216 N.W. 1 | Iowa | 1927
I. The State Bank of New Hampton closed its doors on December 27, 1924. On December 5, 1924, Ward B. Hammond, as clerk of the district court of such county, deposited *879
1. TRUSTS: to the credit of his account, as clerk, in the establish- said State Bank, a check for $1,000, which he ment: had received in payment of a fine, and for which deposit of an accounting would be due from him on January official 1st next following. The bank official receiving funds. the deposit was informed of the source of the check, and of the fact that the depositor held it only in his official capacity. The theory upon which the claim is pressed by the appellants is that Hammond held the check in trust only; that, the bank official knowing that fact when he received the same, the bank itself became a trustee, to the same extent that the depositor was a trustee; and that this is so whether the deposit was rightful or wrongful on the part of the depositor; that, if this be not so, the deposit was wrongful because no authority is conferred by law upon the clerk to deposit the trust funds in his hands. The argument in support of this theory is predicated largely upon some of our early decisions. There was a time in the early history of this state when the deposit in a bank of a trust fund by a trustee was deemed a technical conversion and a breach of duty on the part of the trustee. Lowryv. Polk County,
II. There is a further reason why the appellants may not prevail. They contend that the cash in the bank had never been reduced to a point below the amount of the deposit, and that the amount of such cash in the bank on the day of 2. BANKS AND its closing was slightly in excess of $4,000. BANKING: The contention is that they have, therefore, trust funds: traced their check into the cash resources of negativing the bank on the day of its closing. But it is to augmentation be noted from the record that the deposit of the of assets. check did not increase the cash resources of the bank on the day of the deposit. The check was passed by the bank into the clearing of the day. The result of the day's clearing left a balance in favor of the State Bank of $1,546, for which it received, not cash, but a draft. This draft was sent by the State Bank to the Merchants' National Bank of Cedar Rapids, its correspondent bank, for which it received a credit in its account at that bank. This credit was later wholly absorbed by the indebtedness of the State Bank to the Cedar Rapids bank. The receiver never received any remnant from said Cedar Rapids bank.
The appellants lay some stress at this point upon an alleged discrepancy in the evidence, in that, on December 27, 1924, the books of the Cedar Rapids bank for that day showed, in its current account, a credit balance in favor of the State Bank for more than $2,000. This is not necessarily inconsistent with the testimony of the examiner, that on that day the State Bank had, in fact, an overdraft of more than $1,500 at the Cedar Rapids bank. The state of the books at any particular hour necessarily falls short of showing the exact relation of the parties. Bookkeeping follows the event, and is necessarily a few hours behind. Events of to-day may go upon the books of to-morrow. Items in transition will carry varying dates upon the respective books.
The fact disclosed by this record is that the State Bank had an overdraft, and not a balance, at the Cedar Rapids bank. The result is that the $1,000 check has been clearly traced into the field of dissipation.
Other points argued need not be considered. The reasons here indicated are conclusive on the result. *881
The judgment below is, accordingly, affirmed. — Affirmed.
STEVENS, FAVILLE, KINDIG, and WAGNER, JJ., concur.