Corporation Commission v. Merchants Bank & Trust Co.

Clarkson, J. In Hawes v. Blackwell, 107 N. C., at p. 199-200, it is said: “When a bank, in the course of its business, receives deposits of money in the absence of any agreement to the contrary, the money deposited with it at once becomes that of the bank, part of its general funds, and can be used by it for any purpose, just as it uses, or may use, its monies otherwise acquired. The depositor, when, and as soon as he so makes a deposit, becomes a creditor of the bank, and the latter becomes his debtor for the amount of money deposited, agreeing to discharge the debt so created by honoring and paying the checks or orders the depositor may, from time, to time, draw upon it, when presented, not exceeding the amount deposited. The relation of the bank and de *128 positor is simply that .of debtor and creditor, tbe debt to- be discharged punctually, in tbe way just indicated. Tbe contract between them, whether express or implied, is legal in its nature, and there is no element or quality in it different from the same in ordinary agreements or promises, founded upon a valuable consideration to pay a sum of money, specified or implied, to another party. There are none of the elements of a trust in it. The bank does not assume or become a fiduciary as to the money deposited for the depositor, nor does it agree to hold a like sum in trust for him. Boyden v. Bank, 65 N. C., 13; Bank v. Millard, 10 Wall., 152; Bank v. Schuler, 120 U. S. R., 511.” In Corporation Commission v. Trust Co., 193 N. C., p. 696, the authorities are cited and the rule laid down (1) as to general deposits, (2) special deposits, (3) as to deposits for a specific purpose. As to the last rule, the opinion, at p. 699, quotes from Morton v. Woolery (48 N. D., 1132), 24 L. R. A., 1107: “Where money is deposited for a special purpose, as, for instance, in this ease, where it was deposited for the stated purpose of meeting certain checks to be thereafter drawn against such deposit, the deposit does not become a general one, but the bank, upon accepting the deposit, becomes bound by the conditions imposed, and, if it fails to apply the money at all, or misapplies it, it can be recovered as trust deposit,” citing numerous authorities. In the Hawes case, supra, it says: “When a bank, in the course of its business, receives deposits of money in the absence of any agreement to the contrary.” In the Morton case when the money is deposited and accepted by the bank for a stated purpose to meet certain checks, to be drawn against the deposit, if the condition imposed is not complied with, and if the bank fails to apply or misapplies, a recovery can be had as a trust deposit. Brushing aside the cobwebs, in this action the $20,000 Page check was deposited upon the distinct agreement and understanding that Angelo Brothers were to check out $12,950 to pay off the lien. In fact the $20,000 check was part purchase price of land that there was a lien for $12,950 on. The $20,000 deposit was made and a check immediately given to pay off the lien of the $12,950. The $20,000 deposit was impressed with the trust to the extent of $12,950. The specific purpose was to pay out of it the $12,950, under the facts and circumstances of this action, equity will hold the $12,950 for the benefit of Angelo Brothers. The check was held in trust by the bank for this specific purpose. The balance, it would seem, under the facts disclosed, was a general deposit. There is no question as to the bank collecting the check as it was marked “paid” the very day of the *129 deposit. In a court of equity tbe general rule is “Equality is equity,” but not so, as in this action, tbe check of $20,000 was impressed witb a trust of $12,950. This amount bas priority of payment out of “tbe assets in tbe bands of said receiver.” As to tbe balance of tbe $20,000 deposit, Angelo Brothers is a creditor like any other unsecured creditor. In accordance witb this opinion, tbe judgment below is Modified and affirmed.