Stone v. St. Louis Union Trust Company
| Decision Date | 05 May 1914 |
| Parties | WILLIAM J. STONE, Receiver, Respondent, v. ST. LOUIS UNION TRUST COMPANY, Appellant |
| Court | Missouri Court of Appeals |
Appeal from St. Louis City Circuit Court.--Hon. Hugo Muench, Judge.
AFFIRMED.
Judgment affirmed.
Stewart Bryan & Williams for appellant.
(1) The plaintiff has failed to amend his petition to meet the suggestion of this court on the former appeal. Stone v Union Trust Co., 150 Mo.App. 331. (2) The defense that the deposit and account in question bore no interest is sustained under the pleadings and the proof. State ex inf. v Trust Co., 144 Mo. 562. (3) Where plaintiff is required by the terms of a prior contract with defendant to place his deposit with defendant, the placing of such deposit with defendant cannot be consideration for another and different contract. 9 Cyc. 349; Storck v. Mesker, 55 Mo.App. 26. (4) If the court should hold that the rules and regulations of defendant, although not communicated to plaintiff, can be considered as part of the contract, still the court must consider all the rules and regulations of defendant and the uniform interpretation of them and the practice under them by defendant. (5) The entry of debits and credits in the depositors' bank books, striking the balance and then delivering the pass book to the depositor with his canceled checks, constitutes a rendition of account and the retention of the book so balanced by the depositor for an unreasonable time, without objection to the account as rendered, constitutes an account stated; and especially is that true in this case because of the reports made by the plaintiff to the court and the approval of those reports. Burger v. Burger, 34 Mo.App. 153; Lieber v. Fourth National Bank, 137 Mo.App. 158; McKeen v. Bank, 74 Mo.App. 281; Kenneth Investment Co. v. Bank, 96 Mo.App. 125; Perry on Trusts, Sec. 482; 1 Am. & Eng. Ency. of Law (2 Ed.), p. 438. (6) An account stated can only be opened up on account of fraud or mistake. And where a depositor knows he has not, upon the stating of the account by the bank in the pass book, been allowed interest and still retains the pass book without objection for an unreasonable length of time, he will thereafter be precluded from recovering such interest. Quinlan v. Keiser, 66 Mo. 603. (7) The Statute of Limitations applies. (8) The court erred in refusing defendant's declaration of law.
Manton Davis for respondent.
(1) The defendant being a trust company organized under the laws of Missouri, it is compelled to pay interest on checking deposits. R. S. 1909, Sec. 1124; State ex inf. v. Lincoln Trust Co. et al., 144 Mo. 562. (2) Under the evidence, the plaintiff's deposit is a "current account" and it is not an "indemnity account," as defendant contends. Century Dictionary, p. 1405; Words and Phrases, p 1790; Chadwick v. Chadwick, 115 Mo. 586; 16 Am. & Eng. Ency. of Law (2 Ed.), 183; Black's Law Dictionary, p. 614. (3) The writing signed by Stone prior to his qualification as receiver was not a contract obligating him to make deposit of the fund of his trust with the trust company and will not preclude the obligation of the trust company to pay interest on such funds because--Stone at the time was not receiver and could make no contract as such; the writing furnished a motive to make the deposit, but it lacked every essential element of a contract obligation so to do, viz., competent parties, definite terms, lawful object, lawful consideration. State ex inf. v. Lincoln Trust Co., 144 Mo. 562; Shadewald v. White, 77 N.W. 42; In re Eby's Estate, 164 Pa. 249; Bick v. Reese, 52 Hun, 125; Estate of John J. Clark, 10 Pa.Super. 423; Jenkins v. Schaffer, 6 Dem. Sur. (N. Y.) 59; In re Wilson's Estate, 18 W. N. C. 483; In re Pickering's Estate, 4 Pa. Dist. R. 263. (4) The plaintiff does not seek to surcharge or falsify an account stated. He denies its existence for the reasons following: The theory of an account stated is that mutual accounts have existed between parties; that they have examined their accounts and have agreed upon a balance due between them, which balance, the debtor on accounting, has expressly or impliedly agreed to pay. Newberger v. Friede, 23 Mo.App. 634; Cape Girardeau v. Kimmal, 58 Mo. 85. If the person who is alleged to have made the account stated has no authority to do so, no account stated can arise from his actions. Railroad v. Commission Co., 71 Mo.App. 299; Kenneth Inv. Co. v. Bank, 96 Mo.App. 125. Lack of authority is properly raised under a general denial. It is a denial of an essential element of the contract or action. Cunningham v. Roush, 157 Mo. 336; Boulton v. Railroad, 172 Mo. 92. This Receiver had no authority to consent to an account stated except by direction of the court or its subsequent ratification of his act. (5) When a receiver is appointed for property by a court of chancery, the property is in the custody of the court. Rumsey v. Railroad, 91 Mo.App. 202; Neun v. Bldg. & Loan Co., 149 Mo. 74; Colburn v. Yantis, 176 Mo. 670; Smith v. Railroad, 151 Mo. 301. The receiver is the court's arm merely and is possessed of very limited powers. Chicago Deposit Vault Co. v. McNulta, 153 U.S. 555; Lehigh v. Railroad, 35 N.J.E. 426; Hand v. Savannah, 17 S.C. 219; Tripp v. Boardman, 49 Ia. 410; Peoria Steam Marble Works v. Hickey, 110 Ia. 276; Railroad v. Herndon, 33 S.W. 377; Railroad v. Humphreys, 145 U.S. 82. This receiver is an officer appointed in a statutory proceeding brought by statutory authority, and being appointed by authority of the statute, his powers and the powers which the court may grant him, are peculiarly limited. R. S. 1909, Sec. 1081; State v. Bank, 45 Mo. 528; Rozier v. St. Francois County, 34 Mo. 395. Of the limitation of the receiver's powers all must take notice and deal with him at their peril of his limited authority. Lehigh v. Railroad, 35 N.J.E. 426; Tripp v. Boardman, 49 Ia. 410; Chicago Deposit Vault Co. v. McNulta, 153 U.S. 555. This being a winding up receivership, the receiver is the court's custodian and may not lawfully agree to part with the possession of funds in his care without authority from the court. Ricks v. Broyles, 78 Ga. 610; Ficenor v. Bott, 47 S.W. 251. Should we grant that the receiver has deposited his funds with the defendant on this agreement to pay interest, then to make a contract in the nature of an account stated, omitting the interest would be to commute or compromise a demand of the estate, a power which the receiver, without the authority of court, may not exercise. Smith on Receivers, 88; Paxton v. Steele, 86 Va. 311; 5 Thompson on Private Corporations, Sec. 6973. Should it be held that the receiver has been granted implied authority to deposit his fund with the defendant, this would not help the defendant, for then, by reason of the deposit, the defendant becomes pro hac vice an officer of the court and the custodian of its funds and is amenable to the court's orders in the receivership suit. The defendant's relations then, are directly with the court, in whose theoretical custody the funds are. 23 Am. & Eng. Ency. of Law (2 Ed.), 1056; Rapalje on Contempts, Sec. 15; In re Western Fire & Marine Ins. Co., 38 Ill. 289; 17 Ency. Pd. & Pr. (2 Ed.), 773; McCarter v. Finch, 55 N.J.E. 245; Otis v. Gross, 96 Ill. 612; 5 Thompson on Private Corporations, Sec. 7075. This being true, the defendant's responsibility is to the court and cannot be abridged by any secret agreements unknown to the court. Una. v. Newark Savings Institute, 46 A. 660. The mere fact that the receiver's reports from time to time made mention of the cash balance on hand and of interest collected from other sources (not, however, even disclosing the fact of this deposit) will not furnish any basis to argue that the court ratified any agreement by the receiver by account stated or otherwise, not to collect interest. Chicago Deposit Vault Co. v. McNulta, 153 U.S. 555; Peoria Steam Marble Works v. Hickey, 110 Ia. 276. (6) The doctrine that a receiver may not contract without authority of the court, the appellant may urge would preclude his recovery on the original contract to pay interest. Such is not the case. When one has contracted with a receiver and he is sued on the contract by the receiver, it is well settled that the lack of authority in the receiver is a question which the defendant may not raise. Thompson v. Phoenix Ins. Co., 136 U.S. 287; Corbin v. De La Vergne, 44 N.J.L. 70; O'Gorman v. Sabin, 64 N.W. 84; Smith on Receiverships, p. 87. (7) No part of plaintiff's demand is barred by the Statute of Limitations, because: This action being on an account current, no part of it will be barred unless all the parts of it are. R. S. Mo. 1909, Sec. 1893; Chadwick v. Chadwick, 115 Mo. 581; Boylan v. Victory, 40 Mo. 244; Ring v. Jamison, 66 Mo. 424; Gibson v. Jenkins, 97 Mo.App. 27. This deposit was originally made for the purpose of it remaining an indefinite period of time and until demand by check or sight draft. Under such circumstances the Statute of Limitations will not begin to run until actual demand and refusal. Jameson v. Jameson, 72 Mo. 640; Waldron v. Alexander, 35 Ill.App. 319; Campbell v. Whorisky, 170 Mass. 63; Sullivan v. Fosdick, 10 Hum. 173; Railroad v. Continental Bank, 212 Mo. 505; Zane on Banks and Banking, Sec. 169, p. 290; Koelzner v. First Nat'l Bank, 125 Wis. 595. Where interest is payable on the principal obligation and no time is fixed for the payment of the interest, the interest is an incident of the principal and the interest is barred by limitations only as and when the principal is barred. 19 Am. & Eng. Cyc. (2 Ed.), 206; Greenwood v. Fenton, 54 Neb. 573; French v. Kennedy, 7 Barb. (N. Y.) 452; Bander v. Bander, 7 Barb. (N. Y.) 560. (8) The allowance of six per cent interest after...
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