Montgomery v. Smith

• Decision Date: 26 January 1933
• Docket Number: 6 Div. 239.
• Citation: 226 Ala. 91,145 So. 822
• Parties: MONTGOMERY, SUPERINTENDENT OF BANKS, ET AL. v. SMITH.
• Court: Alabama Supreme Court

145 So. 822

226 Ala. 91

MONTGOMERY, SUPERINTENDENT OF BANKS, ET AL. v. SMITH.

6 Div. 239.

Supreme Court of Alabama

January 26, 1933

Appeal from Circuit Court, Walker County; Ernest Lacy, Judge.

Petition in equity by H. C. Smith against H. H. Montgomery, as Superintendent of Banks, liquidating the Central Bank & Trust Company, L. P. Cartwright, as special liquidating agent of said bank, and the Central Bank & Trust Company. From a decree for petitioner, respondents appeal.

Reversed and rendered.

Davis &amp Curtis, of Jasper, for appellants.

Chas R. Wiggins, of Jasper, for appellee.

KNIGHT J.

On October 29, 1931, the Central Bank & Trust Company, a banking corporation, doing a general banking business at Jasper Ala., was placed in the hands of H. H. Montgomery, as superintendent of banks, for liquidation and settlement of its affairs.

Upon taking over this bank for liquidation purposes, the said superintendent appointed L. P. Cartwright, one of the appellants, as liquidating agent, and at the time of the filing of the petition in this cause the said Cartwright, as such liquidating agent, was in the actual possession of the properties and assets of the bank.

On the 28th day of April, 1932, H. C. Smith, the appellee, filed the petition in this cause against the said H. H. Montgomery, as superintendent of banks, and against the said Central Bank & Trust Company and L. P. Cartwright, as the liquidating agent, seeking the recovery of $2,000 in gold coin, alleged to have been deposited with said bank by the complainant on December 26 (31), 1930, for safe-keeping.

It is averred in the petition that on the 26th day of December, 1930, the petitioner, being at the time "the owner and possessor" of $2,000 in gold coin of the United States, "wishing to preserve said gold coin money in its original form, safe from being lost or stolen and having confidence in the security of the said Central Bank and Trust Company and its employees and its safety deposit vault, deposited with the said Central Bank and Trust Company his said $2,000.00 in gold coin for safe keeping in its vaults and which gold coin money was placed in a substantial cloth bag and by the officers of said bank deposited in their vaults to be held and kept by them in its original form and shape for safe keeping for your petitioner to be returned to him at any time when called for either by himself or his wife, Mrs. Dora Smith; that this gold coin money in the amount of $2,000.00 was to be and remain the special property of your petitioner, and at no time to become the property of said Central Bank and Trust Company, or any part of the assets of said Central Bank and Trust Company, it being understood and agreed between your petitioner and the bank and its officials that the bank was acting merely for the accommodation of your petitioner in receiving and keeping said gold coin money in their safety vaults for petitioner, and further that no interest was to be paid to him by the said bank or any other consideration on account of said gold coin money being placed with them for safe keeping," etc. (Italics supplied.)

In paragraph 3 of the petition it is averred: "That at the time the Central Bank and Trust Company went into process of liquidation on, to-wit, October 29th, 1931, petitioner states to your honor that his said $2,000.00 in gold coin money was then in the vaults of said bank and had been continuously kept in said vaults of said bank from the time he deposited the same with the Central Bank and Trust Company for safe keeping for him up to the said date, October 29th, 1931; and petitioner further states and alleges the fact to be that ever since the said bank went into process of liquidation and was placed under the control of H. H. Montgomery, Superintendent of Banks, and his special liquidating agent, L. P. Cartwright, liquidating the affairs of said bank, this $2,000.00 in gold coin money belonging to petitioner has always remained in the vaults of said bank in the city of Jasper, Walker County, Alabama, in the same condition in which it was placed in a sack or cloth bag and was never used or loaned out by said bank, and the said gold coin is on this date in said vaults of the bank, in the possession of and under the control of H. H. Montgomery, Superintendent of Banks and his special appointed liquidating agent, L. P. Cartwright."

The petition alleges demand on the said Montgomery and on said Cartwright for the delivery of said money to petitioner, and their refusal.

Attached to the petition, and made a part thereof, are the affidavits of O. F. Cobb, active vice president, and J. W. Long, cashier, of the Central Bank & Trust Company, with reference to the deposit of said money.

Cobb's affidavit is as follows: "I, O. F. Cobb, vice-president of Central Bank and Trust Company, certify that I agreed with H. C. Smith to accept two thousand dollars in gold for safe keeping and the same gold to be returned to him, and the said gold was delivered to us in a coin bag and kept therein to pay the particular promise as stated therein in certificate numbered 9503 per copy hereto attached, and we have paid no interest on this certificate and the party is not claiming any interest."

This statement is signed by Cobb, and is sworn to by him before Wilmer R. Scott, notary public, on January 5, 1932.

The affidavit of said J. W. Long is in the same language, and was made on same day that the affidavit of O. F. Cobb was made.

Among other things, the petition prayed that a decree be entered directing that the $2,000 in gold coin be delivered to petitioner, and for such other orders and decrees as might be necessary in the premises, and "for such other and further and different relief as the facts of this case may warrant and your honor should find petitioner to be entitled," etc.

The respondents each demurred to the petition, assigning numerous grounds, among them, that the said L. P. Cartwright and Central Bank & Trust Company are not proper or necessary parties. No argument is here made in support of the contention that the petition was defective in any way, except in brief of appellant a short statement is made to the effect that the Central Bank & Trust Company, being in liquidation, and in the hands of the superintendent of banks, and said Cartwright, being simply the liquidating agent, were not proper or necessary parties. The brief on this point concludes: "We don't think this affects the merits of the case but it is a shot gun way of going about it that we are objecting to. We simply say there was misjoinder of parties because one party could have no charge or power over the funds because of court order." This scarcely rises to the dignity of an argument, and we will dismiss the subject with the statement that each of the parties was a proper, if not a necessary, party, and the court properly so held.

Under the averments of the petition, there can be no question but that the alleged deposit made by the petitioner was a special deposit, and, under the facts averred, taken as true, as we must upon demurrer, the title to the $2,000 in gold coin remained in said H. C. Smith. The relation of bailor and bailee, and not that of creditor and debtor was created thereby. Alston v. State, 92 Ala. 124, 9 So. 732, 13 L. R. A. 659; Boyden v. Bank of Cape Fear, 65 N.C. 13; Dawson v. Real Estate Bank, 5 Ark. 297; Lowry v. Polk County, 51 Iowa, 50, 49 N.W. 1049, 33 Am. Rep. 114; 2 Am. & Eng. Ency. of Law, 93; 1 Morse on Banking, § 183 et seq.; 3 R. C. L. 519, § 148; Fogg v. Tyler, 109 Me. 109, 82 A. 1008, 39 L. R. A. (N. S.) 847, Ann. Cas. 1913E, 41; Michie on Banks and Banking, 626, c. 9, § 328; First Nat. Bank of Decatur v. Henry, 159 Ala. 367, 49 So. 97.

The defendants answered the petition, in which they denied that the money was deposited with the Central Bank & Trust Company for safe-keeping; averring in substance and effect that the deposit was not a special deposit, but a time deposit, bearing interest at 4 per cent. per annum; that the deposit was in fact made some years prior to the 26th day of December, 1930; that sundry certificates, representing the deposits, were issued from time to time to said Smith, evidencing the then amount on deposit with the defendant bank; that each of said certificates contained the stipulations "payable to the order of himself (in gold same as deposited) or to Dora Smith, on return of this certificate properly indorsed three months after date, interest at four per cent. if left three months. No interest for fractional part of month." These certificates were signed for the bank by O. F. Cobb, cashier.

Continuing the defendants say in their answer: "These defendants admit that the $2,000.00 was in gold and was in a package and that the same remained in the bank intact. But these defendants allege that when the bank gave an interest bearing certificate therefor that the same was placed upon the books of the bank as a liability of the bank, and that said amount was added to the cash as assets of the bank. These defendants further say that the amount of money represented in the several certificates set out hereinabove was at all times carried in the cash account as assets of the bank and the corresponding amount carried as liability on the books of the bank. They further aver that said money was at all times held in the vault of the bank and admit it was never loaned out or used in the sense of paying obligations or used in any other manner than to add to the amount of cash actually on hand and was counted as such in the reserve that was always held intact. These defendants admit that under the terms of the certificate that the complainant was to have payments in gold same as deposited and as a matter of fact the said gold was...