34 S.W.2d 143 | Mo. Ct. App. | 1930
These are suits in equity to impress a trust upon certain funds in the American National Bank at St. Joseph, Missouri, in favor of the plaintiffs. The two cases were consolidated below and tried together, the facts and questions of law in both cases being identical. There is but one abstract of the record, and the statements and briefs cover both cases. On this review, the two cases will be considered together.
The material facts are not in dispute; hence the only question for consideration here is the application of the law to the facts and on this, of course, the parties do not agree. The cases were tried upon an agreed statement of facts, which because of its necessarily extended recitation, will not be set out in full, but a more abbreviated statement, including all the material facts will be used. These facts briefly stated are as follows:
On June 13 and 14, 1929, plaintiff (case No. 17001) the First National Bank of Auburn, Nebraska, presented certain checks to the Nemaha County Bank of Auburn, for collection, and on June 14, 1929, plaintiff (case No. 16997) Carson National Bank of Auburn, Nebraska, likewise presented certain cheeks to the Nemaha County Bank for collection. The Nemaha County Bank collected all of said checks by charging same against the deposit account of the respective drawers. For the collection so made, on June 13, 1929, the Nemaha County Bank, on that date, delivered to the First National Bank a sight draft in the sum of $1127.17, payable to it, and drawn by the Nemaha County Bank on the American National Bank of St. Joseph, Missouri. For the collections similarly made by it on the 14th day of June, 1929, the Nemaha County Bank, on that date, delivered to the First National Bank a draft for $4549.02, payable to it, and drawn by the Nemaha County Bank on the American National Bank
On June 15, 1929, Clarence 0. Bliss, secretary of the department of trade and commerce of Nebraska, notified the American National Bank that on that day the Nemaha County Bank had closed its doors and that he had taken possession of the bank. A few moments after the receipt of this notification, the drafts were presented to the American National Bank, but payment was refused upon the ground that official notice of the closing of the Nemaha County Bank had been received. The Nemaha County Bank was indebted to the American National Bank in the sum of $21,866.24, evidenced by a promissory note, which at that time, had a credit of $1550. The said note was to mature on June 23, 1929.
On June 17, 1929, the vice-president of the American National Bank was informed by the cashier of the First National Bank of Auburn of the circumstances under which the drafts had been received. It appears the $11,659.12 remained to the credit of the Nemaha County Bank in the American National Bank until July 1st, at which time the latter bank applied the same on its note and charged the amount to the account of the Nemaha County Bank. It appears that as collateral security for the payment of said note, the American National Bank also held a number of notes aggregating about $29,000, and that said bank collected from the makers of these collateral notes an amount sufficient to pay the balance on the note executed by the Nemaha County Bank, after applying the $11,659.12 on deposit and leave $1179.09 to the credit of the Nemaha County Bank, and the, collateral notes which remained uncollected in the hands of the American National Bank.
The Carson National Bank and the First National Bank of Auburn, Nebraska, instituted suits in the circuit court of Buchanan county, Missouri, against the American National Bank, to recover the amounts of their respective drafts. These suits were instituted and prosecuted upon the theory that the collections made by the Nemaha County Bank were the property of the claimants, and that the proceeds of the collections were a trust fund and that a trust was impressed upon the assets of the Nemaha County Bank wherever situated'; and that the drafts drawn for the purpose of transferring to the respective plaintiffs the trust fund belonging to them, operated as an equitable assignment of the funds on deposit in the American National Bank.
“This defendant further states that- it is holding said sum of $1179.09 and the remaining collateral notes, as aforesaid, for the persons lawfully entitled thereto, and that as said cash and notes are claimed by Clarence G. Bliss, receiver of said Nemaha County Bank of Auburn, Nebraska, as aforesaid, that the Nemaha County Bank of Auburn, Nebraska, and the said Clarence G, Bliss, should be required to intervene in this case, and that this proceeding should not proceed further until the said Clarence G. Bliss , and the Nemaha County Bank of Auburn Nebraska, as aforesaid, are made parties defendant, and the court obtains jurisdiction over, the said receiver and said bank.
“That substantial doubts have arisen as to the ownership of said funds, and notes, now held by this defendant, and that this defendant is desirous of delivering the same to the person, or persons, lawfully entitled thereto, .and now tenders into court said sum of $1179.09 and said remaining collateral notes uncollected, for further disposition under the orders of the court herein.”
The court made no order requiring the receiver to interplead. But the record shows the receiver voluntarily appeared and filed answer, in which a denial was made of plaintiff’s allegations in the petition,
The intervenor then pleaded an act of the legislature of Nebraska providing that claims of depositors for deposits not otherwise secured, and claims of holders of exchange, shall have priority over all other claims, except federal, state and county taxes, of every bank, trust company and banking institution in the State of Nebraska, and, subject to such taxes, shall, at the time of the closing of the bank, be a first lien on all of the assets of the banking corporation, from which they are due, and thus under receivership, including the liability of stockholders and upon proof thereof they shall be paid immediately out of available cash in the hands of the receiver.
The intervenor further pleaded the laws of Nebraska, authorizing the department of trade and commerce of Nebraska to take possession of the property and business of any bank, if it should have reason to conclude such bank unsafe, etc., and that said defendant should thereafter conduct the affairs of the same and retain, possession of all money, rights, credits, assets and property of every kind and description belonging to said bank, as against any means or final process issued by any court against said bank or corporation whose property has been taken, and retain such possession for a sufficient time to make an examination of its affairs and dispose thereof, as provided by law, and that any lien against such property, acquired within thirty days next preceding the taking of such possession, should thereby be released and dissolved.
The intervenor further pleaded the laws of Nebraska providing the district court of the county in which such bank was located should have power to appoint a receiver for said bank, and that after such a decree of insolvency was entered, all proceedings thereafter shall be had in said court, or before a judge thereof, with reference to the administration of said bank and the disposition of its assets.
The intervening petition further pleads that on the 14th day of June, 1929, the department of trade and commerce of Nebraska determined that the Nemaha County Bank was insolvent and that it was unsafe and inexpedient for said bank to continue in business, and that on the 14th day of June, 1929, said department took possession of all the business and property of said bank and ever since
“which were owned by said bank on the 14th day of June, 1929, and that said receiver thereby became entitled to all notes and funds in the hands of the defendant, the American National Bank of St. Joseph, Missouri, and that said district court of Nemaha county, Nebraska, thereby obtained exclusive jurisdiction to ascertain and determine all the rig'hts of all persons in and to the assets of said bank as owned by said bank on the 14th day of June, 1929, and obtained full jurisdiction to determine the priority of each and all of the claims against said Nemaha County Bank of Auburn, Nebraska, and that this court has no jurisdiction of any kind or description, over the assets of the Nemaha County Bank of Auburn, Nebraska, in the hands of the defendant, the American National Bank of St. Joseph, MUssouri, described in the pleadings in this cause.”'
The intervenor further pleaded that under the laws of Nebraska, whenever checks were delivered to a bank for collection and collected by it, the person delivering such checks for collection should have no right of priority over the depositors and other creditors of such bank, unless such items so collected increased the assets of said bank and augmented the assets thereof by transferring, or causing to come into the custody or ownership of said bank assets other than were owned by said bank at the time it shall have received any such check for collection, and even though it may be shown that such bank receiving any such collection item shall have received payment thereof, and even though such collection may have augmented the assets of said bank by the collection of such items, it shall not be allowed unless it shall be shown that the actual proceeds of the item thus collected shall be in the hands of the bank at the time the secretary of the department of trade and commerce took charge of said bank.
Upon the agreed statement of facts, the oral testimony of three witnesses in support thereof, together with necessary documentary evidence introduced, the court took the cases under advisement, later filing its decree; and still later, a decree was entered nunc pro tunc, including findings of fact and conclusions of law which were essentially the same in each case. In the original decree entered January 16, 1930, the court declared the fact to be that “The American National Bank applied and credited the sum of $11,659.12, on the said note of the Nemaha County Bank of Auburn,” which holding was found to be in conflict with the stipulation of the parties. And on March 31, 1930, the court entered its mmc pro tunc order to correct
Separate motions for a new trial filed by the American National Bank and the intervenor were overruled, and both have appealed from the orders and rulings of the court. Seven assignments of error are presented to us, namely: (1) That the court erred in exercising jurisdiction; (2) in deciding the American National Bank did not have the right to an offset; (3) in deciding that under the stipulated facts the American National Bank did not have the right to apply the money in its hands on deposit to the indebtedness of the Nemaha County Bank to it, so far as the Carson National Bank is concerned; (4) in overruling the motion for a new trial of the American National Bank; (5') in overruling* motion of the intervenor for a new trial; (6) in holding the drafts given were equitable assignments of the money in the hands of the American National Bank, and in applying the law of Missouri to the cases, as to the right of plaintiffs to a priority and a lien against the funds in the hands of appellant bank, whereas it should have been determined solely by the laws of Nebraska.
The first point for review is that of the jurisdiction of the Buchanan county circuit court to hear the cases and render a decree therein. It is urged in this connection that the Buchanan circuit court obtained no jurisdiction over the funds in the hands of the American National Bank for the reason that on June 15, 1929, and prior to commencement of this suit, the secretary of the department of trade and commerce of Nebraska, having full power over and jurisdiction to take possession of any and all state banks in the State of Nebraska,
It is insisted the Nebraska laws should govern in determining the right of respondent bank to a lien on the fund, as the transaction out of which the drafts were issued occurred in Nebraska, and there was nothing which showed any intention of the parties at the time of the execution of the contract and the issuance of the drafts that the laws of Missouri should govern; that under the laws of Nebraska, the secretary of the department of trade and commerce was an officer of that state, having full power and jurisdiction to take possession of the assets of any insolvent bank of the State of Nebraska, and when such secretary took 'possession of the Nemaha County Bank on June 15, 1930, all assets belonging to said bank immediately passed to the custody of said officer who has exclusive possession; that the money and notes in the hands of the American National Bank, subject to the rights of the lien and offset of the latter bank, was a chose in action belonging to the Nemaha County Bank and, as such, had its location and sihis in Auburn, Nebraska; that it was the duty of the secretary of trade and commerce of Nebraska to notify all banks and trust companies holding or in possession of any assets of the insolvent bank, when taken over by him; and it was provided under the Laws of Nebraska, 1929, section 16:
"No bank so notified, or knowing of such possession by the department of trade and commerce, shall have a lien or charge for any payment, advance or collection thereafter made, or liability thereafter incurred, against any of the assets of the bank of whose property and business the department of trade and commerce shall have taken possession.”
From this hypothesis it is reasoned by defendants that the money and notes mentioned were not within the jurisdiction, of the Buchanan circuit court, and that court was without right to hear and decide the case.
We are unable to accept this line of reasoning. In support of this position, defendants cite 12 C. J. 451, as a general rule in this respect, as follows:
"Where a contract is executed in one state and is to be performed partially in that state and partially in other states, it seems that the law of the place of making will control, in the absence of any other circumstances indicating the intent of the parties.”
In applying this general rule it must be held that the last clause of the quotation states a limitation that applies here, i. e., "in the absence of any other circumstances indicating the intent of the parties.” Here, we have an order or draft issued in Nebraska, directing a bank in Missouri holding its funds and notes, to pay certain amounts to the holders of the drafts. Can it be said that the per
“The Supreme Court of the United States has laid down the following rules in reference to the law governing contracts in cases in which the place of making and the place of performance are not the same. 1. Matters bearing upon the execution, interpretation and validity are determined by the law of the place where the contract is made; 2. Matters connected with the performance are regulated by the law of the place where the contract by its terms is to be performed; 3. Mutters relating to procedure depend upon the law of the forum. These three general rules have been adopted and applied by many jurisdictions in a long list of cases involving almost every conceivable kind of contract. But it is even more generally stated when the contract is to be performed in a place other than the place where it is made that the law of the place where the contract is to be performed will determine the validity, nature, obligation and effect of the contract, or in other words, in case of conflict the lex solutionis will prevail over the lex loci contractus.’*’ (Citing a long list of cases from almost every state, among them, Smoot v. Judd, 161 Mo. 673, 61 S. W. 854.) In the Smoot case, ValliaNT, J., speaking for the court, said: “The law of the place where the contract is to be performed is the law of the contract.” Defendants cite Illinois Fuel Co. v. Railroad, 319 Mo. 899, 913, 8 S. W. (2d) 834, a recent case by our Supreme Court, in support of their contention. An examination of that opinion shows it to be authority for the statement that the jurisdiction in the present ease is in Missouri. The learned author of that opinion cites 5 R. C. L., as above indicated. The same rule is stated in 8 C. J. 92, as follows:
“The place of performance of a bill or a note, that is, the lex loci solutionis, is the place of payment. Where a bill or note is executed, in one state and made payable in another, the general rule is that it is governed as to its nature, validity, interpretation, and effect by the law of the state or country in which it is payable, without regard to the place where it was written, signed or dated, it being presumed that the parties contracted with reference to the law of that place,” etc. [Citing Smoot v. Judd, supra; Commercial Bank v. Barksdale, 36 Mo. 563; Green v. Kennedy, 6 Mo. App. 577.]
We must hold the circuit court of Buchanan county, Missouri, had jurisdiction of both subject-matter and parties herein. The defendant American National Bank is located in that county and the subject-matter in question was there. The intervenor, receiver of the defunct bank, voluntarily submitted himself to the jurisdiction of the trial court and, in his petition, asked affirmative judgments in his favor and is now estopped to assert the Nebraska court alone had jurisdiction. Our attention is called to a ease in the Nebraska courts
It is insisted, under another assignment of error, that the court erred in holding the drafts held by plaintiffs, given to remit collections made by the failed bank, operate as an equitable assignment of the funds of the drawer bank in the possession of the drawee. We rule against defendants in this contention. The Supreme Court, in a very able opinion by Walker, J., in the case of Bank v. Millspaugh, 314 Mo. 1, 12, 282 S. W. 706, said:
“Furthermore, the giving of the drafts by the Bank of Oran on the First National Bank of St. Louis constituted an equitable assignment in favor of the Federal Reserve Bank for the amount of the drafts thus remitted against the funds then in the custody of the First National Bank or later turned over to the Finance Commissioner. This point has received determinative consideration in the case of the Federal Reserve Bank of Richmond v. Peters, 123 S. E. (Va.) 379, in which it was said: ‘A check is not payment until the cheek is paid, and the drawing of a draft by the Prince Edward-Lunenburg County Bank to the order of the Federal Reserve Bank of Richmond and mailing the same to the last mentioned bank in no way affected the trust already impressed. While the check was not an assignment of the fund against which it was drawn, as between the drawer of the check and the person who gave value for it, it was an equitable assignment of the fund pro tanto\ [Daniels on Negotiable Instruments, sec. 1643, p. 1852.]’ ”
In that case the facts are very similar to those presented here. To the same effect is our holding in Johnson v. Bank, 11 S. W. (2d) 1090. [See also Bank v. Millspaugh, 313 Mo. 412, 281 S. W. 733; Bank of Callao v. Bank, 221 Mo. App. 385, 277 S. W. 613; Railway Co. v. Millspaugh, 220 Mo. App. 110, 278 S. W 786.]
It is further insisted that the money and notes in the hands of the American National Bank, subject to lien and right of the American National Bank, constituted a chose in action owned by the Nemaha County Bank and not within the jurisdiction of the circuit court of Buchanan County. [Citing Richardson v. Busch, 198 Mo. 174, 95 S. W. 894; State ex rel. v. Lewis, 256 Mo. 98, 165 S. W. 319.] We have examined these opinions and find therein no ruling in support of defendant’s last contention. A chose is defined in 11 C. J. 759, as “a thing, suit; cause; personal property. It is a chattel
However the situation is different where a bank as agent for another collects money belonging to the principal; or where a bank sells a draft receiving cash therefor and there is fraud in the transaction, in that if the issuing bank is known to be insolvent at the time and its officers have reason to believe-payment of the ,draft will be refused, the money so collected remain the property of the principal or purchaser of the draft, the funds of the issuing bank in its own vaults, or in a correspondent bank are impressed with a trust in favor of the payee and the draft segregates sufficient of the funds to pay it. In other words, the draft operates as an assignment in equity pro tanto because it is drawn, not against the funds of the drawee, but against the funds of the payee. [Insurance Co. v. Cantley, 6 S. W. (2d), l. c. 972; Bank v. Quigley, 284 S. W. 166, 167; Bank v. Quigley, 284 S. W. 166, 167; Bank v. Millspaugh, 314 Mo. 1, 282 S. W. 706; Johnson v. Bank, 11 S. W. (2d) 1090; Railway Co. v. Millspaugh, 220 Mo. App. 110, 278 S. W. 786.] The distinction between the two lines of eases is readily seen. The trial court did not err in holding
There remains one other point for consideration. The defendant American National Bank contends it had the right to apply the funds in question upon the indebtedness of the Nemaha County Bank to it and that the exercise of this right defeats the claims of plaintiffs. The record shows, as above indicated, that the debt owing from the Nemaha County Bank to defendant American National Bank was not yet due when payment of the draft was refused. The testimony of witnesses is to the effect that the said note was dated March 23, 1929, due 90 days thereafter. Therefore it was not due on June 15, 1929, when the drafts were presented for payment, and, in fact, credit was not made on said note until after the same was due. Under the well-settled law of this State, even in cases of insolvency or general assignment for the benefit of creditors, there could be no offset as against him on a demand not yet due. [Huse v. Ames, 104 Mo. 91; Horigan Realty Co. v. Bank, 221 Mo. App. 329, 273 S. W. 772; Homer v. Bank, 140 Mo. 225, 41 S. W. 790.] In the case last cited, Judge Burgess, speaking for the Supreme Court, said (l. c. 239) :
“The universal doctrine is that a bank has no lien upon money standing to the credit of one of its depositors for an indebtedness to the bank not matured, although the depositor may be insolvent.” [Citing eases.]
Under these authorities it follows that the American National Bank was without right to offset its note which was not yet due at the time the drafts in controversy were presented.
The court desires to compliment counsel for all parties litigant for the splendid briefs and clear arguments presented in this case. They greatly aided the court in determining the questions involved.
"We find no reversible error of record, and the judgment in both cases is affirmed.
