U.S. Nat. Bank of Omaha, Neb., v. Glanton
| Docket Number | 415. |
| Decision Date | 16 May 1917 |
| Citation | 92 S.E. 625,146 Ga. 786 |
| Parties | UNITED STATES NAT. BANK OF OMAHA, NEB., v. GLANTON. |
| Court | Georgia Supreme Court |
Syllabus by the Court.
Where one bank sends a draft to another bank for collection without any specific instructions, and, in the usual course of business, the receiving bank collects the draft by accepting a check of the drawee drawn on itself, and charging the amount thereof against the drawee's account, this transaction does not establish the relation of trustee and cestui que trust between the two banks as to the amount of the draft; but it does establish the relation of debtor and creditor, the forwarding bank having no preference over general creditors.
Error from Superior Court, Troup County; R. W. Freeman, Judge.
Receivership proceeding in the matter of the Bank of West Point, in which the United States National Bank of Omaha, Nebraska, filed an intervention and claim against H. D. Glanton, receiver. Judgment declaring intervener a common creditor not entitled to any preference, and it brings error. Affirmed.
Hatton Lovejoy, of La Grange, for plaintiff in error.
A. H Thompson, of La Grange, and R. H. Freeman, of Newnan, for defendant in error.
GILBERT J. (after stating the facts as above).
The question to be determined in this case is whether the United States Bank of Omaha, hereinafter called the intervener, is entitled to a preference over general creditors of the insolvent Bank of West Point, by reason of the facts set out in the record. The solution of this question has been simplified by the clear statement of the contentions in the briefs of counsel for the respective sides. Both sides admit that there must be an identification of the funds collected by the insolvent bank, in the hands of the receiver, before there can be a preference. Both sides agree that the intervener can have no preference or priority in the general assets of the insolvent bank, nor in any collections made by the receiver. Both sides admit that the relation of trustee and cestui que trust between the insolvent bank and the intervener must have existed and that the funds collected constituted a trust fund, before there can be a preference over the general creditors. Counsel for the plaintiff in error contends that the transaction constituted such a trust relation. The plaintiff in error further contends that payment of the draft by the drawee by means of a check instead of cash, in no way affects his rights, since the result is the same in either instance. Thus it will be seen that the only disputed issues are: (1) Did the payment of the draft by a check instead of cash change the legal character of the transaction, and thus alter the rule? (2) Do the facts constitute a trust relation entitling the intervener to a preference over general creditors? Should the latter question be answered in the affirmative, then, and then only, it must be determined if the proceeds of the collection have been definitely traced and identified.
As is seen from what precedes, counsel by the exercise of great ability and zeal have furnished an elaborate array of authorities to support their respective contentions. The transaction at the base of the litigation is of such frequent and ordinary occurrence in the channels of business that it has often been the subject-matter of judicial deliverance. It is not to be wondered that the courts have disagreed especially since there is not wanting a basis for strong and appealing argument on both sides of the question. While this is true, there is not so much real conflict of principle as the alignment in the briefs would indicate. Some of the cases differ only because of special facts peculiar to themselves. It is useless to consume time and space in a vain...
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