61 So. 857 | La. | 1912
Lead Opinion
The state seeks to recover two sums (of §100 and §2,076.77), aggregating §2,176.77, with interest, as money received for its account by John A. Perkins, then sheriff and ex officio tax collector of Calcasieu parish in payment of taxes, and paid by him to the defendant in discharge of his personal obligation.
Defendant alleges that Perkins drew a check for §100 in the usual course of business, and received the money for it. It further alleges that on March 31, 1904, he gave defendant a check for §2,076.77 in payment of his note held by defendant and bearing good indorsement, representing at the time that the commissions due him on taxes collected exceeded that amount, and that defendant had no knowledge that the funds drawn against belonged to, or that the drawer of the check was short in his accounts with, the state, and it denies that all the funds deposited to the credit of John A. Perkins, or of John A. Perkins, tax collector, were state funds, or that any portion thereof was improperly diverted to its knowledge. It alleges that, on the contrary, as soon as it learned that said Perkins had failed to make settlement with the state as required by law, it refused to pay him about §30,000 which he had on deposit as tax collector, and notified the officers of the state that he had made demand for payment, thus enabling the state to secure said amount. It further alleges that the Governor and Auditor were negligent in not requiring said Perkins to make his settlement as provided by law; and that if, when he paid his said note, he was in defaidt, the state by the laches of its said officers enabled him to make representations to the contrary and to cause respondent to part with valuable security; wherefore it pleads that the state is now estopped to assert the claim here set up.
The two checks in question bear date, the one for §100, March 3, 1904, and the one for $2,076.77, March 31, 1904. They are both payable to the order of defendant; and whilst defendant’s then cashier testifies that defendant derived no benefit from the cheek for $100, he does not deny that it received the proceeds, and he does not say what disposition it made of them. Both checks were signed “John A. Perkins, T. C.,” and the evidence shows that they were paid from the account kept in the name of “John A. Perkins, Tax Collector.'” Mr. Perkins himself testifies, in part, as follows:
“Q. Mr. Perkins, what was your custom relative to keeping your account as tax collector; did it contain only the net amounts, less your commissions, or did it contain the amount that you had collected, including- your commissions— the gross amount of your collection? A. I deposited it all in the name of Perkins — everything that was collected.”
According to the evidence in the record, “John A. Perkins, Tax Collector,” had the following amounts deposited to the credit of his accounts in different banks on March 31, 1904, to wit:
Lake Charles National Bank......§10,933 76 First National Bank of Lake
Charles ....................... §16,519 12
Calcasieu National Bank of Lake Charles....................... §36,837 49
Total ....................... §64,290 37
He was asked whether he had any data by which he could show the balance to his credit in the Bank of Baton Rouge, and he replied that he had no such data with him. He was, however, permitted to testify over the objection- of the state, to the best of his recollection, that it was over $4,000. What may have been the amount of such balances on March 3, 1904, is not shown, save in the case of the Lake Charles National Bank, where it was §2,442.42. The record contains the following admissions:
“First. That John A. Perkins was sheriff and ex officio tax collector of the parish of Calcasieu, state of Louisiana, from June, 1900, to June 14,*884 1904, and that the board of directors and other employes of the Oalcasieu National Bank knew him so to be.
“Second. That it first became suspected by the officials of the State Auditor’s office soon after the 10th day of April, 1904, that said John A. Perkins, as tax collector, was short m his accounts, owing- to his failure to make settlement as required by law, and the Governor of the state was soon afterwards notified of the fact by the Auditor.
“Third. That said John A. Perkins was legally suspended from the office of sheriff and tax collector, under article 223 of the Constitution, by Newton, C. Blanchard, Governor of the state of Louisiana, on June 20, 1904.
“Fourth. That said John A. Perkins left the state of Louisiana on or about June 14, 1904, and did not return to the state of Louisiana until the year 1909.
“Fifth. That the annexed statement of account between the said John A. Perkins, as tax collector, and the state of Louisiana, as shown by the books of the Auditor of the state of Louisiana, shows the amount, exclusive of interest, by lum to the state of Louisiana, to be $0,(01.60, that, m addition thereto, he is still indebted to the parish of Calcasieu in his capacity as tax collector approximately $2,610, and to the parish board of [school] directors of Calcasieu parish approximately $506.50; and to rb® Fidelity Irust Company, in his capacity as “«collector approximately $5S4.50.
said ^Tnh'nTilat-n>alli -tbe above sums> due by the A". Perkins, as tax collector, to the state of Louisiana, to the parish of Calcasieu, íu boal’d of (school) directors, and
the Uidelity Trust Company represent the balances due upon various taxes and licenses collected by him for the accounts of each prior to the 14th day of June, 1904, exclusive of the interest upon said sums.”
It is shown that in certain consolidated cases pending in the district court judgment was rendered in August, 1904, against Perkins in favor of the parties named and for the amounts specified here below as for taxes collected for the accounts of said parties, to wit: State of Louisiana, $60,303.79 (subject to a credit of $2,753.25); parish of Oalcasieu, $7,759.21; parish board of “(school)” directors, $1,470.86; Fidelity Trust Company, $1,84S.25; and that by reason of amounts collected and credited thereon the balance due the state was reduced (at the time this ■suit was instituted) to the amount admitted to be due, to wit, $5,701.86.
Opinion.
“Although the relation between a bank and its depositor is that merely of debtor and creditor, * * * jf money deposited belonged to a third person and was held by the depositor in a fiduciary capacity, its character is not changed by being placed to his credit in his bank account.” Nat. Bank v. Life Ins. Co., 104 U. S. 54, 26 L. Ed. 693.
The law of this state contemplates that the tax collector shall go to the state, parish, or other officer representing the beneficiary of the tax collected by him prepared with the whole amount so collected at his command to make his settlement for such collection, and that the deductions to which he may be entitled for commissions or otherwise shall be made contradictorily with such officer. Act 170 of 1898, §§ 76, 77, 78, 79, 81, pp. 379, 380, 381. The section 79, thus referred to, for instance, provides inter alia:
[3] “That if any tax collector fails or neglects to make a settlement provided by law, he shall forfeit commissions so allowed him, and interest at the rate of 5% per month of the sum withheld; * * * and any tax collector who, having made his monthly or quarterly settlement, as provided for in this act, or. in any other acts, shall fail immediately to pay the amount so ascertained to be due into the state or parish treasury, and obtain the treasurer’s receipts therefor, shall, in addition to the forfeiture of commission and interest as aforesaid, be subject to the penalties provided for embezzlement and to removal from office.”
If, however, the tax collector can in advance of any settlement with the beneficiary of the tax or its representative lawfully appropriate and expend for his own purposes such amount of the taxes collected as he may determine is, or will be, due him as his commission, the law thus quoted, providing for the forfeiture of his commission in the event of his failing to make settlement and payment, will find no application, since he cannot forfeit that which he has already lawfully appropriated, and expended. In the case of State v. Jahraus, 117 La. 286, 41 South. 575, 116 Am. St. Rep. 208, where it appeared that the same tax collector came to New Orleans in the early part of 1904, and gave his check, signed, “John A. Perkins, T. O.,” to the defendant Jahraus, and that the check was paid from funds deposited (probably in one of the banks hereinbefore mentioned) to the credit of John A. Perkins, T. O., it was said by this court that the defendant (who was not, as in this case, the custodian of the funds drawn against) “must be held to have known that the sheriff had no right to dispose of the fund except to make settlements with the state,” and that the state was not estopped to recover the money paid to him from said fund by the alleged laches of its officers. The court also' found that the evidence failed to show that the balances in bank to the credit of the tax collector exceeded the amount of his indebtedness for taxes collected by him. We adhere to the rulings and findings so made, and, applying them to this case, are of opinion that the jury and the court a qua erred in rejecting plaintiff’s demand.
It is therefore ordered, adjudged and decreed that the verdict and judgment appealed from be annulled, avoided, and reversed, and that there now be judgment for plaintiff, and against defendant in the sum of $2,176.77, with interest from judicial demand and costs in both courts.
Rehearing
The cashier of the defendant bank having testified that the defendant bank received no benefit from the $100 check, or, in other words, that it was merely a check by which Perkins, the depositor, drew out $100 for his own use, we have concluded upon further consideration of the matter that the defendant is not responsible to the state for this $100. This testimony of the cashier has to be accepted for true in the absence of contradiction. If the reliability of this evidence had been doubted on the trial, the door was open to the state to have the books of the defendant bank examined by an expert. The suggestion now made in the brief filed in behalf of the state that the books of the bank were the best evidence should have been made on the trial. It is too late to make it now. The check was drawn some time before suspicion had arisen of the defalcation of Perkins; hence, even if the money had been withdrawn with a view to defraud, the defendant bank could not possibly be charged with any participation in the fraud. Perkins at that time had large balances in this and other banks; as a matter of fact, it is entirely improbable that he •drew out this small amount with any view to defraud.
Upon these facts, no legal responsibility to the state rests upon the defendant bank for this $100 as clearly appears from the following excerpts stating the legal principles by which this point is governed:
In Central National Bank v. Conn. Mutual L. Ins. Co., 104 U. S. 54, 26 L. Ed. 693, the court said:
“A bank account, it is true, even when it is a trust fund, and designated as such by being kept in the name of a depositor as trustee, differs from, other trust funds which are permanently invested in the name of the trustee for the sake of being held as such. For a bank account is made to be checked against, and represents a series of current transactions. The contract between the bank and the depositor is that the former will pay according to checks of the latter, and, when drawn in proper form, the bank is bound to presume that the trustee is in the course of the lawful performance of his duty, and to honor them accordingly.”
In State v. Jahraus, 117 La. 292, 41 South. 577, 116 Am. St. Rep. 208, this court said:
“A. is the agent of B. C. knows that he is agent, and that A. keeps an account to the credit of B. A. as agent hands his check to O., who accepts it and collects the amount. That is the end of the matter, if O. knows nothing of the purpose for which A. has drawn the check. He may assume that it was in connection with his agency, and that is the end of the matter.”
In Bank v. Claxton, 97 Tex. 576, 80 S. W. 606, 65 L. R. A. 825, 104 Am. St. Rep. 885, the court said:
“The principles governing are clearly stated in the opinion of the chief justice in the case of Coleman v. First Nat. Bank, 94 Tex. 607, 608, 63 S. W. 867, 86 Am. St. Rep. 871, with copious citations from leading authorities. From these authorities it is clear that a depositor, although holding the money in a fiduciary capacity, may draw it out of the bank ad libitum. The bank is bound to honor his checks, and incurs no liability in so doing, as long as it does not participate in any misapplication of funds or breach of trust. The mere payment of the money to or upon the checks of the depositor does not constitute a participation in an actual or intended misappropriation by the fiduciary, although his conduct or course of dealing may bring to the notice of the bank circumstances which would enable it to know that it is violating his trust. Such circumstances do not impose upon the bank the duty, or give it the right, to institute an inquiry into the conduct of its customer, in order to protect those for whom the customer may hold the fund, but between whom and the bank there is no privity.”
And, again, in same ease:
“In order to hold a banker justified in refusing to pay a demand of his customer, the customer being an executor, and drawing a check as an executor, there must in the first place be some misapplication — some breach of trust— intended by the executor, and there must, in the second place, as was said by Sir John Leech in the well-known case of Keane v. Roberts (4 Madd. 357, 20 Revised Rep. 306), be proof that the bankers are privy to the intent to make this misapplication of the trust funds. * * * The relation between banker and customer is somewhat peculiar, and it is most important that the rules which regulate it should be well known and carefully observed. A banker is bound to honor an order of his customer with*890 respect to the money belonging to that customer which is in the hands of the banker; and it is impossible for the banker to set up a jus tertii against the order of the customer, or to refuse to honor his draft, on any other ground than some sufficient one resulting from an act of the customer himself. Supposing, therefore, that the banker becomes incidentally aware that the customer being in a fiduciary or a representative capacity meditates a breach of trust, and draws a check for that purpose, the banker, not being interested in the transaction, has no right to refuse the payment of the check, for, if he did so, he would be making himself a party to an inquiry as between his . customer and third persons. He would be setting up a supposed jus tertii as a .reason why he should not perform his own distinct obligation to his customer.”
In Lowndes v. City Nat. Bank, 82 Conn. 19, 22 L. R. A. (N. S.) 408, 72 Atl. 154, the court said:
“This is not to say that a bank undertakes to supervise and safeguard a trust account therein, or comes under the duty of looking after the appropriation of such funds when withdrawn. Such is not the law [citing authorities], Neither is it to say that a bank is not entitled, at least in the absence of knowledge to the contrary, to presume that a depositor who presents a check in proper form is anting in the course of a lawful exercise of his rights, or that suspicion on its part that an improper use of the proceeds of a check regularly drawn and presented was intended to be made by the drawer of it would justify a refusal to honor it, or that the existence of such suspicion or reasonable grounds therefor would cast upon a bank a duty to investigate as to the correctness of that suspicion. The authorities are to the contrary.” (Citations.)
Zane on Banks and Banking, p. 218, says:
“In the case of trust funds the bank, assumes no responsibility unless in some way it is put on notice of a violation of the trust. By accepting an account in the name of a trustee it does not undertake any supervision of the trust.”
The decree of this court heretofore handed down in this case is therefore amended so as to read, as follows: It is ordered, adjudged, and decreed that the verdict and judgment appealed from be annulled,, avoided, and reversed, and that there now be judgment for plaintiff, and against defendant, in the sum of $2,076.77, with interest from judicial demand and costs in both courts, and that as thus amended said decree be reinstated and affirmed.
Dissenting Opinion
I. dissent and adhere to the original opinion adopted unanimously by the court.