Mississippi Valley Trust Co. v. West St. Louis Co.

Decision Date06 April 1937
CourtMissouri Court of Appeals

Appeal from Circuit Court of City of St. Louis.--Hon. H. A Hamilton, Judge.


Judgment reversed and cause remanded.

Robert L. Aronson for appellant.

(1) The trial court erred in sustaining objection to the filing of the amended claim; this was not a new claim, but merely an enlargement and a development of the original claim admittedly filed in proper time; further, respondent could not adjudicate priorities and he was not prejudiced by the amendment. State ex rel. Gentry v. Page Bank, 14 S.W.2d 597; Woods v. Cainsville Bank, 11 S.W.2d 56; Macon County v. Farmers' Trust Co., 325 Mo. 784 29 S.W.2d 1096; In re Liquidation of Gower Bank, 55 S.W.2d 713; Missouri Public Service Co. v. Cantley, 57 S.W.2d 755; In re Cooper County State Bank, 67 S.W.2d 109; Miller v. Farmers' Exchange Bank, 67 S.W.2d 528; Henneman v. Rosebud Bank, 78 S.W.2d 113; In re Hodiamont Bank, 91 S.W.2d 127; Matter of Lee Hoyn Ton, 268 N.Y. 381, 150 Misc. 5. (2) The trial court erred in sustaining objection to the introduction of evidence, since the filing of the amended claim should have been permitted; and, further, because the court's ruling was too general. (3) Appellant was entitled to a preference under sec. 5575, subd. 2, of Revised Statutes of Missouri 1929. Provisions of cited statute; In re Hodiamont Bank (Jones v. St. Rose's Church), 91 S.W.2d 127; Shell Petroleum Corp. v. Sturdivant Bank, 87 S.W.2d 1064; New York Indemnity Co. v. Farmers' Trust Co., 227 Mo.App. 55, 57 S.W.2d 201; People ex rel. Nelson v. Dennhardt, 353 Ill. 450, 188 N.E. 464; State ex rel. Sorenson v. Farmers' State Bank, 125 Neb. 427, 250 N.W. 557. (4) Upon well-settled principles of equity, a trust arose in this case, by reason of the bank's failure to perform its duty and to obey its instructions in the payment and remittance of the proceeds of the collection of the check drawn upon it, so that appellant's claim should be allowed as preferred. In re Cooper County State Bank, 67 S.W.2d 109; State ex rel. Gentry v. Page Bank, 14 S.W.2d 597; Laclede Trust Co. v. Rodenberg, 93 S.W.2d 55; Johnson v. Farmers' Bank, 11 S.W.2d 1090; In re Hodiamont Bank, supra; Bank of Illmo v. Sturdivant Bank, 89 S.W.2d 560; Farmers' Bank v. Moberly, 78 S.W.2d 906; Henneman v. Rosebud Bank, 78 S.W.2d 113; Kahmann v. Moberly, 77 S.W.2d 858; Koehler v. Joplin State Bank, 68 S.W.2d 728; Hiatt v. Miller Bank, 34 S.W.2d 532, 224 Mo.App. 1040; Claxton v. Cantley, 297 S.W. 975; Householder v. Cantley, 27 S.W.2d 1034; Schreier v. Joplin State Bank, 63 S.W.2d 179; Andrews v. Farmers' Trust Co., 21 S.W.2d 641; Blackshaw v. French, 45 S.W.2d 915; Thomson v. Bank of Gerster, 74 S.W.2d 74; Niewald v. Rosebud Bank, 78 S.W.2d 464; Nichols v. Bank of Syracuse, 220 Mo.App. 1014, 278 S.W. 793. (5) Apart from the statute, since a collecting agent, unless specially authorized otherwise, can accept only cash as payment, a draft given in settlement of a collection item is deemed to be received provisionally, and credit is conditioned upon clearance; therefore, a claim upon a cashier's check given in remittance of a collection must be allowed as preferred. Bank of Republic v. Republic State Bank, 328 Mo. 848, 42 S.W.2d 27; Bank of Poplar Bluff v. Millspaugh, 281 S.W. 733. (6) The record being complete and appellant being entitled to a preference, the court should correct the errors of the trial court by reversing the judgment and remanding the cause with appropriate directions to enter a new judgment granting the claim for a preference, as in Blackshaw v. French, supra.

Robt. J. Keefe for respondent.

Igoe, Carroll Higgs & Keefe of counsel.

(1) The trial court correctly ruled that the so-called "amended claim" (which had never been presented to or approved by the Commissioner, but was presented directly to the Court) should be excluded from consideration. (a) The determination of preferences, as well as all other action in the liquidation of insolvent banks, is governed by the statutes. The circuit court has no jurisdiction with respect to it, except such as the statutes confer. R. S. Mo. 1929, secs. 5316-5339; Koch v. Missouri-Lincoln Trust Co. (Mo.), 181 S.W. 44, l. c. 48; Commerce Trust Co. v. Farmers Exchange Bank (Mo.), 61 S.W.2d 928, l. c. 930--Pts. 3 and 4; Exchange Bank v. Turner (Mo.), 14 S.W.2d 425, l. c. 431. (b) Under the statute the court had jurisdiction only to pass on the claim which had been presented to the Commissioner and by him submitted for adjudication as to the asserted right of priority. R. S. Mo. 1929, sec. 5336. (c) At the time when the amended claim was presented to the court--June 11, 1934 (Abs. pp. 6 and 16)--it could not have been considered even by the Commissioner, since the time for filing claims had expired on August 7, 1933 (Abs. p. 31). The claim was barred by limitation. R. S. Mo. 1929, section 5333; Bowersock Mills & Power Co. v. Citizens' Trust Co. (Mo. App. St. L.), 298 S.W., l. c. 1051-52; Commerce Trust Company v. Farmers Exchange Bank (Mo.), 61 S.W.2d 928, l. c. 930-931, syllabus pt. 4. (2) (a) A preference may be adjudged only where money or property of the claimant was held by the insolvent in trust and where that trust fund has augmented the assets in the hands of the Commissioner of Finance. In re Farmers Exchange Bank of Gallatin (Mo.), 37 S.W.2d 936, l. c. 943, syllabus pt. 7; Mann v. Bank of Greenfield (Mo.), 46 S.W.2d 874, l. c. 876, syllabus pt. 3. (b) Claimant has the burden of establishing the facts necessary to demonstrate the right to the preference sought. Smalley v. Queen City Bank (Mo. App.), 94 S.W.2d 954, l. c. 959, syllabus pts. 3 and 4; McPheeters v. Scott County Bank, 63 S.W.2d 456, l. c. 460, pt. 2. And a trial court's judgment denying preference will be upheld if sustainable upon any theory supported by the record. Smalley v. Queen City Bank (Mo. App.), 94 S.W.2d 954, l. c. 959, syllabus pts. 3 and 4; McEwen v. Sterling State Bank (Mo. App.), 5 S.W.2d 702, l. c. 705, pt. 2. (3) It is well settled that one accepting a cashier's or treasurer's check (excepting an agent for collection, who may not accept anything but cash) enters into a mere debtor-creditor relationship with the issuing bank. There is no element of trust in such a transaction in the absence of fraud. Bank of Republic v. Republic State Bank, 328 Mo. 848, 42 S.W.2d 27, 29; Smalley v. Queen City Bank, 94 S.W.2d 954; Cormany v. Wells-Hine Trust Co. (Mo. App.), 44 S.W.2d 172; In re Hodiamont Bank, 91 S.W.2d 127, pt. 2. But if a cashier's check or draft be issued by a bank by way of remittance of money collected by it upon an item entrusted to it for collection, the payee has a preferred claim not on the check or draft, but for the money collected by the issuing bank, which it holds as agent or trustee. Bank of Republic v. Republic State Bank, 328 Mo. 848, 42 S.W.2d 27, 29. Such a right of preference exists, too, where the payee of the check or draft was also only an agent for collection, since all who deal with him are bound to know that he has no authority to accept in payment anything but cash. Bank of Republic v. Republic State Bank, 328 Mo. 848, 42 S.W.2d 27, 29. (4) In this case the preference sought cannot be justified upon any theory of agency for collection because: (a) The item presented by the claimant was not "entrusted" to West St. Louis Trust Company, but was presented directly over the counter. It was presented not for collection but for payment. Bank of Republic v. Republic State Bank, 328 Mo. 848, 42 S.W.2d 27, 29; American Bank of De Soto v. People's Bank of De Soto (Mo. App.), 255 S.W. 943. (b) The item presented showed on its face that it was owned by the company presenting it (the claimant) and there was no indication, either by restrictive endorsement or otherwise, that it was acting as a collecting agent for an undisclosed principal. See Sec. 5569, R. S. Mo. 1929. Moreover, the present contention of the claimant that it was only an agent for collection of the item presented is contrary to its claim (Abs. pp. 2-4), and is not supported even by the evidence which it tendered in support of its amended claim (Abs. pp. 18, 22). (5) The transaction does not fall within the class as to which preference is accorded by the Bank Collection Code because claimant, by accepting, if it did not request, the cashier's check in payment of the item presented, "accepted an unconditional credit," which credit was entered on the books of West St. Louis Trust Company. See R. S. Mo. 1929, sec. 5575, div. 2; Ex parte Sanders, 168 S.C. 323, 167 S.E. 154; South Carolina State Bank v. Citizens Bank (S. C.), 176 S.E. 346; Lindsay v. Elliott (U.S.C. C. A., 4th Circuit), 77 F.2d 95, l. c. 96. The following decisions by this court are distinguishable on the facts. In re Hodiamont Bank (Mo. App.), 91 S.W.2d 127; Shell Petroleum Bank v. Sturdivant Bank (Mo. App.), 87 S.W.2d 1064. Unless the voluntary acceptance of a cashier's check (which is properly entered on the bank's books to the credit of the payee) is the acceptance of an unconditional credit within the meaning of the statute (section 5575), the statute will work an unjust discrimination as between a bank's creditors to such a degree as probably to render it unconstitutional--a result which must be avoided if, by a fair interpretation, it can be. Bassett v. Mockton, 308 Mo. 641, 649, 274 S.W. 404, 407.

SUTTON, C. Hostetter, P. J., and Becker and McCullen, JJ., concur.



By this action the Mississippi Valley Trust Company seeks to have its claim for $ 2,845 allowed as a...

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