Rushing v. Alabama Nat. Bank

• Decision Date: 18 May 1933
• Docket Number: 3 Div. 49.
• Citation: 148 So. 306,226 Ala. 621
• Parties: RUSHING v. ALABAMA NAT. BANK.
• Court: Alabama Supreme Court

148 So. 306

226 Ala. 621

RUSHING v. ALABAMA NAT. BANK.

3 Div. 49.

Supreme Court of Alabama

May 18, 1933

Appeal from Circuit Court, Montgomery County; Leon McCord, Judge.

Action in detinue by O. F. Rushing, as Treasurer of Public School Funds of Autauga County, against the Alabama National Bank. From a judgment for defendant, plaintiff appeals.

Affirmed.

Hill Hill, Whiting, Thomas & Rives, of Montgomery, for appellant.

Steiner Crum & Weil and Sam Rice Baker, all of Montgomery, for appellee.

BOULDIN Justice.

O. F Rushing, as treasurer of public school funds of Autauga county, sues in detinue to recover certain state warrants in the possession of defendant Alabama National Bank, of Montgomery. These warrants, three in number, aggregating $1,973.01, were issued in January and February, 1931, payable to Alva K. Cooper, treasurer, etc., the predecessor in office of this plaintiff. The legality of these warrants, drawn on the state treasurer, is admitted.

The issue is one of title.

The cause was tried on an agreed statement of facts. We summarize the controlling facts as follows: Mr. Cooper was duly appointed treasurer of public school funds by the county board of education.

The First National Bank of Prattville, Ala., having deposited certain securities as a guaranty of the safety of the deposit of public school funds, was duly designated depository of such funds by the county board of education, and thereafter the county board of education, through its treasurer, carried its account as a general depositor in said bank, the said Cooper, as treasurer, depositing all warrants and funds to such account and drawing against same as required.

As the warrants in question were received from the state auditor, payable to the "order of A. K. Cooper, Treasurer," they were severally deposited by him in the Prattville Bank, the designated depository, indorsed "A. K. Cooper, Treasurer." He received the usual deposit slips, but with a verbal agreement with the bank, through its vice president, who received each of them, that such deposit should not be drawn upon until the warrant was paid.

The Prattville Bank thereupon indorsed each warrant: "Pay to the order of any bank, banker or trust company. All prior endorsements guaranteed. [Signed] First National Bank of Prattville, Mrs. R. M. McCord."

With these indorsements, one dated January 23, and two February 16, 1931, the Prattville Bank forwarded the warrants by usual course of mail to Alabama National Bank as cash items to be credited to the account of the Prattville Bank. They were so credited, and the amount of such warrants was immediately drawn out of the Alabama National Bank by the Prattville Bank. Mr. Cooper, treasurer, was never informed of this fact, nor given the right to check on such deposits, and, after repeated demand, never received any of the proceeds of said warrants.

The state treasurer, being short of available funds, failed to pay the warrants on presentation by Alabama National Bank, and thereupon, in order to further secure its indorsement of such warrants, the Prattville Bank executed its note to Alabama National for the amount thereof, pledging the warrants as collateral security, and they are still so held.

The Prattville Bank failed in May, 1931. The Alabama National Bank had no knowledge of the verbal agreement above noted; and knew nothing of the transactions between the Prattville Bank and Mr. Cooper, treasurer, except as shown by the warrants and indorsements thereon and another instrument now to be mentioned.

When the Prattville Bank entered into the agreement with the county board of education to become depository of public school funds,...