165 A. 895 | Conn. | 1933
It appears from the stipulated facts that on December 21st, 1931, the Federal Reserve Bank of Boston sent to the West Haven Bank Trust Company, for collection, checks drawn upon the latter, which were collected by it by charging the amounts thereof against the accounts of the respective drawers, and the checks were cancelled. In remittance for the amount so collected, the West Haven bank, on December 22d 1931, drew its draft on a New York bank payable to and forwarded to the Federal Reserve Bank of New York for account of the Reserve Bank of Boston. On December 22d 1931, the Reserve Bank sent other checks as to which a similar procedure was followed. The remittance drafts sent to New York were duly presented for payment but not paid, as the West Haven bank had been closed on December 24th, 1931, by order of the bank commissioner. The note was sent and collected in the same manner, but remittance was made direct to the Reserve Bank by treasurer's check of the West Haven bank, drawn upon itself, which also was unpaid on account of the closing of the bank.
The Reserve Bank concedes in its brief that its *611
claim based upon checks so collected is precisely similar to the claim of the same bank which was under consideration in Bassett v. City Bank Trust Co.,
In Bassett v. City Bank Trust Co., supra, we held that the similar claim of the Reserve Bank was not entitled to payment before and in preference to the deposits and other liabilities of the bank, as trust funds or on the theory that the remittance drafts constituted an equitable assignment pro tanto of the deposit with the defendant's correspondent on which they were drawn, but we left open determination as to the status of such claims with respect to the classification to be accorded them and the resulting position as to priority under § 3935 of the General Statutes. The present reservation calls for such determination — specifically, "Whether the claim of the Reserve Bank, as agent for and in behalf of the payees or indorsing banks, of the checks sent for collection . . . should be classified in distribution under the head of `all deposits;' under the head of `all other liabilities;' or whether said Reserve Bank, as agent, is entitled in any way to participate as claimant in distribution."
It is not claimed or suggested by the receiver or the bank commissioner that the Reserve Bank as such agent is not entitled in any way to share in the distribution *612
of avails of the assets of the defendant bank on final settlement; the controversy is as to whether the claim is to be classified as a deposit, as the Reserve Bank contends, or as among the "other liabilities" over which deposits are accorded priority in order of payment under § 3935 of the General Statutes, which is quoted in a footnote.* The present problem, therefore, is as to the meaning and scope of the term "all deposits" as employed in that statute. The history of this legislation, which is traced in Bassett v. CityBank Trust Co.,
The most comprehensive and satisfactory definition of bank deposits which we have encountered is given in Marine Bank v. Fulton Bank,
We find nothing to indicate that the preference accorded deposits under § 3935 of the General Statutes was intended to apply to situations and relationships other than those signified by the usual and ordinary meaning of the term as above defined. The obvious reason actuating the preference to depositors in the sense of those who deliver to or leave money with a bank to be, in effect, loaned to and used by it until demanded, is to encourage and attract such deposits by affording them special protection. "Depositors, in the nature of things, are . . . in a preferential class. Without them a banking institution would perish from dry rot. `The success of almost all commercial banks depends upon their ability to obtain loans from depositors.' *614 First National Bank v. California,
When the deposit account of the maker of a check collected by the defendant for the Reserve Bank was charged with the amount thereof, the maker paid the check, his deposit was reduced by the amount of it, and the proceeds, clearly, became no longer a part of his deposit. Bassett v. City Bank Trust Co., supra, 115 Conn. at p. 14. Thereupon it became the duty of the defendant, under its agreement with the Reserve Bank, to forthwith, on the same day, remit those proceeds to it, a course manifestly inconsistent with the distinctive characteristics of a deposit as above noted. The money can hardly be said to be "left with" the West Haven bank, but quite the contrary. There is lacking, here, even the element of mutual running accounts of collections made which was present in the Metropolitan Life Ins. Co. case, supra, and in Parkesburg Bank's Appeal (6 Wkly. Notes Cas. 394) quoted with approval therein as follows: "The notes, drafts, and checks charged and credited, were merely in the current of their mutual dealings, and when credited did not constitute a deposit in the proper sense of the term as used in the Bank Acts. A depositor meant to be preferred, is one who places his money in deposit for safe-keeping, to be paid out on demand upon his checks or drafts therefor. His relation is one of confidence or trust, depending on the faith that his money will always be forthcoming when he needs it. . . . Such a transaction differs wholly from the transactions of banks and bankers dealing *615 with each other, by way of collections for each other, contained in running accounts of debits and credits. Such transactions are not deemed deposits in a proper sense."
In Anheuser-Busch Brewing Assn. v. Clayton (C. C. A.) 56 F. 759, the association, the appellant, had forwarded its draft on one Morris to the McNab Bank "for collection and returns." Morris took up the draft with his own check on the McNab Bank and on the same day the latter forwarded to the appellant exchange on a New York bank for the amount, but this was not paid, the McNab Bank having failed before its presentation in New York. It was held (pp. 761, 762) that the appellant was not a depositor entitled, as such, to preference over other creditors of the bank, under the constitution of Alabama, Art. 14, § 17. "Appellant did not leave its money with the McNab Bank subject to its order, or to be returned to it on call. It did not, for its own convenience, part with the title to its money, and loan it to the bank. There was no contract, express or implied, that the collection from Morris on appellant's account was to be a deposit of any kind, but it is clear that it was intended that the money received from Morris should be remitted in `a reasonable time' from date of collection."
The Pennsylvania statute bears a strong resemblance to our § 3935. It originally provided, Act of May 8th, 1907, P. L. p. 192, that upon liquidation the assets of a trust company should be distributed in the following order: "First. To pay all deposits in the trust company. Second. To the payment and discharge of all the remaining liabilities of such trust company, or corporation." It was held that under that statute, funds not subject to the order of the depositor at his pleasure were not preferred. Commonwealth ex rel. v.Tradesmen's Trust Co.,
It had also been held in Commonwealth ex rel. v.American Trust Co. (1912)
These decisions and resulting statutory amendments are confirmatory of our views above expressed as to the proper construction and consequent limitations of our own statute and, as well, suggest that if a more *617
liberal policy as to protection by way of preference to owners or holders of checks and similar items forwarded for collection, in the event of insolvency of the collecting bank, is desirable, it is properly to be provided through legislative action. Bassett v. City Bank Trust Co.,
Our answer to the questions reserved is that the claim of the Federal Reserve Bank as holder of the treasurer's check for the amount of the note collected and its claim as agent for and in behalf of the payees or indorsing banks of the checks sent for collection should be classified in distribution under the head of "all other liabilities."
No costs will be taxed in this court.
In this opinion the other judges concurred.