Turner v. Farmers' Exchange Bank of Gallatin

• Decision Date: 11 January 1932
• Citation: 45 S.W.2d 1084,226 Mo.App. 714
• Parties: E. O. TURNER, APPELLANT, v. THE FARMERS EXCHANGE BANK OF GALLATIN ET AL., RESPONDENTS
• Court: Kansas Court of Appeals

45 S.W.2d 1084

226 Mo.App. 714

E. O. TURNER, APPELLANT, v. THE FARMERS EXCHANGE BANK OF GALLATIN ET AL., RESPONDENTS

Court of Appeals of Missouri, Kansas City

January 11, 1932

Appeal from Circuit Court of Daviess County.--Hon. Ira D. Beals Judge.

REVERSED AND REMANDED (with directions).

Reversed and remanded.

Dean H Leopard and Dudley & Brandom for appellant.

Ed C Hyde, Earle W. Frost, J. W. Alexander and L. B. Gillihan for respondents.

OPINION

ARNOLD, J.

--This is an action seeking to establish a claim, as a preferred allowance, against the Farmers Exchange Bank of Gallatin, Missouri, which failed and was placed in the hands of the Commissioner of Finance for liquidation. In due time plaintiff filed his claim against the receiver, which was allowed as an ordinary claim. This suit was instituted to have same declared a preferred claim.

The cause was tried to the court, resulting in a judgment denying a preference, but approving the allowance as a common claim. After an unavailing motion for a new trial, plaintiff prayed for and was granted an appeal to this court. Believing that a State officer, within the meaning of the provisions of law so providing, was a party to the cause and that this court was without jurisdiction of the appeal, we transferred the same to the Supreme Court. However, that court decided such was not the situation, and accordingly ordered the cause returned to us for determination.

The record discloses, pursuant to an agreement between parties representing various claimants, and counsel for the bank and the commissioner, all matter of disputed allowances was informally tried by the court in one proceeding. Plaintiff's petition alleged the incorporation of the bank; that it was engaged in the general banking business; that prior to March 4, 1926, it was open, receiving deposits, paying checks, transacting business as usual and functioning in all respects as such, thereby, it was charged, representing itself to be solvent and able to meet its obligations; that on said day, while so operating, plaintiff, believing said bank to be solvent, deposited the sum of $ 573.50; that the funds of said bank were increased thereby in said amount. The petition then alleges that on said date the bank was "hopelessly and irretrievably insolvent" and unable to meet its obligations which facts were well known to the officers and directors; that plaintiff had no knowledge thereof; that by receiving said deposit under the circumstances alleged, an act of fraud was committed and that said bank became and was a trustee ex maleficio of plaintiff's money so deposited; that title thereto did not vest in said bank, but the ownership thereof remained in plaintiff; that said bank passed into the hands of the banking department of the State for liquidation the very day of said deposit, namely March 4, 1926, at which time plaintiff's money had not been withdrawn; that there was cash on hand and in solvent correspondent banks greatly in excess of said deposit; that plaintiff's fund was still in the hands of said defendant bank and liquidating agents thereof as a trust fund due him; that by reason of its insolvency at the time of receiving said deposit, it was the duty of said bank and its officers, directors and employees in charge or the operation thereof to have advised plaintiff of the facts of insolvency and inability to meet its obligations; that by reason thereof it was the duty of the bank to refuse to accept and receive said deposit; that acceptance of said deposit at said time and under said conditions did not serve to create a relation of debtor and creditor and such relation did not exist; that a relation of trust and confidence was created and existed and said deposit became and was a trust fund; that by reason of the premises plaintiff was entitled to have said sum declared a trust fund impressed upon all the property of the bank, with preferential payment thereof ahead of general creditors.

The petition then concludes with allegations as to time of due filing and presentation of claim to the deputy Commissioner of Finance in charge of the liquidation of the bank for allowance with preferred classification; the refusal so to do and institution of this action within the time required by law. The prayer for judgment asks that the bank be declared a trustee ex maleficio of said $ 573.50, and said amount decreed to be a trust fund in the hands of the Commissioner of Finance and his special deputy in charge thereof; that their action in refusing an allowance as a preferred claim be disapproved and an order entered that such amount be paid as a preferred claim before the general creditors of said bank. The answer filed on behalf of all the defendants, respondents herein, consisted merely of a general denial.

Without attempting to detail the evidence, the record discloses that all material allegations of the petition are substantially supported by the testimony. There is...