6 N.E.2d 140 | Ill. | 1936
Leave to appeal having been granted, this cause is here for a review of the judgment of the Appellate Court for the Fourth District.
The Citizens State Bank of Johnston City, Illinois, was closed by the State Auditor on April 10, 1930. Six days prior thereto, on April 4, 1930, John A. Baiar delivered to the cashier of that bank two certificates of deposit, one for the sum of $10,875 and the other for $700, to be used for the purchase of United States liberty bonds. A receipt therefor was delivered by the bank signed by its cashier, and this cashier, L.D. Hobbs, testified in respect thereto on the intervening petition of Baiar's administrator seeking a preference in the receivership. Hobbs testified that the certificates were delivered to him for the purchase of liberty bonds but the bank had closed before it really had time to get them. It was his testimony that it had been a custom of the bank for at least eighteen years to purchase liberty bonds for its customers upon request and that the bank had so handled several hundred thousand dollars in that form of security. The trial court allowed the claim *210 preferential standing to the extent of participating in the distribution of the lowest amount of cash on hand in the bank between the date of the receipt and the date the bank closed. This judgment was reversed by the Appellate Court, holding that the claim could not be preferred and that Baiar's administrator was simply an unsecured creditor.
In People v. Farmers State Bank,
Appellant relies strongly on the case of People v. Bates,
Appellant says, however, that the situation is the same as though Baiar had cashed the certificates of deposit on April 4, 1930, and then handed the money back through the window with instructions to buy liberty bonds, and says that under those circumstances a trust would unquestionably have arisen entitling appellant to a preference. On this branch of the case he relies upon certain language in People v. Peoples Bank and Trust Co.
The case of Blakey v. Brinson,
Of similar import and likewise in point is the case of Norling Bloom Co. v. Exchange Trust Co.
We think the holdings in these cases are consistent with the rules previously announced by this court and must prevail in deciding the present litigation. The original relationship between Baiar and the Citizens State Bank was that of debtor and creditor, and necessarily so remained unless changed. The debt was never discharged by payment or *215
otherwise, and the only agency created was one to buy bonds, the exact number, series, interest rates and amount not being determined. The most that can be said of this transaction is, that the debtor promised that within a reasonable time it would liquidate its indebtedness to Baiar, and that it would do this by applying its own indebtedness to him to the purchase of bonds and would later deliver these bonds to him. No specific fund was ever provided for this purpose nor was any money segregated or set apart. Neither was anything traced into the bank's assets which could be the subject matter of a trust, as in the Bates case,supra. It is fundamental that a debtor cannot be trustee of his own debt for his creditor, (Marble v. Estate of Marble,
The Appellate Court arrived at a correct conclusion, and its judgment will be affirmed.
Judgment affirmed.
FARTHING and WILSON, JJ., dissenting.