Tanana Valley Ry. Co. v. Washington-Alaska Bank

CUSHMAN, District Judge. Petitioner in his motion for judgment upon the pleadings depends upon the rule that where money has been paid out from commingled funds, which funds include a trust deposit such as that above described, it will be presumed that the moneys paid out were those of the trustee and were not those of the cestui que trust, and that, as long as there was sufficient money remaining on hand in the bank at [402] the time of the receivers’ taking possession to cover the trust deposit, to that extent the money will be presumed to- be that of the. trust depositor. National Bank v. Ins. Co., 104 U. S. 55, 26 L. Ed. 693; Merchants’ Nat. Bk. v. School District, 94 Fed. 705, 36 C. C. A. 432; Spokane Co. v. First Nat. Bk., 68 Fed. 979, 16 C. C. A. 81; City of Spokane v. First Nat. Bk., 68 Fed. 982, 16 C. C. A. 85; In re Acheson & Co., 170 Fed. 427, 95 C. C. A. 597; Board of Com’rs v. Strawn, 157 Fed. 49, 84 C. C. A. 553, 15 L. R. A. (N. S.) 1100; Board Co. Com’rs v. Patterson (C. C.) 149 Fed. 229; In re Royea’s Estate (D. C.) 143 Fed. 182. But it will be seen from the foregoing that, although the receivers do not deny the amount of money on hand at the time the bank was closed and they took possession of its property and assets, yet they do positively deny that any of the money deposited by the petitioner remained, but allege that all of it had been long prior thereto paid out by the bank. In the case of Board of Commissioners of Crawford County v. Strawn, 157 Fed. 49, at page 51, 84 C. C. A. 553, at page 555 (15 F. R. A. [N. S.] 1100) it is said: “The blending of the trust money with tbe money of the trustee was suffered at one time to defeat tbe owner’s title and compel bim to stand as a mere unsecured creditor. Tbis was upon tbe idea that money was not ear-marked, and therefore could not be recovered in specie. But tbe later cases have met this difficulty in tbe case of blended moneys in a bank account, from which there have been drawings from time to time, by the fiction that the sums thus drawn out were from the moneys which the tort-feasor had a right to expend in his own business, and that the balance which remained included the trust fund which he had no right to use. It was upon this fiction that Knochball v. Hallett, 13 Ch. Div. 696, 726, et seq., was decided. That case was approved in National Bank v. Insurance Co., 104 U. S. 54, 26 L. Ed. 693, and has been followed in many subsequent cases when the trust fund has consisted of moneys on deposit. Smith v. Mottley, 150 Fed. 266 [80 C. C. A. 154]. But, as this is a mere presumption, it will not stand against evidence.” It is therefore clear, in view of the positive denials of the receiver and the allegations by it that petitioner’s deposits had been dissipated prior to the receivership, that a question of fact is presented that must be tried upon the evidence. The court cannot presume that the defendant has no evidence to [403] sustain its denials and allegations or to overcome the presumption above mentioned. The motion will be denied.