Missouri Tp., Chariton County v. Farmers' Bank of Forest Green
Decision Date | 03 July 1931 |
Parties | Missouri Township in Chariton County, Suing by Its Township Board, Henry J. Weber, Trustee, and R. W. Goll and Guss Noll, Members, Appellant, v. Farmers Bank of Forest Green |
Court | Missouri Supreme Court |
Appeal from Chariton Circuit Court; Hon. James A. Cooley Special Judge.
Affirmed in part and reversed and remanded in part.
Collet & Son for appellant.
(1) It being admitted that defendant bank had knowledge of the trust character of the fund of which it was depositary, it had no right to apply any part of said fund to the discharge of any debt that the trustee owed defendant bank. Johnson v Bank, 56 Mo.App. 257; Clark v. First Nat. Bank, 57 Mo.App. 277; Stoller v. Coltz, 88 Mo. 514; Horrigan Realty Co. v. First Nat. Bank (Mo. App.), 273 S.W. 772; Union Stock Yards Nat. Bank v Gillespie, 137 U.S. 411, 34 L.Ed. 724; Duncan v. Jaudon, 82 U.S. 165; National Bank v. Life Ins. Co., 104 U.S. 54; 26 L.Ed. L. C. 698; Allen v. Trust Co., 97 N.E. 916. (2) The defendant bank was charged with notice of the misappropriation of this fund, because it had knowledge of the fact that the money appropriated belonged to a trust fund. National Bank v. Life Ins. Co., supra; Sayre v. Weil, 15 L. R. A. 544; Bischoff v. Yorkville Bank, L. R. A. 1916F 1059. (3) The consent of Colson, the trustee, to the transfer of this money from the trust fund gave the bank no greater right to it than Colson had. The bank had no more right to appropriate this money to itself in payment of Colson's debt owing to it, than Colson had to appropriate it for any other personal use. National Bank v. Life Ins. Co., supra; Interstate Nat. Bank v. Claxton, 65 L. R. A. 820; Duckett v. Natl. Mechanics Bank, 39 L. R. A. 84. (4) The Statute of Limitation will not run against the enforcement of an express trust. Bender v. Zimmerman, 80 Mo.App. 138; 2 Pomeroy's Equity Jurisprudence, sec. 1080, p. 657. (5) In an action based upon fraud where the fraud has been concealed from the party wronged, the Statute of Limitation will not commence to run until the discovery of the fraud. College v. Dockery, 241 Mo. 551.
Lamb & Lamb for respondent.
(1) The burden was on plaintiff to show that Colson was in default at the date of the giving of the respective checks, made the basis of this suit, and also to show that such default was occasioned by Colson's transactions with the bank. Moore v. Bank, 154 Mo.App. 522; State v. Rubey, 77 Mo. 618; Wittich v. Wittich, 263 S.W. 1002. (2) This being a suit for money had and received, under the rules applicable thereto, the plaintiff neither plead nor proved the facts such as would entitle it to recover. Clifford Banking Co. v. Commission Co., 195 Mo. 288; Montgomery v. Wise, 138 Mo.App. 187; Bank v. Bank, 244 Mo. 581; Knox County v. Hunolt, 110 Mo. 76; Chapman v. Douglas County, 107 U.S. 358, 27 L.Ed. 382; Sparks v. Jasper County, 213 Mo. 239; Brown v. City of Atchison, 17 P. 472; Stockman v. Allen, 160 Mo.App. 232. (3) Plaintiff's alleged cause of action in counts one and two of its petition was barred by limitations, as provided by Sec. 1317, R. S. 1919. Heisler v. Clymer, 179 Mo.App. 122; Brown v. Mfg. Co., 292 S.W. (Mo. Sup.) 1023; State ex rel. v. Yates, 231 Mo. 287; Shelby County v. Bragg, 135 Mo. 298; Compton Co. v. Trust Co., 279 S.W. 748; Butcher v. Butler, 134 Mo.App. 68; Paul v. Draper, 158 Mo. 197.
Westhues, C. Cooley, C., not sitting; Fitzsimmons, C., concurs.
Plaintiffs, on January 8, 1927, filed their petition in the Circuit Court of Chariton County, Missouri. An amended petition was filed April 19, 1927. The petition contains five counts. They are similar in character, with the exception of the amounts. We have selected count four of the amended petition as an illustration. It is as follows:
Defendant, in due time, filed its answer. By an agreement of the parties a jury was waived and the cause was tried before the court, sitting as a jury. Judgment was entered for defendant on the first and second counts of the petition, on the theory that they were barred by the Statute of Limitations (Sec. 862, R. S. 1929). Judgment was entered for plaintiff on the third count for $ 2.05, on the fourth count for $ 5.61, and on the fifth count for $ 1.10. From this judgment plaintiffs appeal.
The facts relied upon by plaintiffs for a recovery, as revealed by the testimony, are as follows:
J. E. Colson was the trustee of Missouri Township, and as such had the care and custody of the funds; which funds were deposited by Colson in the defendant bank. They were expended by orders of the Township Board in payment of its debts. The practice followed was: The Township Board, after allowing claims, would make an order directing the secretary to draw a warrant in favor of the creditor. This warrant was presented to Colson, the trustee, who would then draw a check on defendant bank in payment of the warrant.
Colson embezzled a portion of the funds of the township. When the funds reached a low ebb, Colson borrowed money from the defendant bank by giving his personal note and a chattel mortgage on his property. Colson directed the bank to deposit or credit the township with the amount borrowed. When tax paying time arrived the collector of the county would pay to the trustee, Colson, the funds collected belonging to the township. Colson would then immediately draw a check on the funds of the township, in favor of the defendant bank, in payment of the amount borrowed on his note, with interest. No order of the Township Board was made to issue a warrant, nor was a warrant issued, in payment of any of the notes made by Colson to the bank. The defendant bank did not present its claim to the Township Board.
Defendant's testimony tended to show that Colson, at the time he borrowed the funds from the bank, represented to the bank that the township funds were low, due to lawful expenditures; claiming the school districts had overdrawn their accounts. That the township desired the loans for the purpose of enabling it to pay its current bills. The loans to be repaid when the collector of the county would pay over to the trustee the taxes and revenue collected for that year. The defendant bank denied any knowledge of the embezzlements.
The trial court, when rendering judgment, orally made a finding of facts, which are incorporated in the bill of exceptions and made a part thereof. This finding discloses the theory upon which the court rendered judgment. It is in part as follows:
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