112 Neb. 642 | Neb. | 1924
Appellant, the Stock Yards National Bank, of South Omaha, filed its claim with the receiver of the Brown County Bank, of Long Pine, praying payment from the guaranty fund of a certificate of deposit issued December 23, 1920, by the Brown County Bank in the sum of $7,400 payable June 1, 1921, with interest at 5 per cent, per annum, payable to E. M. Sandy and by him indorsed and delivered to appellant. There was another item presented in the claim filed, but it is not involved in this appeal and need not be further noted.
The issues were presented to the district court for Brown county. The court allowed the certificate as a general claim against the bank of issue, but denied appellant the right to recover from the guaranty fund. From the order denying recovery from the guaranty fund, claimant has appealed.
There is little dispute as to the facts. In 1919, and for a long time prior thereto, the Brown County Bank conducted a banking business at Long Pine, Nebraska, and the Stock Yards National Bank conducted a banking business at South Omaha, Nebraska, and was the correspondent bank in that city for the Brown County Bank. In June, 1919, the Brown County Bank requested the Stock Yards National Bank to discount for it a promissory note for $33,000 which had been executed by E. M. Sandy and which was payable to the president and cashier of the Brown County Bank. The officers of the Brown County Bank represented to the claimant that this note was secured by a chat
The president of the Brown County Bank does not directly admit that he acknowleged the liability of his bank for the fund, but that is the purport of his testimony. The representative of claimant who made the demand testified unequivocally that the liability of the Brown County Bank was admitted by its officers, but that they stated to him that the bank did not then have cash in hand to repay the sum demanded, and that, because of this fact, an agreement was reached under which the bank issued to Sandy the certificate here in suit and Sandy indorsed the certificate to claimant, and it was accepted by claimant in settlement of the deposit of its money realized from the sale of the mortgaged cattle.
When the Brown County Bank received the proceeds of the sale of the mortgaged property with knowledge that it was created by an unauthorized sale of Sandy’s cattle, it could not rightfully pay out the fund except on order of its true owner. Alter v. Bank of Stockham, 53 Neb. 223.
“ Under well-known equitable principles, the' defendant bank, having received the proceeds of the sale of the mortgaged property with notice of plaintiffs mortgage lien and prior claim thereon, could be held and charged as a trustee of such funds for the use and benefit of the plaintiffs.”
Under the facts disclosed, the ownership of the fund in the Stock Yards National Bank is beyond dispute. The same may be said as to its deposit in the Brown County Bank. The owner of the fund had the right to demand its payment. It'did so; but, failing to receive the same in money, it accepted the certificate of deposit which is, in fact, only an acknowledgment of the deposit. The status of neither party was changed by the issuance of the certificate, and, under the repeated holdings of this court, appellant is entitled to the allowance of his claim and to have the same paid from the guaranty fund. State v. American State Bank, ante, p. 182; State v. American State Bank, ante, p. 272; State v. Farmers State Bank, ante, p. 380; Vavra v. Claridge, ante, p. 553.
The judgment of the district court is reversed and the cause remanded, with directions to enter a judgment in accordance with this opinion.
Reversed.
Note — See Banks and Banking, 7 C. J. secs. 15 (1926 Ann.) 134; Chattel Mortgages, 11 C. J. sec. 347.