State ex rel. Spillman v. Nebraska State Bank of Harvard
| Decision Date | 17 June 1929 |
| Docket Number | 26863 |
| Citation | 225 N.W. 778,118 Neb. 660 |
| Parties | STATE, EX REL. O. S. SPILLMAN, ATTORNEY GENERAL, v. NEBRASKA STATE BANK OF HARVARD: VAN E. PETERSON, RECEIVER, APPELLANT: J. H. YOST LUMBER COMPANY, INTERVENER, APPELLEE: SECURITY STATE BANK OF LAWRENCE, INTERVENER, CROSS-APPELLANT |
| Court | Nebraska Supreme Court |
APPEAL from the district court for Clay county: J. W. JAMES, JUDGE. Affirmed.
AFFIRMED.
Syllabus by the Court.
An arrangement between a state bank and its correspondent bank whereby checks upon the former are paid at par by the latter is not such a consideration of value or rendering of a service to a depositor in the state bank as will deprive the deposit of the protection of the depositors' guaranty fund, although, as an incidental result of the transactions thereunder, the depositor may receive the benefit of interest on the float of such checks in addition to the rate allowed by law upon the deposit, where there was no corrupt intention by either party to circumvent the banking law regarding the rate of interest on deposits.
The record in this case fails to show any excess interest paid or credited on the deposit.
Deposits in a bank, subject to check and made in the ordinary course of business by a corporation, will not be held loans to the bank merely because the depositor knew that the bank was in need of funds, where there was no agreement that the deposit should be made or remain in the bank for the purpose of bolstering up its reserve or other unlawful purpose.
The fact that the president and principal stockholder of a corporation is also a stockholder (though not a director) in the bank will not of itself constitute the making of deposits by the corporation in the ordinary course of business an obtaining of money for the purpose of effecting a loan to the bank.
Interest on daily balances, lawfully contracted for by a depositor in a bank, may be within the protection of the depositors' guaranty fund.
Interest accruing upon a bank deposit is a mere incident to the principal sum and a part of it, within the meaning of the bank guaranty act.
A valid police regulation providing for the safety of bank deposits includes interest thereon lawfully contracted for.
A claim against a failed state bank allowed against the depositors' guaranty fund draws interest after date of allowance at 7 per cent. per annum.
Appeal from District Court, Clay County; James, Judge.
Proceedings by the State, on the relation of O. S. Spillman, Attorney General, against the Nebraska State Bank of Harvard, wherein the J. H. Yost Lumber Company and the Security State Bank of Lawrence intervened to secure the allowance of claims. From the judgment therein, Van E. Peterson, receiver, appeals and intervener last named cross-appeals. Affirmed.
Butler & James and C. M. Skiles, for appellant.
Stiner & Boslaugh, for J. H. Yost Lumber Company.
Perry, Van Pelt & Martin, for Security State Bank.
Heard before DEAN, GOOD, THOMPSON, EBERLY and DAY, JJ., and LIGHTNER and REDICK, District Judges.
Appeal by the receiver and cross-appeal by Security State Bank of Lawrence from an allowance of a claim in favor of the J. H. Yost Lumber Company against the depositors' guaranty fund in the receivership proceedings of Nebraska State Bank of Harvard. The claim was scheduled by the receiver as one not payable out of the fund, whereupon claimant filed his petition in the district court. Answers were filed by the receiver and the Security State Bank of Lawrence, intervener. The issues will appear from the discussion in the opinion. By the judgment of the district court the claim was allowed against the fund in the sum of $ 19,185.43, with interest at 7 per cent. per annum from the date of the judgment.
From the pleadings and evidence the following situation appears. On or about May 1, 1926, the Union State Bank of Harvard was in the hands of a receiver for the purpose of liquidation, and a proposal was made by the Nebraska State Bank of Harvard to take over the assets and assume certain of the liabilities of the Union State Bank. This proposal was approved by the receiver and the court, and resulted in a contract to that effect on May 10, 1926, and the Nebraska State Bank continued in business until May 4, 1927, when it was taken over by the guaranty fund commission, and on May 9, 1927, a receiver appointed to wind up its affairs.
At the time of the purchase by the Nebraska State Bank, the claimant, J. H. Yost Lumber Company, was a depositor in the Union State Bank, having to its credit, subject to check, the sum of $ 15,595.41, which was one of the deposits assumed by the purchasing bank. At the time of the closing of the Nebraska State Bank, claimant had on deposit the sum of $ 19,185.43, subject to check.
Claimant had an agreement with the Union State Bank that it would pay 4 per cent. interest on daily balances, and this arrangement was continued with the Nebraska State Bank. This was the highest rate of interest permitted by the statutes of this state to be paid by state banks.
There was an arrangement between the Nebraska State Bank of Harvard and the Omaha National Bank of Omaha, its correspondent, whereby checks drawn by its customers upon the Nebraska State Bank would be paid by the Omaha bank without any charge for exchange, and charged to the account of the Nebraska State Bank; and the Nebraska State Bank furnished claimant with a stamp to be imprinted upon its checks containing the following words: "Payable, if desired, at par through Omaha National Bank, Omaha, Nebraska." It does not appear whether or not these stamps were furnished to other customers. A number of objections, of a novel and interesting character, are presented by the receiver and intervener to the allowance of the claim against the depositors' guaranty fund, and we will now consider them in the order in which they are presented by the brief of appellant.
1. It is urged that the arrangement by which claimant's checks were to be paid at par by the Omaha National Bank resulted in the payment of interest in excess of 4 per cent. allowed by law; or, that thereby the bank gave a consideration or rendered a service to the depositor as an inducement, in addition to the legal interest, for making or retaining a deposit in the bank, and had the result to withdraw the deposit from the protection of the guaranty fund. The law under which this claim is made is section 1, ch. 28, Laws 1925, which, as far as applicable, reads as follows:
And the act provides for a fine or imprisonment in the penitentiary. Also, "Deposits made in violation of this section shall not be entitled to priority of payment from the assets of the bank, nor be protected by the guaranty fund. "
It is not claimed that this arrangement was entered into between claimant and the bank with the unlawful purpose to increase the rate of interest upon the deposit beyond that permitted by law, but it is argued that such is its effect, the ratiocination being that, when the check is charged to the account of the Nebraska State Bank by the Omaha National Bank, one or more days elapse before it is returned to the Nebraska State Bank, during which period 4 per cent. interest is accruing upon the deposit; or, that the interest allowed the Nebraska State Bank by its correspondent ceases a day or two earlier than it would have done if the check had been sent for collection. In other words, the depositor gets the benefit of interest on the float.
The arrangement for paring checks through the Omaha National Bank was one between the two banks, and, for aught that appears in the record, was available to all depositors of the Harvard bank. Neither the claimant nor its president was a party to the arrangement, and the record fails to show that any checks of the claimant were cashed at par by the Omaha bank. The furnishing of the stamp to claimant was not in consequence of any special contract or arrangement between claimant and the Harvard bank, but it was mailed to claimant by the bank after it had succeeded the Union State Bank. It amounted, so far as the record shows, merely to a notice to plaintiff of an existing arrangement between the two banks of which claimant might have the benefit. It seems altogether probable that it never entered the mind of either party that the accommodation thus granted would result in an allowance of interest on claimant's account slightly in excess of 4 per cent. In fact, it seems that such result, if in fact it existed, was apparent only after the bank had failed and the transaction submitted to the scrutiny of ingenious counsel and officers of the guaranty fund commission. It is suggested by counsel for receiver that the burden of proof is upon the claimant to establish that no specific limitation of the guaranty fund act has been transgressed (State v. Security State Bank, 116 Neb. 223, 216 N.W. 803), and it may be that some of the matters above referred to as not appearing of record might have been brought into it by the claimant; but if the evidence in the record is sufficient to...
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