State Nat. Bank v. Reilly

• Decision Date: 09 November 1887
• Citation: 124 Ill. 464,14 N.E. 657
• Parties: STATE NAT. BANK v. REILLY.
• Court: Illinois Supreme Court

124 Ill. 464

14 N.E. 657

STATE NAT. BANK

v.REILLY.

Supreme Court of Illinois.

November 9, 1887.

Appeal from appellate court, Third district.

SHOPE and MAGRUDER, JJ., dissenting.

Greene & Humphrey, for appellant.

Patton & Hamilton, for appellee.

SCOTT, J.

This suit was brought by James Reilly against the State National Bank on a dividend-warrant, or check, drawn by the clerk of the district court of the United States for the Southern district of Illinois, on a fund deposited to the credit of that court, by the present clerk and his predecessor, with the defendant bank, for the sum of $221.17. The check is countersigned by the judge of that court, and is an absolute order to pay that sum of money to plaintiff. It is in the usual form of a bank check, drawn upon the general fund of the drawer, withoutspecifying any particular fund out of which it is payable, and differs from such check only in the fact it has, on the face of it, some marginal memoranda, and also some in the body of the check, to both of which reference will be made further on. The facts out of which this litigation arises appear either from the stipulation of the parties, or are so fully proven, that no controversy exists as to them. At the trial, defendant submitted several propositions to be held as law applicable to the case, which the court refused; and that ruling of the court is assigned for error. As the first of the series of propositions submitted, if correct, is conclusive of the whole cause, it will not be necessary to notice or comment on the others. It is ‘that the law is, upon the facts in evidence, that the plaintiff is not entitled to recover.’ Section 995, Rev. St. U. S., provides: ‘All moneys paid into any court of the United states, or received by the officers thereof, in any cause pending or adjudicated in such court, shall be forthwith deposited with the treasurer, and assistant or a designated depositary of the United States, in the name and to the credit of such court.’ Conforming to this act of congress, what is called ‘Rule 28 in Bankruptcy’ provides, among other things, that ‘the district court, in each district, shall designate certain national banks, if there are any within the judicial district, or, if there are none, then some other safe depository, in which all moneys received by assignees, or paid into court, in the course of any proceedings in bankruptcy, shall be deposited; and every assignee, and the clerk of said court, shall deposit all sums received by them severally, on account of any bankrupt's estate, in one designated depository, and every clerk shall make a report to the court of the funds received by him, and of deposits made by him, on the first Monday of every month. The rule makes it the duty of assignees to make certain reports to registers in bankruptcy, and defines the duty of such registers, and then further declares. ‘No money so deposited shall be drawn from such depository unless upon a check, or warrant, signed by the clerk of the court, or by an assignee, and countersigned by the judge of the court, or one of the registers designated for that purpose, stating the date, the sum, and the account for which it is drawn.’

There is no doubt it was in compliance with the act of congress cited, and the rule in bankruptcy on the same subject, that about the first of March, 1873, the defendant bank was designated a depository for the ‘United States District Court for the Southern District of Illinois.’ Shortly thereafter George P. Bowen, since deceased, then clerk of such court, made the first deposit of funds belonging to the registry of the court with the defendant bank, and the bank then, by his direction, opened an account with the ‘United States District Court for the Southern District of Illinois,’ and entered such deposit to the credit of that court. The clerk continued to make deposits of funds belonging to the registry of the court with the bank up to the time of his death, which occurred in February, 1880, and the bank continued to enter such deposits to the credit of the court, in the manner directed by the clerk making the same. At first, each deposit so made by the clerk was, by the bank, entered on its books, and in the deposit-book of the clerk to the credit of the particular case, (naming the case,) with the number to which the funds so deposited belonged; that afterwards, by direction of the clerk, all deposits so made were entered by the bank in the name of ‘The United States District Court for the Southern District of Illinois,’ dropping the name but retaining the number of the case; as, for example, ‘1876. January 21st, to Dep. 1637, $5,200.’ It is admitted the bank understood, when these entries were made, the number on either side of the account referred to the case in which the deposit, in the first place, was made, and on which the check, in the second place, was drawn. The evidence shows, and indeed the admission goes that far, that the bank always treated the account as an entirety, and paid out of it all checks drawn by the clerk and countersigned by the judge, until the deposits were exhausted. This mode of keeping the account, and making payments out of it, seems to have been acquiesced in by the court, and its principal officer,-the clerk under whose directions the deposits were made,-for it is admitted that between the time of the first deposit in March, 1873, and the death of Bowen, in 1880, the bank balanced the account with the court nine different times; returning all checks to the clerk at each balancing, and entering the case-number and amount of each check so returned in the depositor's book. That is the usual course when a depositor draws on his funds in bank as an entirety; and had this not been in conformity with the act of congress, and rule 28 in bankruptcy, on the same subject, it is hardly probable the court would have permitted its account to be kept in that way, and payments to be made out of it, as was done through so many years, without interposing some objections or requiring it to be kept otherwise. It does not appear any objection was ever made to that mode of treating the account, and it seems but reasonable to conclude it was satisfactory to the court. The check in suit was given to plaintiff for a dividend due him from the bankrupt estate of H. Sandford & Co. The case was numbered 2,105. Prior to his death, Bowen had made large deposits with defendant of funds derived from that estate, and, after his death, his successor in office made quite large deposits of funds received from the same estate in precisely the same way Bowen had been accustomed to do. It appears that of the funds deposited as having been received in case No. 2, 105, after deducting all checks drawn for dividends in that particular case, including the check in suit, there would remain a considerable balance to the credit of that case, if the same had not previously been paid out on the check drawn by the clerk, and countersigned by the judge, of the court. The difficulty arises out of the admitted fact that the former clerk failed to deposit all the funds that came to his hands belonging to the registry of the court. Had he done so, there would, of course, have been enough in the bank with which to pay all checks drawn upon the funds of the court. Payment of the check in suit was refused because the bank, prior to its date, which is May 12, 1881, had actually paid out on checks similar to this one, signed by the clerk and countersigned by the judge, and differing as to the number of the case, names dates, and amounts, all funds ever deposited with it to the credit of the court, either by Bowen or his successor in office.

The principle upon which plaintiff seeks to recover is...