162 So. 262 | La. Ct. App. | 1935
Lead Opinion
By consent, this case was consolidated for trial in lower court, separate judgments to be rendered in each, with the case of Geo. Williams Jr. v. the same defendant, and, from judgments against the plaintiffs, this appeal has been taken. The essential facts as set out in the petition, and as admitted, or proven on trial, are as follows:
Early in March, 1933, by order of the President of the United States, and of the Governor of this state, all banks, including the defendant, were placed on a restricted basis. Plaintiff then had on deposit in the bank, $1,489.91. From this, on the 4th of March, 1933, he withdrew approximately the permitted 5 per cent., or $81.53, so that after March 4th, there remained to his credit in said bank $1,408.38. He alleges, and the answer admits, that between that date and December 1st following, there matured notes of the plaintiff in said bank aggregating $630. These notes are in evidence and contain no provision authorizing the bank to offer or offset against any of the plaintiff's deposit in said bank to compensate the amount due on the notes.
On December 1, 1933, the state authorities placed the said bank in liquidation and the defendants herein were appointed to their respective officially named capacities. On the 6th of February, 1934, for the first time, so far as the record shows, plaintiff demanded of Mr. Girard, special agent, that his account in the bank in liquidation be corrected to conform with the figures based on the theory of the compensation having taken place, and which he then presented as a correct basis of settlement.
In due course of the liquidation, the defendant officials, after their appointment of December 1st, had credited all depositors, including this plaintiff, with a dividend equal to 36 per cent. of their deposit as of March 1, 1933, subject to further adjustment. A part of this credit was applied to a subscription by the depositors including Watkins, to shares of stock in a newly organized bank, and the balance is held to be finally applied as a payment from Watkins to the bank in liquidation on his said matured notes; this sum being not sufficient to pay the notes in full. It is to this method of liquidation that plaintiff objects as to his account in his above-mentioned letter and demand of the 6th of February, 1934. This demand was refused and the suit was filed.
The main issue, therefore, is as to whether or not his notes were compensated as against his deposit, and, if so, what should be the resulting settlement.
It is well settled in this state that a bank cannot, without the express consent of the depositor, apply his funds on deposit to the payment of his debt to the bank. Gordon v. Müchler, 34 La. Ann. *264 604; Hancock v. Citizens' Bank, 32 La. Ann. 590, 592; Morgan v. Lathrop, 12 La. Ann. 257; Matthews, Finley Co. v. Their Creditors, 10 La. Ann. 342; Bloodwarth v. Jacobs, 2 La. Ann. 24, 25; Bogert, etc., Co. v. Egerton, 11 La. Ann. 73.
In Thomas, Bank Examiner, v. Marine Bank Trust Co.,
In Re Canal Bank Trust Co. (Intervention of Wainer),
In Re Canal Bank Trust Co. (Intervention of the Bank of Picayune),
So that in this case, had Mr. Watkins at any time after the maturing of his notes and previous to the insolvency of the defendant bank, authorized it to apply his moneys on deposit to the payment of the notes, and had the bank done so, probably such application would have been valid.
But this is not the question now presented. Plaintiff in no way authorized the application of his deposits to the payment of these notes until some three months after the bank had been placed in liquidation by the state authorities. The rights of the parties were then very different from what they had been while the bank was solvent. The question, therefore, is as to whether, after a bank has become insolvent, the depositor can demand such application of his deposit to the payment of his note. Evidently he cannot. In the above-cited case in
The court cites People's Bank v. Drainage Dist.,
The foregoing is in line with Dart (Gen. St.) § 558, which prohibits any bank or bank officer, after the insolvency of the bank, to make any transfer of any asset to the bank. In other words if the bank is put into liquidation, or is even insolvent, its assets become subject to the common claim of the creditors, except where pledges or special liens exist, and such assets must be liquidated fairly and the proceeds distributed as provided under the banking laws of this state.
Dart (Gen. St.), § 700, provides at length for the notices to and for the distribution to the depositors of what pro rata of moneys shall be fairly due to them in the liquidation. But it contains no suggestion that a depositor who has funds on deposit should for that reason be settled with under any rule different from that applying to other depositors.
Dealing with this question in People's Bank v. Mississippi
Lafourche Drainage District,
"The moment the plaintiff bank was declared insolvent and its affairs placed under the control of the state examiner of state banks for liquidation, defendant was no longer entitled to the entire amount of his claim, but only to its distributive share or proportion of the assets of said insolvent bank as the liquidator might recover, and at such time as the liquidator might be able to make an equitable and legal distribution of those assets, at which time only its pro rata would become due and demandable.
"It, therefore, appears to us that compensation could, at no time, have taken place, and that the plea thus advanced by the defendant cannot be sustained under our law. We feel fortified in this interpretation by the fact that any other construction of the language in the Code would lead to an unjust and inequitable result. It would virtually be giving a preference and paying a premium to depositors of the defunct bank who might be indebted unto it, as every dollar recovered in compensation by such debtor depositor, in excess of his distributive share of the assets of the bank, would reduce those assets to the detriment of other depositors, in contravention of C. C. article 2215, which declares that compensation cannot take place to the prejudice of the rights acquired by a third person. * * *"
Upon the authority of the above-mentioned cases, this court, in People's Bank Trust Co. in Liquidation v. Louisiana State Rice Milling Co.,
This court, in Eicher-Woodland Lumber Co.,
For the foregoing reasons, it is decreed that the judgment appealed from be, and the same is hereby, affirmed; plaintiff to pay the costs of court in both the lower court and on appeal.
Dissenting Opinion
These two cases are factually governed by the same law on the subject of compensation. When the obligation which Watkins owed the bank became due, there was at the same time due Watkins by the bank, subject to check, a sum of money. And when the obligation which Williams *266
owed the bank became due, there was at the same time due Williams by the bank, subject to check, a sum of money, in both cases equally liquidated and demandable before the bank was declared insolvent. Neither Watkins nor Williams made demand on the bank to apply the money to their credit in the bank to the payment of their notes until after the bank became insolvent, but to the end, that compensation might operate and have effect, no demand or request was necessary, because "Compensation takes place of course by the mere operation of law, even unknown to the debtors; the two debts are reciprocally extinguished, as soon as they exist simultaneously, to the amount of their respective sums." Civil Code, arts. 2208, 2130; Act No.