The Guymon-Petro Mercantile Company v. The Farmers State Bank of Cunningham
Decision Date | 06 February 1926 |
Docket Number | 26,425 |
Parties | THE GUYMON-PETRO MERCANTILE COMPANY, Appellant, v. THE FARMERS STATE BANK OF CUNNINGHAM, and E. C. CROW, Receiver, etc., Appellees |
Court | Kansas Supreme Court |
Decided January, 1926.
Appeal from Kingman district court; GEORGE L. HAY, judge.
Judgment affirmed.
SYLLABUS BY THE COURT.
BANKS AND BANKING--Insolvency--Payment of Claims--Preferred Claims. Plaintiff received three checks on the Farmers State Bank of Cunningham in payment of accounts due it from Cunningham retail merchants. The checks were deposited for collection in a Hutchinson bank, which sent them to a Kansas City trust company, which forwarded them direct to the Cunningham bank for returns. The latter bank charged the checks against the checking accounts of the makers and sent drafts to the trust company in payment, but before the drafts were presented to the drawee the Cunningham bank failed and was taken in charge by the bank commissioner and the drafts were dishonored, and the trust company and the Hutchinson bank charged back the amount of the checks to plaintiff. Held, that the trial court correctly decided that plaintiff was entitled to a common claim against the assets of the insolvent bank, and not entitled to a preferred claim, and the transaction did not give rise to a trust fund in the hands of the receiver in favor of plaintiff.
Don Shaffer and Mable Jones Shaffer, both of Hutchinson, for the appellant.
Clark A. Wallace, of Kingman, for the appellees.
In this action the plaintiff sought to have a trust declared in its favor against assets in the hands of the receiver of an insolvent bank.
The facts were these: The Guymon-Petro Mercantile Company, plaintiff, conducts a wholesale mercantile business in Hutchinson. Certain retail merchants of the village of Cunningham were indebted to it. On June 23, 25 and 26 plaintiff received checks for $ 52.28, $ 289.94 and $ 7.95 from three of these debtors, in satisfaction of their accounts, all drawn on the Farmers State Bank of Cunningham.
Plaintiff deposited these checks in the Commercial National Bank of Hutchinson. That bank sent the checks for collection to the Commerce Trust Company of Kansas City, which in turn sent them direct to the Cunningham bank for returns. The makers of the checks had sufficient funds on deposit with the Cunningham bank to meet them, and that bank charged the amounts of the checks against the accounts of the makers and sent drafts to the Commerce Trust Company covering these and other items; but before these drafts were presented to the drawees for payment the Cunningham bank failed and it was taken charge of by the bank commissioner and later by the defendant receiver. The drafts were dishonored, and the amounts of the checks were charged back by the Kansas City trust company to the Hutchinson bank and by it in turn to the plaintiff.
This lawsuit against the Cunningham bank and its receiver followed. The foregoing and other facts of minor consequence were admitted to be true; and the defendant receiver, called as a witness for plaintiff, testified that when the bank closed and the bank commissioner took charge it had $ 1,049.11 in cash and sight exchange, and when the receiver took charge he had more money in his hands than was necessary to meet plaintiff's claim for preference.
Judgment was entered accordingly and plaintiff appeals, presenting an ingenious argument based on the premise that the relation of principal and agent was created by the conditions imposed by the Hutchinson bank when it received the checks from plaintiff. That condition was the not unusual one imposed by any bank in tentatively crediting to its depositors' accounts the items specified in miscellaneous checks received from its depositing patrons. In plaintiff's pass book the amounts of these checks were itemized and credited under this proviso:
"This bank, in receiving out-of-town checks and other collections, acts only as your agent and does not assume any responsibility beyond due diligence on its part the same as on its own paper."
But granting that the relation of principal and agent existed between the plaintiff depositor and the Hutchinson bank, and between the Hutchinson bank and the Kansas City trust company, and between the Kansas City company and the Cunningham bank, if that train of relationships did in fact arise consecutively, it is non sequitur to argue therefrom that plaintiff has a preferred claim against the defendant bank. Carrying to its legitimate conclusion the idea that each bank was successively the...
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