Schulz v. Bank of Harrisonville

• Decision Date: 08 January 1923
• Docket Number: No. 14531.,14531.
• Citation: 246 S.W. 614
• Parties: SCHULZ v. BANK OF HARRISONVILLE et al.
• Court: Missouri Court of Appeals

246 S.W. 614

SCHULZ v. BANK OF HARRISONVILLE et al.

No. 14531.

Kansas City Court of Appeals. Missouri.

January 8, 1923.

Appeal from Circuit Court, Cass County; C. A. Calvird, Judge.

"Not to be officially published."

Action by Carl A. Schulz against the Bank of Harrisonville and others. Judgment for plaintiff, and defendants appeal. Affirmed.

A. A. Whitsitt and J. S. Brierly, both of Harrisonville, for appellants.

W. D. Summers, of Harrisonville, for respondent.

ARNOLD, J.

This a suit instituted for the purpose of having a deposit made in the Bank of Harrisonville, prior to the failure of that institution, declared a special deposit and a preferred claim.

The Bank of Harrisonville, one of the defendants herein, was a banking institution located at Harrisonville in Cass county, Mo., and was engaged in the general banking business for many years prior to its failure, February 3, 1920. After safe failure, its affairs were taken in charge by the bank commissioner of the state and thereafter, to wit, on June 30, 1920, the State Bank of Harrisonville was organized and took over the assets of its defunct predecessor, and has since been engaged in the banking business in said town.

On July 9, 1919, plaintiff entered into a written contract with C. M. Morris and R. H. Brown for the purchase of 160 acres of land in Cass county, Mo., for the sum of $15,000. The contract was prepared and signed in the office of one Charles Bird, a real estate agent at Harrisonville. At the time of entering into said contract and prior thereto, plaintiff was a depositor in said Bank of Harrisonville. Immediately after the execution of the contract, plaintiff, in company with one Harry Bird, son and partner of Charles Bird, aforesaid, went to the Bank of Harrisonville and placed in the hands of an official thereof, an envelope containing said contract, to which was pinned a draft on the First National Bank of Kansas City, Mo., for $1,500, being the down payment on the purchase price of the land, said draft being indorsed by plaintiff in blank, as contended by plaintiff, and indorsed payable to the Bank of Harrisonville, as claimed by defendants. The draft, when introduced in evidence, bore the following indorsement on the back thereof: "Pay to the order of Bank of Harrisonville. C. A. Schulz."

The testimony of plaintiff tends to show that the draft, indorsed in blank, was handed to the officer of the bank receiving it; that it was pinned to the contract of sale and both contained in an envelope, on the outside of which was written the word "escrow"; that plaintiff told the cashier, D. 3. Barnett, that the papers in the envelope were to be kept by the bank until the deal for the land had been consummated in accordance with the contract. The contract, which was introduced in evidence, provided:

" 0 Fifteen hundred dollars of said purchase price being now deposited in the Bank of Harrisonville, Mo., to be paid to said first party when said first party furnishes said second party a good and sufficient abstract showing a good merchantable title to said real estate and the same to be examined and accepted by said second party or his attorney."

The said contract further provided:

"The property herein described is sold by Charles Bird, real estate agent, of Harrisonville, Mo., to whom a commission of $375 is due from said first party, which said first party hereby agrees to pay, and the above-named bank is hereby authorized to pay the same to said Charles Bird out of any money held by them in this deal, unless said second party forfeits the money paid on said property, deposited in the above-named bank, in which event the said Charles Bird or his assigns shall receive one-third of such forfeit money for services rendered and expenses incurred in such contract sale."

The testimony further tends to show that after the envelope containing the said contract and draft had been placed in the hands of the cashier aforesaid, that officer made out a deposit slip in duplicate, as follows:

"Deposited in the Bank of Harrisonville by C. M. Morris and R. H. Brown—C. A. Schulz.

"Harrisonville, Mo., July 9, 1917. "Escrow, $1,500.00. Duplicate. D. B. B."

The proceeds of said draft were mingled with the general funds of the bank, the draft was detached from the contract to which it had been pinned, the duplicate deposit slip was substituted therefor, and the same held in the bank.

There was some delay in closing the deal for the sale of the land, and, before the matter was consummated, the Bank of Harrisonville failed. Plaintiff, in order to carry out his part of the contract, paid from his funds the sum of $1,500, in lieu of the amount held in the bank of Harrisonville as aforesaid, and the deal for the land was closed. Plaintiff accepted an assignment from C. M. Morris and R. H. Brown of all their interest in said deposit. Demand for payment was made by plaintiff, but the same was refused, and this action followed in due course.

The petition and other pleadings are formal, each in its way setting up the grounds upon which each side depends for its case. The cause was tried to the court sitting as a jury, on February 1, 1922. The judgment was in favor of plaintiff, declaring the said deposit special, and decreeing that "out of the funds turned over by said insolvent Bank of Harrisonville, to said State Bank of Harrisonville and W. 0. Hill, trustee, the said plaintiff is entitled to be paid the sum of $1,500 and 6 per cent. interest thereon from the date of this suit, to wit, the aggregate sum of $1,560," and that plaintiff is entitled to a preference therefor over all general debts and obligations of said Bank of Harrisonville. The court further found in favor of defendant J. G. Hughes, commissioner of finance.

Motions for new trial and in arrest were duly filed on behalf of the defendants Bank of Harrisonville and State Bank of Harrisonville, but were overruled by the court, and said defendants appeal.

Appellants contend that the $1,500 deposit made in this case was general, while respondent's contention is that it was special. The solution of this question will determine this appeal.

[1] The rule generally accepted is that where money is deposited in a bank as a general deposit, the title passes to the bank, whereas in case of a special deposit the bank merely takes charge and custody of the money, without any authority to...