Hawes v. . Blackwell

Merrision, C. J. after stating the facts: 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 bis debtor for the amount of money deposited, agreeing to dis *200 charge 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 depositor is simply that of debtor and creditor, the debt (o be discharged punctually, in the way just indicated. The 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. Hence, if the bank should fail to pay its depositor, when •called upon to do so, the latter would have his remedy by proper action, just as in the ordinary case where the debtor' refused to pay his creditor the debt he owed him. If the depositor should draw his check on the bank for some part of his deposit — the debt the bank owed him — the payee, or holder of such check, could not maintain his separate action against the bank for non-payment of the check, on presentation of the same for payment — it could not, until the bank accepted the check, or agreed to pay it. Then, and not till then, would the bank become his debtor in his sole right as against it. The check, however, in the hands of the payee thereon, or the holder thereof, would have an interest in the deposit, as against the drawer, to the amount specified in the check, subject to the right of the bank to pay all outstanding checks of the depositor, and such as he might subsequently draw’, and which might be paid before it had notice of the check in question, and subject to the right of the bank to set off debts due which the depositor might owe at the time such check should be presented. The check, as to *201 drawer thereof, is, in effect, an assignment to the holder thereof to the amount specified in the check; and under the method of civil procedure in this State, the depositor and the holder of the check might jointly maintain an action against the bank for the deposit, in case it failed to pay the same when called upon, and they might recover, subject to the rights of the bank, as above explained. And so, also, if the depositor had given his check for the whole of his deposit, the holder might maintain his separate action against the bank, if it refused to pay the same, subject to its rights as to checks on the deposit paid before notice of such check, and likewise subject to its rights of set-off. This is so, because the check for the whole deposit would be, in effect, an assignment of the depositor’s whole debt against the bank to the holder óf such check. He, being the real owner of the deposit — the debt — might sue for it in his own name. And a holder of a check for a part of the deposit might, in some cases, have appropriate equitable relief, as against the depositor and the bank, if they should seek to impair his rights as the equitable owner, against the drawer of part of the deposit. Such check makes the holder thereof part owner of the deposit, as against the.drawer, subject to the rights of the bank. The depositor agrees, in effect, by implication of law, to set apart so much of his-deposit as is specified in the check for the holder thereof. As against the drawer, that much of the deposit belongs to the drawree. If, however, it turns out that the check is not paid by the bank, on due presentation for payment, the holder of the check will have his remedy against the drawer. The depositor— the drawer — agrees that the check will be paid by the bank when it shall be duly presented to it for payment, and, if it 'shall not be, then there will be a breach of the drawer’s contract with the holder of the check. Kahnweiler v. Anderson, 78 N. C, 133; Nimocks v. Woody, 97 N. C., 1; Brem v. Covington, 104 N. C., 589; Spain v. Hamilton’s Administrator, 1 *202 Wall., 604, 624; Bank v. Schuler, 120 U. S. R., 511; Morse on Banking, §496. Now, in the present case, the depositor of the Bank of Durham, James W. Blackwell, was the simple creditor of that bank to the amount of his deposit — it owed him a debt for that sum, just as it owed its creditors other than its depositors; it did not hold the money he deposited, or any part of its moneys, in special trust for him, or for any person to whom he gave checks on the bank. The owner of the bank, the defendant William T. Blackwell, might sell, assign and transfer all his property, including all the assets of the bank, as he did do, to the defendant's trustees for his creditors, including the deposits of general depositors in the bank, and the latter were on the same footing as other creditors, except as he classified them, and preferred certain classes over others in the trust created for their benefit. The depositor, James W. Blackwell, might have maintained his action against the bank to recover from it the amount of his deposit therein when and as soon as it failed and refused to pay him the same. The present plaintiff might have joined him in such action, because he had, in effect, assigned to the plaintiff part of the deposit, a part equal to the amount of the check. But the plaintiff could not have maintained a separate action against the bank for the amount of the check, because the bank did not accept and agree to pay it, nor did the plaintiff have any equitable or other lien upon the assets of the bank. It was not charged with a particular trust in favor of the plaintiff. He -was on no better footing than any other creditor of the bank. The plaintiff might have maintained his action against the drawer of the check, the subject of the action, because the drawer, in legal effect, contracted with him that the check would be paid on presenta: tion to the bank, and it was not so paid. He can maintain this action against the defendant drawer of the check because of such breach of contract. Moreover, such drawer, *203 when he drew the cheek in favor of the plaintiff, in effect sold and assigned fo him a part of his particular deposit— his debt against the bank — equal to the sum of money specified in the check. Hence, if the plaintiff shall recover against the drawer of the check in question, he will be entitled in equity to share in whatever sum shall be paid to such drawer, or the defendant’s trustees for his creditors, on account of his deposit in the Bank of Durham by the trustees of William T. Blackwell. This is so, because the drawer, James W. Blackwell, as we have seen, in legal effect specially set apart so much of his deposit as was equal to the amount of the check drawn in favor of the plaintiff to pay it. The ground of the plaintiff’s recovery from the defendant James W. Blackwell, is that the latter drew the check on the bank in favor of the plaintiff, and thereby agreed that the bank would pay the same when presented for payment. But the bank did not pay the chock, and the plaintiff’s action at once accrued against the drawer, as we have seen, upon such breach of contract. The plaintiff may recover, for such breach/the amount of the check, and he has a right to have so much of the drawer’s deposit as was specially set apart to pay the check applied to the payment of his judgment against the drawer, because that part of the deposit was devoted to the purpose of paying the check. For the reasons stated, the plaintiff is not entitled to recover judgment against William T. Blackwell and the defendant’s trustees for his creditors on account of the plaintiff’s check, nor against the defendant’s trustees for the creditors of James W. Blackwell. He is entitled to recover judgment against James W. Blackw’ell for the amount of his check, and to have it adjudged that so much of the dividends in the hands of the defendant’s trustees for the creditors of William T. Blackwell as shall be paid on account of the deposit of James W. Blackwell, as will be equal to the pro rata share thereof in favor of the check of the plaintiff, be *204 applied to the payment of the plaintiff’s judgment, so far as the same may be adequate; and to have it further adjudged that the defendant trustees of the creditors of the defendant James W. Blackwell shall allow such judgment to share in the assets in their hands in the class of creditors to which it shall belong by the terms of the deed of trust, whose provisions they are charged to execute; and further, to pay out of the dividends they have received from the defendant’s trustees for the creditors of William T. Blackwell, on account of such deposit of the defendant James W. Blackwell, the pro rata share of the check of the plaintiff in such dividends to the credit of the plaintiff’s judgment, so far as the same may be adequate. There is error. The judgment must be corrected as directed in this opinion, and, when so corrected, affirmed. To that end, let this opinion be certified to the Superior Court. It is so ordered. Error.