Sawyers v. Conner

• Decision Date: 30 April 1917
• Docket Number: 19165
• Citation: 114 Miss. 363,75 So. 131
• Court: Mississippi Supreme Court
• Parties: SAWYERS v. CONNER

75 So. 131

114 Miss. 363

SAWYERS v. CONNER

No. 19165

Supreme Court of Mississippi

April 30, 1917

Division B

APPEAL from the chancery court of Adams county, HON. R. W. CUTRER Chancellor.

Suit by Mrs. Mary Sawyer against L. P. Conner, receiver of the First Natchez Bank. From a decree dismissing the petition, the complainant appeals.

Appellant Mrs. Sawyer, a resident of Natchez, Miss., was the owner of a house covered by a policy of fire insurance in the Caledonia Insurance Company. There was damage by fire, the loss was adjusted, and appellant received a check from the insurance company for the sum of five hundred and fifty dollars in settlement of the loss. She awarded a contract to one McClutchie for the said sum of five hundred and fifty dollars to repair the house. The check from the insurance company was received before the contractor had completed his contract to restore the building. Mrs. Sawyer has an adult daughter, Miss Margaret H. Sawyer, who carried the check of the insurance company to the First Natchez Bank and explained to the assistant cashier that her mother desired the check to be collected and the proceeds placed in the bank for the special purpose of paying Mr. McClutchie, the contractor. At that time, Mrs. Sawyer had an account in the savings department of the First Natchez Bank and a credit to her savings account of about one hundred and thirty-five dollars. Miss Margaret Sawyer also had two accounts at the bank, one a checking account and the other a savings account. When she presented the check to the officer of the institution, something was said about whether the proceeds of the check should be credited on her mothers passbook or upon either of Miss Sawyer's accounts, and, in response to this inquiry from the bank officer, Miss Sawyer declined to permit any entry of the check to be made either upon her mother's savings account or upon Miss Sawyer's account. Thereupon the officer of the bank executed upon a blank form the following receipt:

"First Natchez Bank, Natchez, Miss., Oct. 11, 1913. Mr. E. Sawyer Yours received. We credit your account: Sp. Dept. $ 550.00. All items credited subject to payment. Respectfully, G. S Pintard, Cashier. (For the collection of all items payable outside of this city, the First Natchez Bank will observe due diligence in its endeavor to select responsible agents, but will not be liable in case of their failure or negligence, or for loss of items in the mail.)"

The greater portion of the language of this receipt appears in printed form, but the words "Sp. Dept." were written, and the undisputed testimony shows that this was written for "special deposit." The deposit as shown by the receipt was made October 11th, and the bank failed October 29th thereafter. On the day the bank failed, Miss Margaret Sawyer went to the bank and made a deposit of fifteen dollars on her mother's savings account and had the same entered upon the passbook. The testimony shows that at that time she again called the bank's attention to the fact that Mr. McClutchie, the contractor, would complete his job in a few days, when she would come around and withdraw the deposit for the purpose of paying him. Her testimony is to the effect that the assistant cashier again assented to this special arrangement, and that neither she nor her mother knew that the bank was insolvent. It is shown that, at the time the deposit was made, the bank was hopelessly insolvent and that the officers of the bank had knowledge of this fact. The check from the insurance company was forwarded to the Seaboard National Bank of New York for collection, it being then one of the correspondents of the First Natchez Bank, and the proceeds of the check were credited to the account of the First Natchez Bank on the books of the Seaboard National Bank. When the First Natchez Bank closed its doors, there was a balance to its credit in the Seaboard National Bank of four thousand five hundred and twenty-one dollars and thirty-nine cents, which amount was collected by the receiver. After the receiver was appointed, notice was given to all creditors to appear and probate their accounts, and Mrs. Sawyer probated her account, not only for the $ 550 special deposit, but for the balance due her in the savings department, and at the time this controversy was tried to the chancellor she had received a ten percent. dividend, paid to all depositors whose accounts had been duly probated. She presented an ancillary petition to the court seeking a preference for the said sum of five hundred and fifty dollars upon the ground that it was a special deposit and also upon the further ground that it was fraudulently obtained from her by the officer of the bank with full knowledge of the bank's insolvency. The petition was answered, evidence both for petitioner and the receiver introduced, and a decree was entered by the chancellor dismissing the petition and declining to award appellant a preference. From this decree she prosecutes this appeal.

Reversed and remanded.

Truly & Truly, for appellant.

The contention is made that a special deposit can only be where some particular article, as, for instance, a bond, a roll of money, or specific pieces of valuable property are deposited simply for safe keeping, the identical deposit or article to be returned to the depositor. Undoubtedly such deposits are special as contradistinguished from general, because by making a deposit of a specific article which is ultimately to be specifically returned, the relationship of bailor and bailee is established. But this relationship is established by operation of law. There is, however, another equally as well established class of special deposits which arise by agreement or contract. As was pointed out in the original brief for appellant, strongly supported by authorities, special deposits arise by contract, which contracts are to be construed as others simply to ascertain the intention of the parties contracting. Fogg v. Tyler, 82 A. 1008.

Counsel for appellee further contends that the deposit made by appellant was not a special deposit, because it was not intended or contemplated that the identical check was to be returned, but that the proceeds were to be returned. To show that this position is unsound we refer again to the Carr case in which the check was deposited with the distinct understanding that its proceeds were to be collected and the proceeds were to constitute the special deposit. We also show to the court that in the case of Carlson v. Kies, 134 P. 808, 47 L. R. A. (N. S.) 317, the receipt evidencing the special deposit itself specifically provided that the identical money which formed the subject of the special deposit was not to be returned, but, in the language of the receipt itself, after certain papers had been received, "then same to be forwarded by bank draft." In that case a sum of money was deposited as a special deposit, but the identical currency was never intended to be returned, but the amount of the deposit was to be paid out, or, as shown by the receipt, "to be forwarded by bank draft." In that case the supreme court held that the depositor was entitled to recover his deposit notwithstanding the fact that the deposit had been made under an agreement which did not contemplate the return of the identical money, but specifically provided a method of disbursement, and notwithstanding the further fact that the money itself had been commingled with the general funds of the bank. The opinion in that case not only supports the contention of appellant, but deals elaborately with the rights of depositors making special deposits, or deposits for special purposes. In truth we respectfully submit that it is now the recognized rule that an agreement that a deposit shall be a special deposit cannot be defeated by either the fraudulent misappropriation of the proceeds of the deposit, or by a commingling of them with the funds of the bank. Shopert v. Indiana National Bank, 83 N.E. 515; Wagner v. Citizens Bank & Trust Company, 122 S.W. 245; Continental & Commercial Savings Bank v. Chicago Title & Trust Company, 199 F. 704; v. Chicago Title & Trust Company, 199 F. 704; Exhbach v. Byers, 164 Ill.App. 449. A general deposit may, by agreement, be converted into a special deposit. State v. Grills, 83 A. 281.

We submit that the rule here announced is clearly applicable to the case at bar, falling within the announcement of Fogg v. Tyler, that a special deposit is not required to be in any particular form being simply a matter of intention and understanding between the parties. Bottcher v. Colorado National Bank, 24 P. 582.

We hope, at least, that the officer of the bank received this deposit as a special deposit because of his knowledge that by so doing the rights of the widow and orphan would not suffer in the disaster to the bank which he then knew was immediately impending at all events, whatever motive actuated him, the deposit was accepted as a special deposit. The minds of the contracting parties met. The deposit was tendered as a special deposit; was accepted as a special deposit and being a special deposit segregating it from the general funds of the bank. The check was simply to be collected and the proceeds held for a few days as a special deposit for a specific purpose. There was no other way in which the rights of the depositor could be safeguarded. Every requirement of law was fulfilled. We submit, therefore most earnestly that upon either and both of the grounds suggested the appellant is entitled to a decree in this honorable court upholding justice, righting wrong, and granting relief.

L. T. Kennedy, for appellee.

Under the pleadings in this cause appellant cannot recover, unless she establishes that the deposit was a special deposit, but...