126 Neb. 34 | Neb. | 1934
Lead Opinion
The American State Bank of Springfield, Nebraska, is in the hands of receiver for liquidation and Reva Grell, by Exilda Grell, her next friend, filed a petition of intervention in the proceedings seeking to have the sum of $489.64 declared a trust fund payable in preference to the claims of general creditors. The receiver classified the claim as a preferred claim but declined to allow it as a trust fund payable in full. Upon appeal to the district court the classification of the receiver was set aside and the claim established as a trust fund payable in full before the claims of other creditors, and the receiver appeals.
The facts necessary to an understanding of the question presented are not in dispute and are substantially as follows : On April 2, 1926, in a divorce action then pending
“It is therefore further ordered, adjudged and decreed, that the defendant, Fred Grell, Jr., pay to E. N. Christianson, who is by this court named trustee, who is required to give bond in the sum of $2,000 with surety to be approved by clerk of this court and make report to court once each year, the sum of $1,700 in cash, which is computed as the present worth of the allowance provided in the former decree, which is herein vacated, which said payment to said trustee by the defendant is in lieu of the provisions of said decree as to allowance, herein revised and vacated. That said money in the hands of the trustee shall be a trust fund for the support of Reva Grell, minor child of the parties, and the trustee shall pay out of said fund, with accumulated interest, the sum of $120 on April 1st and October 1st of each year, beginning with the month of April, 1926, to Exilda Grell, mother of said minor, for the support of said minor child.
“That said fund shall be kept on deposit in the American State Bank of Springfield, Nebraska, at the current rate of interest protected by the state guaranty fund, until further order of this court, and be evidenced by time certificates of deposit renewal April and October.”
E. N. Christianson, appointed trustee by the court, was also the cashier of the bank, and therefore occupied a dual capacity with reference to the fund in question. In receiving the fund from Fred Grell, Jr., he acted as trustee under the order of the court, and in receiving the fund for deposit in the bank of which he was cashier he acted as agent of the bank. In this situation the . bank must be held cognizant of all the facts within the knowledge of the trustee, with reference to the transaction in ques
It is the claim of the intervener that the fund in question was deposited in the bank for a specific purpose, to wit, to be paid out in semiannual instalments to the intervener; not that it was a special deposit but a specific deposit, the distinction being that in the former case the fund is to be held intact and returned in specie, while in the latter the fund may be intermingled with the general assets of' the bank, but is to be applied only for a certain purpose. In either case the fund may constitute a trust entitled to preferential payment over general creditors.
Whether or not a deposit is general or specific depends upon the terms of the contract at the time. In re Warren’s Bank, 209 Wis. 121.
Counsel for receiver cites the case of Reichert v. American State Savings Bank, 264 Mich. 366, to the eifect that money deposited in bank to be used for a specific purpose did not make it a trust fund, “but it would become trust fund only if deposited with understanding that it should be set apart for particular purpose, and not mingled with other money of bank.” (249 N. W. 876.) In that case the contract was that all funds deposited in excess of $3,250 were to be transmitted to the bank’s correspondent in Chicago in the ordinary course of business. While the holding in that case was undoubtedly
Counsel for receiver cites a number of cases to the proposition that money deposited in the bank as a general deposit by a guardian or trustee, known to be such by the bank, cannot be considered and paid as a preferential claim over other depositors; the mere knowledge of the bank of the character of the fund will not raise a trust. This proposition may be conceded, but it begs the
In the case at bar we have the following special circumstances bearing upon the nature of the deposit: (1) The fund was established for the benefit of Exilda Grell for the support of the minor; (2) the court appointed Christianson as trustee of the fund; (3) the court ordered the fund deposited in the bank to be paid out in accordance with the order of the court; (4) the fund was accepted by the bank with full knowledge as to the specific purpose to which it was to be devoted. We think under these circumstances the deposit cannot be said to be a general one, but for a specific purpose, for the benefit of a third person, and that by the acceptance of the deposit the bank became the trustee of that third person, and that the claim should have preference over the general creditors of the bank.
It was held in Officer v. Officer, 120 Ia. 389: “A specific deposit exists when money or other property is given to a bank for some specific and particular purpose, as a note for collection, money to pay a particular note, or property for some specific purpose.” In order to create a specific deposit, it is not necessary that the fund be kept intact as in the case of a special deposit, but it is sufficient if the deposit is made with the agreement or understanding with the bank that a sum equal to the deposit shall be forthcoming for the special purpose intended.
The case of State v. Farmers & Merchants State Bank, 125 Neb. 437, was in many respects like the case at bar.
It would seem that there is greater reason for holding the. deposit in the present case to be a special deposit than in the case cited, in view of the fact that it was to remain until, further order of the court; however, we prefer to treat it as a deposit for a specific purpose.
The .conclusion we have reached finds support in the following cases cited by appellee: State v. Farmers & Merchants Bank of. Kennard, 118 Neb. 495; Morton v. Woolery, 48 N. Dak; 1132; Village of Monticello v. Citizens State Bank, 180 Minn. 418; Reichert v. Midland County Savings Bank, 254 Mich. 551; In re Warren’s Bank, 209 Wis. 121, in which case it was said: “It seems to be well settled that a deposit made in a bank for a
The receiver objects that in the cases just cited the bank was to distribute the fund. If this objection has any force it is answered by the requirement of the court order that certificates of deposit be issued by the bank payable April 1 and October 1 of each year; that the bank was so directed, rather than to pay direct to Exilda Grell, creates no valid ground for distinguishing those •cases.
We think the present case falls clearly within the principle announced by this court since the argument: “Where bank accepted check with knowledge that it was deposited for specific purpose of using proceeds to pay for cattle, deposit held trust fund to which payee of check given for purchase price of cattle was entitled to preference on bank’s insolvency.” State v. Bank of Otoe, 125 Neb. 530 (quoting from 251 N. W. 111).
Other matters referred to in the briefs do not seém to require discussion in view of our holding on the main point.
We find no error in the record and the decree of the •district court is
Affirmed.
Dissenting Opinion
dissenting.
The facts in this case are correctly set forth in the majority opinion and I will refer to them only in so far as it is necessary so to do in explaining the reasons for my dissent.
It appears that one E. N. Christianson was appointed trustee of the fund involved herein by the district court
If the bank had full knowledge" because of the fact that Christianson was also cashier of the bank, it certainly knew when it accepted' the fund that it was doing so under the directions of the court as contained in the order set out in the majority opinion, and which provides conditions that clearly make it a general deposit. Mere knowledge of the nature and purpose of the trust fund is not sufficient to make the bank a trustee. Diehl v. Johnson, 123 Neb. 699. In the case of Commercial Nat. Bank v. Smith, 244 N. W. (S. Dak.) 521, it was held that a trust fund did not exist, for the reason that there was no allegation or proof of an agreement by the bank that the deposit was to be held other than as a general deposit. In the case of In re Warren’s Bank, 209 Wis. 121, cited in the majority opinion, it was held: “A deposit in a bank is general "or special, depending upon the contract of the parties at the time the deposit is made. It is presumed to be general in the absence of an agreement to the contrary.” In Reichert v. American State Savings Bank, 264 Mich. 366, it is held: “That money deposited
To hold that knowledge of all the circumstances in this particular case makes the bank a trustee of the fund when that knowledge of itself discloses that the order of the court creating the fund provides for a general deposit of the funds appears illogical as I view it.
The fact that the order creating the trust provided that the certificates of deposit were to fall due on certain dates does not indicate that the fund was to be distributed by the bank. This provision was for the convenience of the trustee, Christianson, whose duty it was to distribute the fund on the same dates the certificates of deposit became due. The court order expressly says that the trustee shall make the payments from the fund.
The creation of a trust fund is contractual in its nature, and for a court to hold that'a trust fund could be created without an agreement or understanding, express or implied, gives the trust fund rule an interpretation, in my judgment, that is not supported by reason or by the authorities. Knowledge that a fund is deposited for a specific purpose should be accompanied by an agreement or understanding with the bank that it is accepted as such.
The rule seems to be almost universal that a special deposit is always the result of a special agreement, express or implied,' between the bank and the depositor, whereby the bank becomes the disbursing agent to carry out the special purpose of the depositor. In the case at bar, if the depositor, Christianson, carried out his instructions given him by the court, and I believe he did to the letter, the deposit could be nothing other than a general deposit. In the face of these facts, mere knowledge by the cashier of the bank could not change the debtor and creditor relationship thus established.
While I respect the opinions of the other members of the court sitting on this case and know that they have given it their serious and earnest consideration, yet I feel that the trust fund theory is being extended by the majority opinion to such an extent that it is unfair to the .general depositors of failed banks. In my judgment the rule announced is not supported by the authorities and (Should not be adopted as the law of this state. For the reasons herein set out, I am obliged to dissent.