Packer v. Crary

• Decision Date: 17 October 1903
• Citation: 96 N.W. 870,121 Iowa 388
• Parties: ALLAN PACKER, AND H. J. BENSON v. A. T. CRARY, THE MARSHALLTOWN STATE BANK, Garnishee, AND GEORGE H. ADAMS, Intervener and Appellant
• Court: Iowa Supreme Court

96 N.W. 870

121 Iowa 388

ALLAN PACKER, AND H. J. BENSON v. A. T. CRARY, THE MARSHALLTOWN STATE BANK, Garnishee, AND GEORGE H. ADAMS, Intervener and Appellant

Supreme Court of Iowa, Des Moines

October 17, 1903

Appeal from Marshall District Court.--HON. OBED CASWELL, Judge.

PLAINTIFFS brought action against defendant Crary, aided by attachment and served notice of garnishment on the Marshalltown State Bank, as a debtor of Crary, holding funds of his on deposit. Judgment was rendered in this action in favor of plaintiffs for $ 520 and costs, and it was agreed that the garnishee had funds of Crary on deposit to the extent of $ 767.90. But before the rendition of judgment against Crary, and before any judgment had been rendered against the bank as garnishee Adams intervened, claiming a right to the fund in the bank by assignment from one Hall, alleged to be the equitable owner of such fund. Issue was taken on the petition of intervention, and such issue was tried as in equity, with the result that the court dismissed the petition of intervention. Intervener appeals.

Reversed.

Henry Stone for appellant.

Meeker & Meeker and Binford & Snelling for appellees.

OPINION

McCLAIN, J.

There is no real controversy as to the facts, and, so far as involved in the decision on the petition of intervention, they are substantially as follows: Hall was the owner of certain cattle, purchased to some extent with money of Adams, the intervener, and he was indebted to Adams to an amount largely exceeding the value of the cattle. Hall delivered these cattle to Crary to be fattened and marketed, with the agreement that Crary should account to Hall for the proceeds, after deducting expenses and commissions. Subsequently Hall gave to Adams an order on Crary for such proceeds, and Crary recognized this order, and assured Adams that he would turn the proceeds over to him in pursuance thereof. Crary deposited the proceeds of the cattle--about $ 1,150 --in the bank to his own general account. It is uncertain, under the evidence, whether a portion of the proceeds were checked out by Crary to Hall's benefit, or not, but it is undisputed that Crary is indebted either to Hall or to Adams, by virtue of the order, for an amount exceeding the balance in the bank to Crary's credit as net proceeds of Hall's cattle; and the sole question is whether Crary's creditors, by virtue of the garnishment, have a right to this fund as against the intervener, Adams, claiming under the order on Crary given to him by Hall, and recognized by Crary before the garnishment proceedings were instituted. Although the proceeds of the cattle were deposited by Crary to his own individual account, nevertheless, as Crary was not the owner of the cattle, but merely the agent of Hall for the sale thereof, the proceeds, if they can be reached, belong to Hall, or to Adams under the order given to him by Hall, and not to Crary.

The proceeds of the cattle, in Crary's hands, were in one sense a trust fund; that is, a fund as to which Crary had the apparent legal ownership, but to which Hall had the legal or equitable right. There can be no controversy as to the proposition that, when an agent deposits his principal's funds in a bank in the agent's individual name, the principal has the right to such funds as against the agent or the bank, and it is immaterial that the funds have been mingled with other funds of the agent. As is said by the court in Van Alen v. American Nat. Bank, 52 N.Y. 1 7: "When a trustee deposits trust moneys in his own name in a bank with his individual money, the character of the trust money is not lost, but it remains the property of the cestui que trust. If such money can be traced into the bank, and it remains there, the owner can reclaim it. When deposited, the bank incurred an obligation to repay it, which is not lessened or impaired because it incurred at the same time an obligation to pay other money belonging to the agent individually. If A Sells B's horse for $ 100, and puts it in a box with $ 100 of his own, the $ 100 of B may be claimed by him, although the particular bills constituting...