Tiernan's ex'R v. Security Building & Loan Ass'n, No. 2

• Decision Date: 14 November 1899
• Citation: 152 Mo. 135,53 S.W. 1072
• Court: Missouri Supreme Court
• Parties: TIERNAN'S EX'R v. SECURITY BUILDING & LOAN ASS'N, NO. 2.

53 S.W. 1072

152 Mo. 135

TIERNAN'S EX'R v. SECURITY BUILDING & LOAN ASS'N, NO. 2.

Supreme Court of Missouri, Division No. 1.

November 14, 1899.

BUILDING AND LOAN ASSOCIATION — TRUST FUNDS — DEPOSIT IN PERSONAL ACCOUNT — ASSIGNMENT TO CESTUI QUE TRUST — WAIVER OF RIGHT TO PARTICIPATE IN SPECIFIC FUNDS.

1. Rev. St. 1889, § 2811, provides that building associations shall not loan their funds on personal security. The by-laws of a building association provided that the secretary should, at least once a month, deposit all moneys received by him with the treasurer. An agent of the secretary, while he was ill, deposited certain funds belonging to the association, which came to the agent's hands while acting for the secretary, to the credit of the secretary's personal bank account. Subsequently the secretary died, and his estate was discovered to be insolvent. Held, that the funds so deposited by the agent were trust funds, which equity will award to the association out of funds in the secretary's personal account as against his executor, though they cannot be identified or separated from other funds with which they were mingled; the by-law providing for monthly settlements not creating the relation of creditor and debtor between the secretary and the association, nor operating as a loan to him of the funds which he received, so as to affect the trust relationship.

2. Where a trustee deposited trust funds in his individual bank account, his executor cannot object to an assignment to the cestui que trust of the full amount of such funds, where they have been brought into court by the bank, and the executor of the trustee and the beneficiary, as rival claimants of the deposit, interpleaded, on the ground that the amount of the deposit has been augmented by the deposit of funds belonging to other trusts, where such other beneficiaries do not interplead, and it does not appear whether or not they hold security for their claims, as the executor is not entitled to such other trust funds.

3. Where a person for whom an agent has collected money and deposited it in his individual bank account converts his demand into a judgment, or proves his claim against the estate of the agent, he thereby waives his right to an assignment out of the funds of the agent on deposit in the bank of the amount of his funds deposited therein.

Appeal from St. Louis circuit court; Selden P. Spencer, Judge.

Action by Joseph H. Tiernan's executor against the Security Building & Loan Association No. 2 to determine title to certain moneys deposited by decedent in the State Bank of St. Louis, which brought the funds into court, and caused parties plaintiff and defendant to be interpleaded. From the decree the executor appeals. Affirmed.

Frank K. Ryan, for appellant. Lubke & Muench, for respondent.

BRACE, P. J.

This is an appeal by John H. Tracy, executor of Joseph H. Tiernan, deceased, from a decree of the circuit court of the city of St. Louis, in favor of the Security Building & Loan Association No. 2, for the sum of $3.231.25, payable out of a fund of $3,561 brought into said court by the State Bank of St. Louis, in an action instituted by a bill of interpleader by said bank therein against the said parties, and in which each of them interpleaded claiming said funds, the remainder thereof after payment of costs being awarded to the appellant. There is no dispute about the facts in the case. In the year 1891, the respondent association was duly incorporated under the provisions of article 9, c. 42, Rev. St. 1889. By section 7 of its by-laws, it was provided that the secretary "shall, at least once a month, promptly deposit with the treasurer all moneys received by the association"; and by section 8, that "the treasurer shall receive from the secretary all moneys paid into the association, and receipt therefor, and then deposit the same to its credit in some bank to be designated by the board of directors." The State Bank of St. Louis was designated by the board of directors as the depository of the association, in pursuance of the by-laws. Afterwards, on the 12th day of December, 1893, section 8 was amended so as to read as follows: "The treasurer shall receive from the secretary a duplicate ticket of deposit for the money deposited in some bank to be designated by the board of directors." In August, 1895, the officers of the association were Leopold Freund, president, Joseph H. Tiernan, secretary, and Andrew M. Blong, treasurer. Tiernan was a real-estate agent and a collector of rents, and in the transaction of his business as such had an office, with a vault and safe, for keeping papers, moneys, and valuables. He had an individual bank account with the State Bank of St. Louis, and a clerk named Schramm, who attended to his business and signed his name in his absence. The members of the association paid their monthly dues to Tiernan as secretary at his office, and these dues matured about the same day every month. Prior to August 22, 1895, one William Holste had borrowed from the Security Loan & Building Association No. 2 a sum which, with interest, amounted to $3,231.25 on that date. The loan was secured by deed of trust on Holste's realty in St. Louis. Tiernan was then lying sick at one of the hospitals in St. Louis, and his business was being attended to by his clerk, Mr. Schramm, who also performed Tiernan's duties as secretary of the association for the time being. Holste desired to pay off his debt, and Schramm sent for Mr. Freund, the president of the association, and the latter went to Tiernan's office, which was also regarded as the office of the association, and met both Holste and Schramm. The papers of the association were kept at this office. Holste tendered in payment of his debt a check drawn by the St. Louis Trust Company. Freund refused to accept the check until it was certified by the bank on which it was drawn, and Schramm then obtained this certification, and the three parties visited the recorder's office, where Freund, as president, released the deed of trust given by Holste, and accepted from him the check, in form as follows:

                   L. Mitchell, Teller
                       "St. Louis Trust Company
                             St. Louis, Aug. 22, 1895
                    "No. 21,537
                    "Pay to the order of J. H. Tiernan
                   Secy., $3,231.25, thirty-two hundred and
                   thirty-one 25-100 dollars.
                                 "John D. Filley, Secretary.
                       "To

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