withdraw the deposit appellant is always traveling in a circle. "There is no such magic in the word "trust" as to convert all the assets of a bank into a fund to secure one who deals with it for convenience of collecting claims or we might add, convenience of conducting its business in preference to others who trust it and deal with it." From decision CAMPBELL, C. J., in Billingsley v. Pollock, 69 Miss. 759, 13 So. 828, 30 Ann. St. Rep. 585. Above case was quoted with approval by this court in Alexander County National Bank v. Conner 70 So. 327.

The closing words of that decision state the law in this case: "The appellant in this case has no lien whatever on any money or assets in the bands of the receiver, but is simply a general creditor of defunct bank and should be treated as such."

OPINION

COOK, P. J.

This is an appeal from the chancery court of Adams county. The appellant sought in the court below, by petition as amended, to have its certain claim against the said First Natchez Bank probated and allowed with priority of payment, or as a preference claim. The receiver demurred to the petition, and final decree was entered sustaining the demurrer and dismissing the petition, from which adverse decree the appellant prosecutes the appeal.

The avertments of the petition are these:

"That prior to the said 29th day of October, 1913, the said petitioner, through arrangement with the said First Natchez Bank, used it as a depository for the receipts of its said Natchez station and office. Such arrangement existed for a long time and until the said First Natchez Bank ceased doing business and went into the hands of a receiver as aforesaid. ...