Mitchell v. Bank of Indianola

• Decision Date: 06 February 1911
• Docket Number: 14332
• Citation: 98 Miss. 658,54 So. 87
• Court: Mississippi Supreme Court
• Parties: D. E. MITCHELL v. BANK OF INDIANOLA ET AL

54 So. 87

98 Miss. 658

D. E. MITCHELL v. BANK OF INDIANOLA ET AL

No. 14332

Supreme Court of Mississippi

February 6, 1911

APPEAL from the chancery court of Leflore county, HON. M. E. DENTON Chancellor.

Bill by D. E. Mitchell against the Bank of Indianola et al. From a decree sustaining a demurrer and dismissing the bill complainant appeals.

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

Reversed and remanded.

Tim E Cooper, for appellant.

Counsel for the appellee are pleased to take one part of complainant's bill and to assert that the part they select is that, by virtue of which the Bank of Indianola is sought to be held liable. If the part selected was the only averment of the bill upon which it was sought to hold the bank and the other defendants, I should confidently submit that the admission by the demurrer of those particular averments was sufficient to uphold the jurisdiction of a court of equity.

But counsel cannot, by ignoring other material averments of the bill, take them out of the case. They form a part of the case, although ignored by counsel.

I again call the attention of the court to the averment of the bill that the deposit was made in the Bank of Indianola to be held by it "as the agent and trustee of the complainant, to be returned to him if the contract with Shepherd should not be executed."

The whole argument of counsel is that the simple relation of debtor and creditor existed between the complainant and the Bank of Indianola. They blindly ignore the other averment of the bill showing that the fund was not a general deposit creating the simple relation of creditor and debtor between the complainant and the bank. There may be a debt due by an agent or trustee to the principal or cestui que trust. If this fund had been sent to the Bank of Indianola with instructions to invest it in any certain sorts of securities and the remittance had been in the shape of a check which had to be cashed, as was the case here, I suppose counsel would contend that if the bank put the fund in such shape or even if the complainant put the fund in such shape that the particular bill of exchange or the particular bank notes which were recovered were not to be returned, that this fact dominated the situation and prevented a relation or trust from arising.

The mere mingling of a lot of dollars held in trust with other dollars does not affect the trust relation. If the trust fund is mingled with other funds of the trustee, on general deposit in a bank and checks drawn by the trustee on the general fund, the court of equity will hold that what remains of this commingled fund is a trust fund. Knatchwell v. Hallett, 13 Chan. Div. 695; Pennell v. DeFell, 4 D. E. G. M. G.

It is the debt arising in the trust relation and not the particular money whether exchanged or the original money is charged by the trust. Van Allen v. The Bank, 52 N. Y.; Hauptman v. The Bank, 83 Hun 78; Roca v. Byrne, 145 N.Y. 182.

In one of these cases the court said if an agent or trustee had one hundred dollars in one pocket which belonged to the trust fund and spent that and took another one hundred dollars out of another pocket and deposited it in the bank, that the trust was not thereby discharged.

Just how the appellee is to admit that it received the fund "to be held by it as the agent and trustee of the complainant to be returned to him if the contract with Shepherd should not be executed" and then to contend that it was a simple debtor to the complainant, I confess I do not understand, and since counsel for the appellee have not in their brief suggested how this proposition is to be worked out, I leave the matter for the cogitation of the court.

I do not think I have misstated either the position assumed by the chancellor nor the contention of counsel; in fact, I have stated counsel's contention distinctly, as they put it themselves, for I have said in my original brief that "their contention was that there never was a trust relation between the complainant and the bank; that the complainant never had any other than a purely legal demand enforcible in a court of law and there never was a time when he might have invoked the jurisdiction of the court of equity."

If this is not the contention of the appellee in the brief they have filed, I admit that I do not know for what proposition they do contend.

Counsel for the appellee are also unfortunate in their reply to my second proposition, to-wit: that even if it be conceded that complainant's demand was purely of a legal nature, a court of equity would have jurisdiction to avoid multiplicity of suits, for which proposition I cited a recent decision of this court directly in point. Tisdale v. Insurance Company, 84 Miss. 709.

Now the court will observe how, with a slight twist, this contention is sought to be diverted and its whole nature changed. Counsel correctly quoted from my brief the position which I advanced, which was that "each of the defendants who have received that money is liable to complainant in an action at law."

I never did assert that the complainant could sue the defendants other than the Bank of Indianola in one joint action, and clearly he could not. I said in my original brief, that "the other defendants are liable because each of them has a part of that fund." I did not think it necessary to go on and say that the bank could sue Mr. Gardner and recover from him so much of the trust fund as he had taken to himself and that it could sue Mrs. Gardner to recover so much of the trust fund as had been distributed to her, and that it could sue Mrs. Pitts and recover so much of the trust fund as had been distributed to her, and that it could sue Mr. Pollard and recover so much of the trust as had been distributed to him, and that it could sue Mr. Hamner and recover so much of the trust fund as had been distributed to him. I did state that each of the defendants was liable, and so I yet contend, but I never did claim that the complainant could bring one action against all the defendants jointly, and it is clear that he could not.

Suppose Mrs. Pitts had only gotten five hundred dollars of the ten thousand dollars trust fund. It is clear that her liability would have been the amount she got and not the amount of the fund from which the money she got was derived.

Counsel are mistaken in saying that I ever argued that having a right of action at law against all the defendants, I had a right to institute this suit to prevent a multiplicity of suits. What I did say was, that having rights of action against each of the defendants and the liability of each defendant depending upon precisely the same state of facts and of law, that under the decision of this court in the Tisdale case, the jurisdiction of equity was clear to prevent a multiplicity of suits. Unless the Tisdale case is to be overruled or can be distinguished from the present case, I am unable to see why it does not control.

The proposition for which counsel contends--that a mere deposit in the bank without more creates a relation of debtor and creditor, but where there is a special agreement under which the deposit is made, that of course, controls unless the bank, simply because it is a bank, is to be exempt from the ordinary rules, which control contracts between individuals.

Counsel for the appellee refer to the case of Cooper v. The Bank and what is shown by the facts in that case. I am entirely willing for the court to take that record as disclosing the full facts under which this deposit was made. From that record it appears that Pitts, the cashier of the bank, and H. C. Williamson were the agents of Shepherd and others for the sale of the lands. The complainant was required to deposit a certain sum as a guarantee that he would carry out the contract of purchase, if made. This fund was to be deposited with the Bank of Indianola. There was nothing to suggest that it was to be a general deposit. The thing that was sent down was a certified check and the Bank of Indianola might have held that as well as the cash. This check was made payable to Williamson and he, instead of sending the check to the Bank of Indianola, indorsed it over to the Union and Planters Bank and it is true that the Bank of Indianola used this fund, but there is not a line in the whole record to show that the complainant ever assented to such use.

When the trade with Shepherd fell through, Williamson wanted to return this fund to Mitchell, but the Bank of Indianola expressly claimed that it was a deposit for the benefit of Shepherd and that they would not give it up, because, as the cashier wrote, he intended to hold the fund for the benefit of Shepherd. He was willing enough to give it up when he had the opportunity to get up as a forfeit for the sale of the lands in which his wife had an interest and in which the president of the bank and his wife had an interest.

Percy, Moody & Percy, for appellee.

Counsel for appellant in a very adroit and ingenious manner attempts to place us in the position of contending that, where money of any description is deposited in a bank and the identical gold, silver or bank bills which were deposited are to be returned to the depositor upon certain conditions, and not its equivalent, it would not constitute a trust cognizable in a court of equity. In so doing, however, he does not state our position correctly. If the bill in this case charged, and the fact was, that a certain specific sum of money was deposited with the Bank of Indianola for a certain specific purpose, and if that purpose failed and that the identical money so deposited, and not its equivalent, should have been returned to appellant, but that the bank in violation of its trust delivered this specific money without the...