*1 degrees affairs, of nnsoundness of and all other ing bis mind— important that the jury, it is the issues in the submission might fully as were or be jury informed as to elements general “sanity” and “in- the case under terms involved that been restored to appellant well the element sanity” as as appellant’s no error in the his mind. There was refusal 1, 2, 7, asked. requested numbers as instructions appellant, assignment, complains The for final that the last given by C-l, motion, of Instruction the court of its own paragraph requested D, given by respondent, were in con and Instruction as flict, jury might the other —that have found one way way under im under one and another the other —and that it is tell possible to which instruction it did follow the verdict re fact, conflict, "We been discover turned. have not able to suggested appellant When the is as that his brief. law considered, appellant what is claimed a conflict to be between not, fact, a conflict. appear By the two does what was paragraph held with reference the last of Instruction C-l and D, what was said and held with reference'to Instruction when under discussion, apparent grounds upon is which appellant contends that there was a between conflict the two instructions have imaginary only. complaint no foundation fact and are The is against ruled appellant.
On account of paragraph the error in the second of Instruction C-l, out paragraph judgment set this opinion, below should be reversed this causS remanded for another trial. The judgment is, accordingly, reversed; below and the cause is remanded C., for a new trial. Campbell, concurs.
PER foregoing opinion Reynolds, C., adopt- CURIAM: The is opinion ed as the judgment reversed, court. and the cause is remanded for another trial. All concur. Deepwater, Bank of Appellant,
Farmers Moberly, v. H.O. Com- Respondent. (2d) S. etc., 78 W. 906. of Finance, missioner City Appeals. January Kansas Court 1935. *2 Hassett Dewey Silvers, Chas. E. Parks, Elmer B. Thatch, Jas. A. P.
n andArnold Conrad for > appellant. Eaysler Pogue respondent. Floyd Sperry A. L.
REYNOLDS, depositor C. This is an action affairs, bank’s of a presented liquidation claim for allowance n commissioner, for of a in the hands of the defendant bank, while a of such based failure going concern, presented there- check depositor’s drawn for. banking corpora- is a the record that the doing Missouri, Deepwater,
tion business at and that was such *3 mentioned herein doing was so business all the dates and times at credit, sub- 1932, deposit it had to its 19, on November ject Savings check, Company— the & Brinkerhoff-Faris Trust be- Savings Company at such time the said Brinkerhoff-Faris Trust & ing banking Clinton, at Mis- doing corporation also a plaintiff 1932, drew 19, $2714.78. On souri —the sum November Trust n & Savings $2500 its check for said Brinkerhoff-Faris against and' delivered the Company said and endorsed - Na- with the Drovers same for collection for its credit to and bearing check, City, tional Bank in Kansas Missouri. This the endorse- the the cancelled endorsement of ment and likewise plaintiff by thereon, National Bank the Drovers returned following slip at- unpaid printed Drovers National Bank with the tached thereto: meeting Brinkerhoff-Faris
“At Board of Directors 21, Savings 1932, following Nov. Company & held on resolu- Trust unanimously passed: ‘Resolved, a limit of ten dollars tion was day beginning per placed deposits, on all Tuesday be withdrawals 1932; being morning, 22nd, November this action deemed advisable in for protect funds of this institution the benefit of "all order t depositors. “ Savings Co., Trust & ‘Brinkerhoff-Faris “ Faris, President, H. P. ‘By “ Vice-President. McGeehan, ‘Paul n “ Finks, H. F. ‘Attest: Cashier.’ being “This cheek returned under above resolution Savings Company Clinton, Missouri, & Brinkerhoff-Faris Trust n funds, way and not on account of insufficient and is no to be con- maker.” sidered a reflection on the Bank cheek npon
The endorsement of Drovers National said 21, 1932, under date appears of November while cancellation appears 1932. The 23, such endorsement under of November date presented Savings check & Brinkerhoff-Faris Com- to the Trust pany 22, 1932,. payment:thereof between such November dates on refused it because it was drawn for an amount in excess of -the > provided by resolution, limit of it therefor as above shown. February On 6, 1933, Brinkerhoff- the assets and affairs of n & Savings Faris Company Trust taken in defend- were Moberly, O. H. Missouri, ant State finance commissioner of the n liquidation having as an institution, failed and closed date, its doors. From such its assets and affairs in process have been liquidation commissioner; of the defendant finance and it will be convenience, hereinafter to, referred as the bank.
On November its board of direc- tors, adopted following resolution, to-wit:
“Besolved, day that a limit of per placed ten dollars on all with- deposits beginning drawals of Tuesday morning, 1932; this action protect deemed advisable in order to the funds of this institution for the benefit all depositors.” following also the record its minutes:
“November 1932. We, undersigned, join hereby do other members of the board of directors the Brinkerhoff-Faris Savings Trust & Company in passing calling a resolution for and declaring a .thirty moratorium of days, failing get City Clinton, Council of Missouri, to order such moratorium,s to vote to close 'the doors of the said Brinkerhoff-Faris *4 Savings Trust & Com- pany, and turn over to the Honorable Commissioner of Finance record, and that we special authorize a board to present us as voting for (Signed) said resolution. H. Faris, Lingle.” P. G. C. appears It that, at time, such H. said P. Faris Lingle and G. C. were, respectively, president the vice-president and the of the said Savings Brinkerhoff-Faris Trust & Company.
On 25, November 1932, request of certain officers of the liquidating .bank, city adopted the council of Clinton a resolution directing mayor, the Sperry, Honorable L. Floyd to issue his proclamation declaring day thirty holiday a for all banks and trust companies city, beginning in the morning 25, 1932, November issued, proclamation which accordingly and all such banks companies trust requested same; were to observe the appears and it have been liquidating bank, observed part in fully. but not It appears stipulations parties of that, following the record adoption 21, the resolution of November the doors of such opened morn- bank were as officers on the usual its directors and ing charge 22, 1932, it, such officers November directors, succeeding day, day transacted and the business on that usual, against if de- except pay checks, any, it failed to demand posits $10 where such checks where the total amount exceeded any against $10 of the drawn exceeded cheeks one account day. The record or amount checks fails to show the number twenty-second presented, any, morning if to and from the including twenty-fourth, plaintiff’s. November other than being and, legal date; such holiday, it remained closed declaring proclamation mayor after the issuance of the moratorium, days, it beginning 25, 1932, thirty re- November February 6, 1933, mained closed until the defendant at time charge. appears State further commissioner finance took it in It that, February 6, all of its until such date of such bank and charge who, during directors, assets remained in of its officers and converted certain some its assets into cash and made employees disbursements on account to its officers and of salaries items; for other at the time the on said date and charge by commissioner, bank was taken in the defendant plaintiff’s deposit on $2714.78 remained in said bank as it was 19, 1932, remained, subject November and had thereafter to check. Statements financial condition bank’s 22, 1932, February 6, 1933, and on in the appear record. 10, 1933, plaintiff deputy
On June filed commissioner of finance, liquidating bank, its verified claim for total amount with said at the dates mentioned $2714.78, seeking $214.78 above in the sum of there- the allowance of preferred of as a common claim and of as a claim thereof preference. to a one entitled deputy that the approved commissioner allowing thereof, $214.78 claim full amount as a common certifying claim and the balance thereof to the circuit court for ad- judication preference sought as to the therefor.
Upon hearing court, latter claim the entire was allowed claim; any part classified as a common and the classification of preferred denied; entitled thereof as or as judgment was rendered. effect judgment, plaintiff, From such adverse after an unsuccessful motion trial, appeals. new for a
Opinion. its by plaintiff that, because it had to credit is contended deposit liquidating payment of bank for the sufficient funds on 600 on bank had because such presented it was on the date its cheek it, it be- pay with which to in cash that time sufficient assets
hand at check; that, upon pay such duty liquidating of came the check of amount so, it thereafter held the failure to do bank, pass- assets of the that the plaintiff; in trust for augmented hands ing commissioner’s into the defendant trust, such impressed with check, passed the amount such bank, of said affairs liquidation in the which, reason „its in the check amount preference to the plaintiff is entitled to depositors other claims of claim over the payment order basis. or some similar upon the same pre- was check if, at the time the well made That such contention is transacting with its business open sented, liquidating bank was and with of law process and affairs unaffected liens assets be the seems to possession charge of its officers a check duty pay a bank to law Missouri. That it is settled depositor where such upon and demand depositor presentation of a check a sum sufficient deposit has to his account on appellate and other Supreme Court has so often declared been open longer be considered that it is no courts of the State (Mo. App.), v. Farmers’ Bank of Clarksdale question. [Johnson (Mo. Cantley App.), S. W. (2d) 1090; v. S. W. Claxton 975.] fails or where the bank refuses It is likewise settled circumstances, it, by operation law, a cheek under such to the amount refusal, depositor’s holds funds such failure or the assets and that depositor in trust for the such check as trustee failure, and, upon impressed such trust bank become of the finance augmented thereby, into the hands assets, passing trust, from all of which the commissioner, pass impressed with such depositor thereof payment in the his have such claim allowed bank follows and assets of the payment priority classified as one entitled Poplar Bluff liquidation results. v. of the bank’s affairs [Bank 733; Cantley, supra; v. 313 Mo. 281 W. Claxton Millspaugh, S. (Mo. (2d) 532; Bank S. W. Commerce App.), v. Miller et al. Hiatt (2d) Exchange Bank, 61 W. Co. v. Farmers’ S. Trust 928-930.] liquidating bank ease, appears that the From in this the record transacting with its and affairs in the open assets It likewise presented. at the time the check hands of its officers credit, to its that had sufficient funds liquidating bank, subject check, the check when denied; payment thereof was and that the presented; and, with which to funds at the sufficient if demands, any, discloses, pay all other far as record *6 a lien bad Plaintiff thereafter had presented. been were liquidating bank in the amount thereof for npon the assets of the subject is no payment thereof, immediate enforcement. There the liquidating showing bank time, the assets of the were that, at such hands process passing law. Its assets into the affected liens or of satisfy plaintiff’s with which of the commissioner were sufficient preference appear claim. It would that therefore governing in preferences was the law complete became and under in under the circumstances shown such eases. presentation of check and the the record became fixed (Authorities supra.) it. failure of commissioner, But, contends the at such defendant preferring insolvent such check without and could not required depositors other not therefore be over and could so. Defendant further that its officers had do commissioner contends opening adopted resolution, going into effect deny morning 22, pay November that the bank would any any against any of its depositors ment check drawn account of aggregating day $10 for more than or checks more than any one against any any day posted copies account for and one and place notices doors windows resolution such, itself, conspicuous places; business and at other that was an insolvency; payment act of that it thereafter refuse of all did Such, presented day however, $10. cheeks more than inability upon did not show the bank to the checks part presented depositors full, presenta order of their tion, and, therefore, itself, insolvency; did show nor required equivalent by law, notice to the effect its affairs that charge statute, commissioner, which, were of the finance under our insolvency. would been an act Revised Stat [Section Moreover, adoption posting utes the mere fact of the 1929.] such notice and refusal of the bank to than was more limited not, fact, said resolution did render the bank or contemplation show it to be insolvent within the of the law when it charge through with its assets continued and affairs in of its officers day 22, 1932, thereafter, throughout out entire November twenty-third, transacting business, receiving its usual deposits, paying cheeks, though even as limited in its resolution. From 24, public holiday, November it remained closed with its assets possession affairs in February 6, of its officers until space days, of two months and twelve when its assets were charge liquida taken in the defendant finance commissioner for tion institution. February From officers, assets, while in of its its officers certain reduced expenditures made certain $25,000, to cash and
approximately items. during and other sueb time expenses assets for incurred and decreased way deposits in the its liabilities increased also payable. its liabilities of bills payment -3, banks, subdivision reference The statutes of this State *7 directors for the 1929, provide 5316, Revised Statutes section and affairs its assets place managing institution to officers of such an commissioner, which finance charge control of the in of under the upon posting closing place of business by simply its be done may effect a notice to the place of of business the front door such When finance commissioner. in hands of the this bank is by its commissioner in the finance placed institution is commissioner, its assets charge by finance or is taken in directors alike; it creditors the benefit of all in trust for- are then held demand due without depositors all become is then that the claims of payment. basis of before, upon the same placed and are to be institution is found provides that, 5318 when such an Section immediately place shall thereof failing condition, in a the directors therefore, the said If, in of the finance commissioner. it 22,- 1934, course liquidating bank That was provided by statute should been followed. right have been only plaintiff’s preference could manner in which cut out. charge of its long bank open remained
So unhampered assets, transacting officers with sufficient cash by by presented, when drawn de process law, pay liens checks them, pay it was re positors sufficient funds to their credit to liquidating quired long as the presented. them as So transacting open and remained had sufficient assets with which to business, good faith be insolvent and refuse it could not claim in required long it was pay. open pay, and able to So as it right ground pay. It assert a of refusal could not for insolvency; neither defendant commissioner now do so can the insolvency a its to defeat it or assert defense based on by the record. under the facts as shown law, going concern, A contemplation bank “is a long company possession, in its un so as the remains property National Bank process [Alberger v. affected liens or of law.” And, 319, while such Commerce, 123 Mo. l. c. S. W. 657.] management of affairs continues. exists, condition its its management (Same.) its property Its and business are under the directors. section fact that its Statutes 5363.] [Revised going con chargeable that, a assets are with all its debts while charged such assets to cern, apply trust its directors are good long faith, all such debts does not as it acts right, affect its so to determine to shall or to de- applied which of its debts its assets disposition termine the application and to be made thereof usual and ordinary course its business. would follow its in the therefore course conduct
management affairs, lay establish can foundation for the ment creditors liens its assets. preferential of a nature Upon consequent business, failure and cessation its directors continue to hold its stock assets the benefit creditors and, long possession holders assets remain their exclusive control, may reduce them to cash and its creditors. The statute law of Missouri determines the when the time cease; when, of control of its assets bank shall and that time is failing condition, places the same the hands commissioner liquidation. Statutes sections [Revised 5318.]
Chapter 34, inclusive, to 8 articles constitutes an exclusive code *8 relating (Commerce banking to banks business of and the State Company Exchange Trust Bank, supra; v. Farmers’ 5282 Sections to 5285 inclusive, 1929; Exchange State v. Revised Statutes Farmers (Mo.), (2d) 132; 56 129, (Mo.), S. W. Bank l. c. Kirrane v. Boone (2d) 861; Songer 66 W. (2d) S. Bank 62 (Mo.), Commercial v. S. W.
903; (Mo. Songer App.), (2d) Commercial Bank v. 74 100); S. W. provisions noted, made, by therein only above are the ones management a bank may which relieved of the and control assets, affairs, though business, failing in a even condition. Such provisions provide placing for such banks of the finance liquidation, being held, they however, commissioner for it are suf ficiently complied when the bank places with insolvent its affairs and assets, liquidation, for of purpose ápproval with the of commissioner, bank or some other trust work company ing supervision, under his 272 Tindle, as Citizens Trust v. Company 681, 1025; 199 Exchange (Mo.), Mo. S. W. Bank v. 14 Turner S. 425; (Mo. (2d)W. Farmers’ State Bank v. Miller App.), S. W. 834; question but such is herein. latter not involved insolvency by
There was no act of bank within contemplation law, 5318 or section other shown to been made have by it, by plaintiff’s payment which check his suspended demand was or defeated.
It is prohibits true that section Revised Statutes assignment any general, voluntary for benefit of creditors or assignment insolvency by the commission act of other after a bank; question but, explained, as is hereinbefore not involved question primarily in this case is as to a herein. The involved by behalf reason in its own creditor by a asserted preference, obligation it, discharge its liquidating bank to of the failure going concern was a liquidating bank law, required by while the as was able pay which to cash assets it had the and when plaintiff’s which fixed pay, under circumstances such circum claim; and, under payment order of by the its assets voluntary assignment of question stances, no assignment is in any question If
liquidating bank is involved. law, all the cir operation character volved, it is of forced go long as it was a that end. So conspiring to cumstances involved assets sufficient cash and with its assets ing possession concern in regarded it could be presented, the demands of its creditors 56) ; (2d) 51 S. W. County Cantley (Mo.), (Boone v. only as solvent open demand, it was refusing when plaintiff’s action in bank was not an act of pay, had cash with when it good faith made act and not ruptcy. arbitrary It was mere though 5318. Even by section insolvency, contemplated reason of would plaintiff’s check bank payment of not It could insolvent, payment. it was not excused become pay. Neither could long insolvency open as it was and able assert assert commissioner now so it; can its directors nor the defendant preference. it, claim for at least as defense insolvency Besides, of date there is no evidence except as it concerned, as that at other or, so far taken over as may be inferred from the fact that commissioner, other February 6, the finance others; but, at the time pay plaintiff’s refusal than its check ample in cash check, funds pay plaintiff’s of its refusal to doing with its assets in the open which to it did not have officers. It did refuse to because hands *9 arbitrarily pay when refused to pay cash assets with which to but condition of date The of its financial able. statement record the face, it insolvent at not, upon does its tend to show to upon hand, show it solvent and tends, that date but the other to destroy arose from the action the any inference that otherwise shown, Besides, as its re pay. and from its refusal commissioner to regarded as a refusal to pay plaintiff’s pay fusal to cheek is not to ample had funds grounds insolvency, on for the reason that it the insolvent, sense that pay was not at least the with which to and charge by payment. If taken in the excuse from that it was would February 1933, may be con finance commissioner on defendant tending on prove that it was insolvent Novem sidered as evidence to doing business on that date and still, open it was ber check, which, plaintiff’s with other cash with which to the any in- noted, to overcome sufficient in the record before was facts arising and to confer insolvency date therefrom on said ference sought. right preference as to bank, its ability debts solvency, applied to a means If as insolvency ordinary business, per- then course of in the usual ordinary course inability to in the usual and means its debts force County Cantley, supra.] v. of business. [Boone bank, liquidating board of directors of
The action of the account, daily drawn one $10 the limit of to be placing payment its cheek plaintiff’s could not affect to demand pay its refusal of upon therefor preference for or its placed facts record. The limit thus ment, under in this upon without arbitrary part the officers act mere authority liquidating If insolvent and unable law. bank was course, for only depositors in the course it its usual placed pursued was at ceased business and its as have once have directs; for, long as statute sets with the commissioner legal open, required pay all demands as it remained it was do; might and, presented, long as it had cash assets which it so insolvent. so, By it not have been the course able to do could diligent present creditors to pursued, laid foundation entitling them, by operation payment in their claims for the manner Equity re law, payment if thereof was refused. diligent. wards the by points have defendant com
We considered the made They mainly authorities cited. relate missioner in his brief and the in insolvency question to the of when a bank is is right, thereof, prefer solvent to the lack matters, questions which creditor over another and other related light other been discussed herein in the of such and authorities. The question here, primarily preference, is as however, as to the depositor whereby demand for the serted under circumstances timely as, made so made re payment thereof, it, holding fusal convert the debtor into a trustee trust, whereby deposit in the assets of the bank were impressed therewith. not affected pro claim is the moratorium mayor Clinton,
claimed referred to in record. This mora torium was not in effect on November the date 22, 1932, plaintiff’s rights respect to its claim were fixed under the facts existing unnecessary law. therefore to consider whether legal, illegal, wisely made, such moratorium was or otherwise. Neither important is it to consider for what reason the *10 requested the delayed, moratorium it what under cover there finance commis
of, place in tbe to its affairs tbe bands of defendant rights fixed before tbe moratorium bad became plaintiff’s sioner. Tbe liquidating bank prior delay thereunder. Tbe was asked and 24; and, to November not, event, prior in its doors did close them, have ceased business appear it did close it does not when commissioner. its of the defendant surrendered affairs into tbe bands made, February changes were many From November material liabilities only respect but with to its respect to its assets resources, changes comparison of a mere the two statements showing first on November the record the conditions its affairs Its February 6, 1933, on total re later will reveal. $599,152.60 on the also sources date were shown to be as were first they its liabilities, total the later date were shown be while on transacting during $587,607.29, so that must have been period it now claims that its closed.-.During to have been out; shape on practically wiped cásh hand was its assets reduced; deposits practically notes were its in other were banks eliminated; increased; deposits its payable were bills reduced. that, during
The fact February the time from November endeavoring reorganize its officers were secure additional funds, if no fact, why such be the is reason there should have been delay in the placing its affairs in the hands of the defendant com reorganization missioner. Such could been made or additional secured, desired, funds if placed after its affairs had been of the defendant commissioner. depositor preference to a under the circum
stances shown the record rests principles sound firmly by law; deprived secured and he cannot be said the ar bitrary action his banker. To might hold otherwise and that a bank recognize be, refuse effect, permit would the bank, by continuing of its ostensibly open, assets and ultimately depositor to deprive a money deposit of his dispose and so to assets depositor would his lose claim. Such cannot the- law. equity. Neither can it be from what has been that the court below erred' judgment refusing preference plaintiff’s claim for $2500 of the liquidating judgment and that the should be re
versed and the cause remanded with directions to judgment enter on such claim in judgment favor. The is, ac cordingly, reversed; and the cause is remanded with such directions.. Campbell, C., concurs. is;
PER foregoing opinion CURIAM: The of REYNOLDS,C., adopted opinion as the judgment the court. The is reversed, and the cause is remanded directions. All concur.