Valentine v. Andrew
| Decision Date | 15 March 1927 |
| Docket Number | No. 37598.,37598. |
| Citation | 203 Iowa 463,212 N.W. 674 |
| Parties | VALENTINE v. ANDREW. |
| Court | Iowa Supreme Court |
OPINION TEXT STARTS HERE
Appeal from District Court, Cerro Gordo County; C. H. Kelly, Judge.
This is a claim for preference in a bank receivership, which the district court denied. Claimant appeals. Affirmed.Smith & Feeney, of Mason City, for appellant.
Blythe, Markley, Rule & Clough, of Mason City, for appellee.
On November 10, 1924, claimant left for collection with the City Commercial Savings Bank of Mason City, without special instructions, notes and mortgages made by Christians for $10,000, besides accumulated interest. The bank was given no authority to retain the proceeds on deposit. On April 16, 1925, the bank wrote to the claimant, who was then in California, that it had collected the mortgage in the amount of $10,955.60. The letter stated:
The certificates inclosed were dated April 16, 1925. Each (except as to amount) read:
“
On April 20, 1925, claimant wrote the bank:
“Yours recd with C/Ds amt. of Christians mtg. I would have preferred Dfts however I can cash same here. As he was making his loan outside I thought it would not discommode your bank. As I have stated many times before I am anxious to have my small possession all in one place and in doing so have tried not to discommode your bank any more than I can help. Now I would like to have you place my stock in City Coml where it would do you the most good. When do you expect to be able to pay dividends. I would like one of your late statements.
Kind regards to you and Oliver & all there.”
Claimant testified that he took the certificate for $3,455.60 to the First National Bank of Los Angeles and deposited it on or about April 20, 1925. The other three certificates he deposited with the First National Bank of Los Angeles on the 4th or 5th day of May, 1925. His account for the three $2,500 certificates was credited with the amount of them by the First National Bank of Los Angeles. The first mentioned certificate was forwarded by the First National Bank of Los Angeles, through the clearings, and paid without interest on April 29, 1925. All four were indorsed in blank by claimant and also bore the several special indorsements of the First National Bank of Los Angeles, Cal., the Continental & Commercial National Bank of Chicago, and the Federal Reserve Bank of Chicago, to “pay to the order of any bank or banker, prior indorsements guaranteed.” None of the indorsements is stated to be for collection. The City Commercial Bank did not open for business May 11, 1925, or afterward, and the three $2,500 certificates which were forwarded by the Federal Reserve to the City Commercial Bank May 11th were not paid. Over proper objections made by the receiver, the claimant testified:
“Q. Did you have any intention at the time you left this Christians mortgage with City Commercial Savings Bank, or at any subsequent time, to have the proceeds deposited in that bank to your account? * * * A. I did not.
Q. At the time of the receipt by you of these four certificates of deposit aggregating something over $10,000, did you have any intention to accept these certificates of deposit as a deposit in the City Commercial Savings Bank and to your credit? A. I did not. * * *
Q. Mr. Valentine, did you have any intention to accept these three certificates of deposit, marked C. D. and E., as deposits by retaining them to the 4th and 5th day of May, 1925, when they were deposited for collection in the First National Bank at Los Angeles? A. I never intended them as a deposit. * * *
Q. And when you deposited them in the bank, you were merely treating them as a medium of exchange, were you? A. Yes.”
The bank's vice president testified that he simply took that method of making the remittance, thinking claimant might be induced to leave the money there and might be able to use them in that form; that it was just their way of remitting.
[1][2] The funds realized from the collection were held by the bank as claimant's agent. Instead of forwarding the funds, which as agent it was the bank's duty to do, it evidently mingled them with its own money with the thought of inducing claimant to leave them on deposit and thereby establishing the relationship of bank and depositor. To this end the bank forwarded to claimant the four certificates, thereby tendering to claimant for its money in the bank's possession the relationship of depositor at interest. The claimant might have rejected this proposal, but he did not. He acknowledged receipt of the certificates, stated he would have preferred drafts but he could cash the certificate there at Los Angeles. It may be observed that his statement, “he could cash it here,” carries the implication of more or less weight that he did not consider the bank as unauthorized to remit by draft. We have decided that one who...
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