Appeal from Circuit Court, Cape Girardeau County; Frank Kelly, Judge.
"Not to be published in State Reports."
Action by Clyde A. Vandivort, receiver of the Cape Girardeau Bridge Company, a corporation, for allowance of a preferred claim out of the assets of the Sturdivant Bank, a corporation, in charge of O. H. Moberly, Commissioner of Finance of the State of Missouri. From a judgment denying a preference, plaintiff appeals.
Reversed and remanded, with directions.
SUTTON, Commissioner.
This is an action for the allowance of a preferred claim for $4,217.50, in favor of plaintiff, out of the assets of the Sturdivant Bank, which is in charge of the finance commissioner for the purpose of liquidation. The court found that plaintiff was not entitled to a preference, and gave judgment accordingly. Plaintiff appeals.
On February 2, 1932, the Cape Girardeau Bridge Company opened an account with the Sturdivant Bank, designated as the "Cape Girardeau Bridge Company Special Coupon Account." The account was opened for the purpose of providing for the payment of interest coupons No. 5, attached to and covering interest on bonds issued by the bridge company. This account was opened by a deposit of $15,000. Afterwards, between February 2, 1932, and June 13, 1932, various further deposits were made to the account aggregating
$20,000, bringing the total amount of the deposits to $35,000, which was the aggregate amount of interest coupons No. 5. Between February 2, 1932, and July 11, 1932, there were charged against this account items amounting in the aggregate to $30,782.50 for disbursements made in payment of interest coupons, leaving a balance in the account to the credit of the bridge company on July 11, 1932, of $4,217.50, which balance plaintiff in this action seeks to have allowed as a preferred claim.
On July 8, 1932, plaintiff, Clyde A. Vandivort, was appointed receiver for the bridge company by the United States District Court for the Eastern District of Missouri, and has since that date been acting as such. On July 11, 1932, the balance of $4,217.50 was charged out of the account of the bridge company and credited to the account of the receiver, which account was designated as "Clyde A. Vandivort, Receiver for Cape Girardeau Bridge Company Special Coupon Account," and so the account stood on November 5, 1932, when the bank was placed in charge of the finance commissioner for liquidation.
Various deposits were made to the account by the bridge company, as follows: February 2, 1932, $15,000; February 6th, $7,800; March 1st, $2,644.37; March 15th, $2,588.26; May 13th, $2,000; June 6th, $370.13; and June 13th, $4,967.37. The deposit of $15,000 was made by a check given by the bridge company on its general account in the bank. The other deposits were made by the surrender of time certificates of deposit held by the bridge company against the bank. There were numerous items charged against the coupon account ranging in amounts from $17.50 to $19,600. The average daily balance in the account from February 2d to July 11th was $2,015.22. The charge of $19,600 resulted from a check drawn on the bank by the bridge company, in favor of a bondholders' committee, to pay interest coupons held by said committee. The other charges resulted from the payment of interest coupons presented to the bank by the various holders thereof.
Clyde A. Vandivort testified, for plaintiff, as follows: "I was secretary of the Cape Girardeau Bridge Company on February 2, 1932, and continued as secretary until I was appointed receiver on July 8, 1932. I was also president of the Sturdivant Bank. The Cape Girardeau Bridge Company had been doing a banking business with the Sturdivant Bank prior to February 1, 1932. The Sturdivant Bank was one of the depositaries of the Cape Girardeau Bridge Company. The bridge company had a general checking account with the bank at the time I was appointed as receiver for the bridge company. An account was opened on February 2nd, by a deposit in the bank by the bridge company of $15,000. It was agreed with me, and I said I would take the deposit account and have charged against that account only coupons No. 5 as presented for payment. I said that to Mr. C. L. Harrison, who was president of the bridge company. This agreement was made in a meeting where we were discussing how this should be handled. Mr. Harrison represented the bridge company, and I was present as secretary of the company. It was discussed how the payments should be made and the decision was reached to advertise the fact, in New York and Chicago papers, that the coupons would be paid by the Sturdivant Bank. I instructed the officers and clerical force in the bank that only coupons presented for payment should be charged against this account. Contemporaneous with the existence of this account the bridge company had an ordinary checking account with the bank. When this coupon account was opened a pass book was not given to the bridge company. It was just a temporary account made by deposit slips and duplicates. The deposit slips were headed `Cape Girardeau Bridge Company Special Coupon Account.' `Special coupon account' designated which account in the bank the money should be credited to. When coupons came into the bank the employee in charge would make out debit slips for the charge. These debit slips were kept until the end of the month, and then sent with the coupons and a statement of the bank account to the bridge company. I did not know the approximate amount of cash in the bank at the time it was closed and placed in the hands of the finance commissioner, but it was more than $4,217.50 in cash and in good marketable securities. I became president of the Sturdivant Bank in July, 1929. I served continuously in that capacity until the bank closed. When I opened a separate account I opened it for the purpose of paying out of that account interest coupons No. 5. I do not say that when the account was opened we had a meeting of the officers of the bridge company and the officers of the bank. There was a meeting of the Bondholders' Protective Committee and the officers of the bridge company. I attended that meeting as an officer of the bridge company. I was not at the meeting for the purpose of transacting any business for the bank. That was not the primary object of the meeting. The bank feature and the way the account should be handled came into the meeting later. I was then interrogated
as a bank official. The bridge company set aside $35,000 with which to pay coupons No. 5, and asked that it be set up in a special account at the bank. There were no agreements or arrangements with the officers of the bank except the arrangements made at that meeting. The handling of the account separately from the other account was largely a matter of convenience for the bridge company. The bank did not profit by this account except as a matter of convenience. It was such an account that the only charges that could be made against it were for coupons. The officers and employees of the bank had instructions relative to the handling of this account, and it was common knowledge amongst them as to how the account was to be handled. Since the receivership no payments have been made out of the account. Interest coupons No. 5 were widely scattered. They were sold from Maine to California. I didn't know who owned them."
C. L. Harrison testified, for plaintiff, as follows: "On February 1, 1932, I was chairman of the board of directors of the Sturdivant Bank, and continued as such down to the date of the closing of the bank. I was also president of the Cape Girardeau Bridge Company. There were discussions between the officers of the Sturdivant Bank, who were also officers of the Cape Girardeau Bridge Company, with respect to opening a special account. It was decided that in order to honor these coupons we had to be sure they wouldn't be encroached on by our general expenses, and we put it into a special account. I told the cashier of the bank that only coupons No. 5 were to be charged against this coupon account as they came in. We arranged to transfer to this coupon account enough to take care of all such coupons presented from time to time. The representatives of the bridge company knew that they had these maturing coupons, and we decided to have a special account set aside for the purpose of creating a fund to retire these coupons as they matured. That was the occasion for our opening the separate account. Our primary idea was to safeguard the coupon accumulations against the possibility of encroachment by the running expenses of the bridge company. We wanted to be sure for every coupon presented there would be thirty-five dollars in the till. We couldn't safeguard that except to set it aside, and it was so set aside. We took the precaution of building up a fund to meet the coupons as they matured and for no other purpose. It was a sacred fund in my estimation. The officers of the bridge company came to that understanding for the purpose of protecting our own interests."
Plaintiff contends that the deposits made by the Cape Girardeau Bridge Company to the so-called special coupon account with the Sturdivant Bank were special deposits such as to entitle plaintiff to preferential payment of the balance remaining in the...
