Opinion
No. 3719.
June 20, 1929.
Appeal from District Court, Gregg County; Reuben A. Hall, Judge.
Suit by V. A. Davidson and another against James Shaw, as Banking Commissioner, and others. Judgment for plaintiffs, and defendants appeal. Affirmed.
See, also, 19 S.W.2d 792.
V. A. Davidson and J. P. Voss brought the suit, in nature to impress a trust on a bank deposit, entitling them to its return or preference payment to claims of general creditors, or, in the alternative, to have the deposit classified as a claim protected under and payable out of the depositors' guaranty fund. The Commercial Guaranty State Bank of Longview was organized as a guaranty fund bank, and continued to so operate until it was take nover by the state banking commissioner on September 29, 1926, for the purpose of liquidation. At the time the bank was taken over by the state banking commissioner there appeared on its books the following account:
Davidson Voss. Trust Account, % R. E. Wylie et al.Dr. Cr.
September 8, 1925 ............................. $1,875 00 1,875 00
The court, in a trial before it without a jury, made the findings of fact that: "I find as a fact that the deposit involved in this bearing deposit, and so accepted by the bank, and was handled as such, and maintained that status until the bank went into liquidation." "I find that the said deposit was not made to be considered as a trust fund."
In keeping with the findings of fact so made, judgment was entered in favor of the plaintiffs, in effect allowing and classifying their claim as one protected by and payable under the depositors' guaranty fund of the state, as provided by article 446, Rev.St. 1925. The banking commissioner had appealed, predicating error in the judgment.
The facts concerning the deposit are simple and undisputed. On June 12, 1925, M. C. Dyer, of Dallas, Tex., acting by R. E. Wylie, his agent, entered into a written agreement with J. F. Meeks, of Lincoln parish, La., to sell J. F. Meeks a three-twentieths undivided interest in 100,000 acres of timbered land in the state of Durango, Mexico, for the sum of $18,750. The agreement recited that J. F. Meeks was to deposit with the Commercial Guaranty State Bank of Longview, Tex., 10 per cent. of the purchase price, and that such sum of money was to be paid over to M. C. Dyer or order by the bank upon the approval of the title of M. C. Dyer in the land by a certain firm of lawyers named in the instrument. If the abstract of title did not show good title, and the title was not approved within six months from date of the agreement, the money so deposited was to be returned to J. F. Meeks. On June 12, 1925, J. F. Meeks made the deposit of the sum stipulated in the Commercial Guaranty State Bank by draft on the Ruston State Bank of Ruston, La. The deposit, however, was made by agreement of the parties, not in the name of the bank, but as follows:
J. K. Bivens Lumber Company. Trust Fund. Address S.E. Woods and R. E. Wylie.Dr. Cr.
June 12, 1925 ................................. $1,875 00
Thereafter, on a date not affirmatively stated, J. F. Meeks entered into an oral agreement with V. A. Davidson and J. P. Voss, whereby J. F. Meeks was to convey to Davidson and Voss jointly a two-thirds undivided interest in the three-twentieths interest in the land contracted to be sold by M. C. Dyer, in the event M. C. Dyer presented an abstract showing good title in him approved by the attorneys named. M. C. Dyer was not a party to nor connected with the agreement. The agreement stipulated that Mr. Davidson and Mr. Voss were each to deposit the sum of $1,875 in the Commercial Guaranty State Bank of Longview, which was to be paid over to J. F. Meeks and by him applied in part payment of the purchase price of the land in case the agreement between Meeks and Dyer was carried out and did not fail of execution. In pursuance of the agreement, and on September 6, 1925, J. P. Voss drew the following check:
"Dubach, La., September 6, 1925.
"Pay to the order of Commercial Guaranty State Bank $1,875.00, Eighteen Hundred Seventy-five and no/100 Dollars.
"J. P. Voss.
"To the Dubach State Bank, Dubach, La."
On September 8, 1925, V. A. Davidson drew a like check. On September 8, 1925, J. P. Voss wrote and mailed a letter addressed to the Commercial Guaranty State Bank of Longview, reading:
"Gentlemen: I am enclosing herewith two checks for $1,875.00 each, for myself and Mr. V. A. Davidson, together with order signed by Mr. J. F. Meeks covering a deposit for a like amount from him, which is to be delivered to Mr. M. C. Dyer or order when he has shown evidence that a certain tract of Mexican land consisting of 100,000 acres has been properly transferred to Mr. Meeks, Mr. Davidson and myself. This matter will be handled by Mr. R. E. Wylie."
Upon receipt of the letter and the two checks, the bank, treating the checks as cash, opened on its ledger the following account:
Davidson Voss. Trust Account, % R. E. Wylie et al.Dr. Cr.
September 8, 1925 ............................. $1,875 00 1,875 00
At the same time the bank issued and delivered the following deposit slip:
Commercial Guaranty State Bank
Longview, Texas, 9/8 1925.
Deposited by
Trust Account, Davidson Voss % R. E. Wylie et al.Checks as follows: ............................ $1,875 00 1,875 00
Total ...................................... $3,750 00
Davidson, Voss and Meeks knew the checks were being handled in that way by the bank, and of the opening of the account, and made no objection thereto. The checks were paid in due course by the bank at Dubach, La. Thereafter, on June 5, 1926, and before any title was passed or attempted to be passed, J. F. Meeks and Davidson and Voss agreed upon a rescission of their contract of sale, and J. F. Meeks released Davidson and Voss on the same date. J. F. Meeks signed and acknowledged before a notary public an instrument in writing, and mailed it to the Commercial Guaranty State Bank of Longview, which, after reciting the former agreement, stated:
"Whereas, the said J. P. Voss and V. A. Davidson deposited in the Commercial Guaranty State Bank of Longview, Texas, the sum of $3,750.00 to be held by the said bank for the purpose of carrying out the said trade with M. C. Dyer, and they to receive a two-thirds interest in the said land, but they to get their two-thirds interest in the said land from me; and whereas, since the agreement between the said Voss and Davidson on the one side and me on the other, we have entered into a further agreement whereby the said J. P. Voss and V. A. Davidson have been released by me from taking any part of the said land, and I am releasing them from any obligation to take the said land, and have agreed that they draw the $3,750.00 that they deposited in the Commercial Guaranty State Bank of Longview, Texas: These are therefore to instruct you, the Commercial Guaranty State Bank of Longview, Texas, that by an agreement entered into between J. P. Voss and V. A. Davidson on the one side and me on the other, the said Voss and Davidson are released from any obligation to take any part of the land referred to in the contract entered into between M. C. Dyer and me, and you are hereby authorized and instructed by me to pay to the said J. P. Voss and V. A. Davidson the $3,750.00 that they placed in trust with you pertaining to the said contract between M. C. Dyer and me, and I hereby release the said Commercial Guaranty State Bank of any liability to me by reason of the payment of this said sum to the said J. P. Voss and V. A. Davidson."
It appears that, after the bank received the above instrument, it refused to pay over the money to Voss and Davidson, but it does not appear that they made demand by check or draft for payment of the money. The account as entered on the ledger of the bank stood that way at the date the bank was taken over for the purpose of liquidation on September 29, 1926. R. E. Wylie, M. C. Dyer, S.D. Woods, Jr., and J. F. Meeks were made parties defendant to the suit, but they admitted on the trial that they had no interest and that they made no claim to the $3,750, and judgment was accordingly so entered. The appeal does not involve any controversy between them and Voss and Davidson.
The trial court made findings of fact, which are here approved. So far as need to be here copied, such findings, in addition to the findings afore set out above, are, viz.:
"The Commercial Guaranty State Bank of Longview handled the said checks as cash items, and they were entered by the said bank on said September 8, 1925, as part of the cash items on that date, and each of said checks was endorsed on said September 8, 1925, by the Commercial Guaranty State Bank of Longview, Texas, and made payable to the order of any bank, banker or trust company, with all previous endorsements guaranteed.
"On September 9, 1925, the said checks were received by a bank in Shreveport, and the said bank in Shreveport gave the Commercial Guaranty State Bank of Longview credit for the total amount of the two checks, handling the same as cash items, just as though the Longview bank had paid the said Shreveport bank that much cash; likewise the Commercial Guaranty State Bank of Longview charged the Shreveport bank on September 8, 1925, with the total amount represented by the two checks, $3,750.00, just as though the Longview bank had sent the Shreveport bank that amount in cash money.
"The said checks, in due course of banking, were sent by the Shreveport bank to a bank in New Orleans, as cash items, and in turn the New Orleans bank sent the said checks to the bank against which they were drawn, the Dubach State Bank, at which place the said checks were duly paid by said bank.
"I find that when the said checks were deposited in the Commercial Guaranty State Bank of Longview, Texas, on September 8, 1925, they were accepted as that much cash, and on that day the said bank had a large amount of cash money on hand in its bank at Longview, the same being largely in excess of the amount of money called for by these checks.
"I find that at all times from the day the said checks were deposited in the Commercial Guaranty State Bank of Longview, up to and including the day the said bank went into liquidation, the said bank had an amount of cash money on hand largely more than the amount called for by the two checks involved in this case.
"I find that on September 29, 1926, when the assets of the Commercial Guaranty State Bank of Longview went into the charge of the Banking Commissioner, and the said bank went into liquidation, the said bank had cash money assets in its bank in Longview from $12,000.00 to $15,000.00, and that the said banking commissioner got all of said cash money as a part of the assets of said bank."
John W. Goodwin, of Austin, for appellants.
Young Stinchcomb, of Longview, for appellees.
It is contended by the banking commissioner that, in effect, the deposit was neither a special deposit to be specifically returned nor a deposit within the terms of the Depositors' Guaranty Fund Act (Rev.St. 1925, art. 441 et seq.), but a deposit of a nature allowable as a general creditor's claim only. The trial court concluded that the deposit was not in point of fact a special deposit such as would be subject to be specifically reclaimed, but was of the kind protected under the depositors' guaranty fund. It is believed that the ruling of the trial court was correct and should be sustained in the special curcumstances of the case. The conduct of the parties and all the circumstances go to show the purpose and intention of J. F. Meeks and Davidson and Voss in the initial undertaking was to have the two checks cashed and the proceeds actually deposited as a general deposit, and not in the nature of a bailment, in the bank, to the credit of Davidson and Voss. There was no intention on the part of Meeks, Davidson, and Voss to have the bank keep the proceeds of the draft as a special deposit and return the identical money so deposited when the time should come for the money to be paid out. The character of return to be made by the bank was merely that of an equal sum of money. There is applicable to the facts the conclusion of the court, upon quite similar facts, in the case of Butcher v. Butler, 134 Mo. App. 61,114 S.W. 564, 566, viz.: "There was no intention or though entertained by Becker, Butcher, or the bank that the funds deposited were to be kept separate and the bank deprived of their use. It was the idea to put the money beyond the control of the depositor Becker to protect the contingent interest in it given to Butcher by the contract, but, when the time should come for the money to be paid out, the obligation of the bank was to make the payment out of its general funds, and not to return the identical money." The principle in that case controls the present appeal. The fact of whether a deposit in a bank is a special or general one is dependent upon the mutual intention and understanding of the parties. Fogg v. Tyler, 109 Me. 109, 82 A. 1008, 39 L.R.A. (N.S.) 847, Ann.Cas. 1913E, 41; 5 Cyc. 514. See Annotation 39 L.R.A. (N.S.) p. 847. The rule is quite settled that, quoting from Warren v. Nix, 97 Ark. 374, 135 S.W. 896, 899, "if the agreement between the parties is that the identical coin or currency shall be laid aside and returned, then it is a special deposit. But if the agreement is that the money shall be returned, not in the specific coin or currency deposited, but in an equal sum, it is a general deposit. In either case the money is deposited for safe keeping, and the only distinction between the two kinds of deposit is in the character of the return that is to be made thereof to the depositor, whether it shall be returned in the identical thing deposited, or in kind." Therefore the finding of the trial court must be sustained that "the said deposit was not made to be considered as a trust fund."
The simple question then is, Was the deposit protected by the depositors' guaranty fund; the bank being in the relation of debtor and creditor, and not "trustee" or bailee, and the deposit being, as admittedly shown, unsecured and noninterest-bearing? The money being placed in the bank with the intention of a general deposit, and not a bailment or special deposit to be specifically returned, such deposit would be within the terms of the Depositors' Guaranty Fund Act, although such general deposit was not subject to check until the time of the determinative event agreed upon between the parties and assented to by the bank. So far as the face of the agreement shows, the determinative event could have occurred or been satisfactorily performed the next day after the deposit. And it is an admitted fact that the parties to the original agreement mutually rescinded the same and so notified the bank. From and after that date the deposit was subject to check by Davidson and Voss, such as any general deposit would be. Article 446, Rev.St. 1925, reads: "All unsecured noninterest bearing deposits * * * shall be protected under the guaranty fund." Article 447, Rev.St. 1925, enumerates the "deposits" that shall not "be protected or insured under the guaranty fund." The two articles considered together, in order to fix the meaning, must be understood as including all deposits of the kind described and as debarring those only expressly enumerated. The word "deposit" was used in the generally accepted and understood meaning, as very clearly ruled in Kidder v. Hall, 113 Tex. 49, 251 S.W. 497, 499, by Chief Justice Cureton. Quoting from that opinion: "A depositor is one who delivers to or leaves with a bank money, or checks or drafts, the commercial equivalent of money, subject to his order, and by virtue of which, action the title to the money passes to the bank." The present deposit is within the terms of article 446, Rev.St. 1925.
It is believed the other assignments of error should be overruled as not affording ground for reversal.
We are of the opinion that the judgment of the trial court as recorded in the minutes was intended to only classify and allow payment out of the depositors' guaranty fund of the fund in controversy. We conclude that the judgment should be so construed, and so hold.
The judgment is affirmed.