Shute v. Hinman

• Decision Date: 06 November 1899
• Citation: 58 P. 882,34 Or. 578
• Parties: SHUTE v. HINMAN.
• Court: Oregon Supreme Court

58 P. 882

34 Or. 578

SHUTE v. HINMAN.

Supreme Court of Oregon

November 6, 1899

On rehearing. Affirmed.

For former opinion, see 56 P. 412.

S.B. Huston, for appellant.

Thos H. Tongue, for respondent.

MOORE, J.

A rehearing having been granted in this cause, it is insisted that, inasmuch as the testimony conclusively shows that Pfanner placed the $879.84 belonging to the Manning estate in his bank, and thereafter, until the assignment, retained more than that amount therein, it was error in the former opinion in speaking of the money which was sought to be impressed with a preference, to say that "none of it has been traced or followed into the mass sought to be charged with the lien." Pfanner, as a witness, says, in substance that when appointed administrator he was a broker, and kept the funds of the estate in his safe, but when he went into the banking business they were placed in his bank, and that most of his collections as administrator were made after he engaged in the latter business. In speaking of the manner in which the money of the estate was deposited, he says "It was placed with the bank's money, the same as any other money." If Pfanner had continued in the business of a broker, and kept the funds of the estate in his safe, but commingled with his own, it is quite probable that if, at the time of the assignment, the money therein was sufficient to satisfy the demands of his trust, a court of equity, upon proper application, would have enforced a lien thereon in favor of the cestui que trust. So, too, as intimated in the former opinion, if, after having mixed the money of the estate with his own, Pfanner had made a general deposit thereof in a bank, where it remained at the time of the assignment, a court of equity would undoubtedly have impressed the money with a lien in favor of the estate. Overseers of Poor of Norfolk v. Bank of Virginia, 2 Grat. 544; Stair v. Bank, 55 Pa.St. 364; Van Alen v. Bank, 52 N.Y. 1; Central Nat. Bank v Connecticut Mut. Life Ins. Co., 104 U.S. 54. This rule is founded upon the principle that, if a trustee mingles with his own money the funds of his cestui que trust, the whole will be regarded as belonging to the latter, except so far as the trustee may be able to distinguish his own. Hart v Ten Eyck, 2 Johns. Ch. 62, 108. It has been held, by invoking the presumption that the ordinary course of business has been followed (Hill's Ann.Laws Or. § 776, subd. 20), that, in the absence of evidence to the contrary, a deposit of money in a bank will be regarded as a general deposit ( Alston v. State, 92 Ala. 124, 9 So. 732). However, there exists no necessity, in the case at bar, for invoking this presumption, for the testimony conclusively shows that Pfanner made a general deposit of the money of the estate in the bank. This created the relation of creditor and debtor between him and the bank, thereby giving it the right to mingle the money so deposited with its own funds. Morse, Banks, § 289; Cadwell v. King (Iowa) 50 N.W. 975; Catlin v. Bank, 7 Conn. 487; Coffin v. Anderson, 4 Blackf. 395; Horwitz v. Ellinger, 31 Md. 492; Carman v. Bank, 61 Md. 467; Marine Bank v. Fulton Bank, 2 Wall. 252; Thompson v. Riggs, 5 Wall. 663; Bank v. Millard, 10 Wall. 152. Although the bank may have retained in its vaults at all times a sum greater than the trust funds, a general deposit thereof was technically a use of such funds in its business. Trust Co. v. Kittson, 62 Minn. 408, 65 N.W. 74. In Otis v. Gross, 96 Ill. 612, a clerk of a court, having made a general deposit of trust funds in a bank, which became insolvent, sought to impress the money of the bank in the hands of a receiver with a preferential lien, but the relief was denied, the court holding that he must share pro rata with the other creditors of the bank. In Wetherell v. O'Brien, 140 Ill. 146, 29 N.E. 904, an executor made a general...