Murray v. North Liberty Savings Bank

• Decision Date: 23 October 1923
• Docket Number: 35585
• Citation: Murray v. North Liberty Savings Bank, 196 Iowa 729, 195 N.W. 354 (Iowa 1923)
• Parties: W. J. MURRAY, Superintendent of Banking, Appellee, v. NORTH LIBERTY SAVINGS BANK et al., Appellants. CLAIM OF FIRST NATIONAL BANK OF NORWAY
• Court: Iowa Supreme Court

195 N.W. 354

196 Iowa 729

W. J. MURRAY, Superintendent of Banking, Appellee, v. NORTH LIBERTY SAVINGS BANK et al., Appellants. CLAIM OF FIRST NATIONAL BANK OF NORWAY

No. 35585

Supreme Court of Iowa, Des Moines

October 23, 1923

Appeal from Johnson District Court.--RALPH OTTO, Judge.

APPEAL from an order by the court allowing the claim of the First National Bank of Norway, Iowa, against the receiver of the North Liberty Savings Bank as a preferred claim.The facts are stated in the opinion.

Affirmed.

Wilson & Evans, for appellants.

Dutcher & McClain, for appellee.

STEVENSJ. PRESTON, C. J., WEAVER and DE GRAFF, JJ., concur.

OPINION

STEVENS, J.

The North Liberty Savings Bank of North Liberty, Iowa, was closed on August 20, 1921, by order of the state banking department and on August 31st, H. D. Evans was appointed receiver, upon the application of W. J. Murray, superintendent of banking, for the purpose of preserving its assets and winding up its affairs.Notes of the savings bank were frequently discounted to the First National Bank of Norway, Iowa.It was the custom for the national bank, either upon its own motion or at the request of the savings bank, to forward the discounted notes to the latter for collection and remittance.Remittance was generally made by draft or cashier's check, but occasionally it was made by a certificate of deposit, which, according to the testimony of the cashier of the receiving bank, was forwarded to its correspondent for collection and deposit, the same as drafts or cashier's checks.One of the notes so held by the national bank was for $ 2,000, signed by A. W. Kadera.This note was forwarded by the cashier of the national bank to the savings bank some time prior to February 11, 1921, on which date it was paid by Kadera.On the same day, the cashier of the savings bank issued a certificate of deposit for $ 2,014.66, the amount of the note payable to the national bank, due in six months, with interest at 4 1/2 per cent.This certificate of deposit he placed in the files of the bank, where it remained until some time after August 10, 1921, when the affairs of the bank were examined by a representative of the state banking department.The national bank in due time filed a claim with the receiver for the amount of the note, and asked that it be established and ordered paid as a preferred claim.A trial in the court below resulted in the entry of an order by the court, as prayed.From this order, the receiver appeals.

The bank claims a right to have its claim established and paid as a preferred claim, upon the theory that the relation between the two banks, so far as this transaction is concerned, was that of principal and agent, and that, immediately upon the payment of the note to the savings bank, as agent, a trust arose in favor of the national bank, as principal, for the amount of the note.If nothing more appeared in the record, this would undoubtedly be true.Jones v. Chesebrough, 105 Iowa 303, 75 N.W. 97;Bradley v. Chesebrough, 111 Iowa 126, 82

N.W. 472;Hanson v. Roush, 139 Iowa 58, 116 N.W. 1061;Page County v. Rose, 130 Iowa 296, 106 N.W. 744;Messenger v. Carroll Tr. & Sav. Bank, 193 Iowa 608, 187 N.W. 545.

This controversy does not, however, end with the admission of the matters stated.The receiver claims that it was the custom of the savings bank to issue certificates of deposit to the national bank for sums collected by the savings bank upon notes sent to it by the national bank for collection, and of the national bank to permit the same to remain on deposit therein until required by it, and that, because of this custom, the simple relation of debtor and creditor was created, out of which no trust arose.

The further contention is made by appellant that the certificate of deposit issued by the savings bank was delivered to the president or vice president of the national bank, some time between the 10th and 20th of August, 1921, and retained by the bank as such, and that thereby the deposit of the proceeds of the note in the savings bank and the issuance of a certificate of deposit therefor were fully ratified and confirmed by appellee, and that it is now estopped from claiming that the money was held by the bank in trust and from having a preference established.Appellant also contends that the money paid to the bank by Kadera was dissipated and lost long before August 31st, and that no part of it ever came into the hands of the receiver, to augment or increase the assets of the bank.We will dispose of these contentions of appellant's in the order stated.

I.It is conceded by appellee that, if the certificate of deposit was issued by the savings bank upon the authority and with the knowledge of the officers of appellee, the relation between the two banks became that of creditor and debtor, and not that of trustee and cestui que trust.The evidence does not establish a custom of dealing between the banks from which the inference could properly be drawn that the savings bank was authorized to issue the certificate of deposit and to retain the same in its own possession, or that such was the general method of doing business between them.On the contrary, under the facts shown, it was the duty of the savings bank to promptly remit the proceeds of the note to appellee.It appears that certificates of deposit were issued by the savings bank in a few instances, but they were forwarded to appellee, where they were treated the same as drafts or cashier's checks, except that, by special arrangement upon a few occasions, the money was left on deposit for a time in the savings bank.

The contention that appellee subsequently accepted the certificate and ratified the deposit evidenced thereby presents a more difficult question.All parties concede that the certificate...