Messenger v. Carroll Trust & Savings Bank

Evans, J. i banks and solvent ferred claim. — I. The Moline Plow Company is a manufacturing concern, resident in Illinois. Prior to April 3, 1919, it was not a depositor or creditor of the defunct bank. On April 3d, it drew its sight draft upon the Swaney . Automobile Company, of Carroll, Iowa, and sent the same, with a bill of lading attached, to the Carroll Trust & Savings Bank, with directions to collect and remit. The amount was for $1,411.98. The letter transmitting the sight draft contained the following: “Please surrender bill of lading only upon payment of the draft and of exchange and collection charges and remit the full amount of the draft to us.” The draft was duly presented and collected. The proceeds of the collection were remitted on April 23d by Chicago exchange upon the Continental. & Commercial National Bank. Before the draft upon the Chicago bank had been paid, the Carroll Trust & Savings Bank was -closed. It was not open after the close of business on April 24th. It is the contention for the Moline Plow Company that the relation created between it and the bank was strictly'that of principal and agent; whereas the receiver contends that the transaction had created the relation of creditor and debtor only. The bank complied strictly with the directions of the claimant. It did not purport to open any account with the claimant, nor to deposit the proceeds to the credit of the claimant. It simply put such proceeds in the form of its own draft upon the Chicago bank, for the purpose of remittance. The case at this point is ruled squarely by Brown v. Sheldon State Bank, 139 Iowa 83, and by our previous cases cited therein. The question is [610] fully discussed in the Brown case, and nothing can be gained by a repetition of the discussion here. 'Following such case, it must be held that the proceeds of the sight draft came'into the hands of the bank as agent for the Moline Plow Company, and that the title thereto was at all times in the principal, and not in the agent. II. It was also made to appear by the stipulation that at all times on and after the date of the collection of the sight draft, and up to and including the date of the suspension of the bank, and the appointment of the receiver, the bank had not less than $15,000 of cash, and that not less than $10,000 thereof passed into the actual possession of the receiver. This was a sufficient tracing of the funds into the hands of the receiver, under our holding in the Brown case and in prior cases cited therein. 2 banks and trlnffCT?ea °byh bookkeeping. It is contended also on behalf of appellant that, because of the method adopted in the collection of the sight draft, the proceeds of such collection never had any distinct identity, and that ^01’ that reaso:n they could not be traced Gather into the bank or into the hands of the receiver. The method of collection was that the Swaney Company drew its check upon its own account in the collecting bank for the payment of the sight draft. It had an account of $4,500, against which it drew. Its check was charged against this account, and the amount thereof was put by the collecting bank into the form of Chicago exchange, for the purpose of remittance. That this method of collection was the full equivalent of the payment of money by the Swaney Company, and served to the augmentation of the assets of the bank in precisely the same manner as the delivery of currency would have done, is held in the following authorities: British & Am. Mtg. Co. v. Tibballs, 63 Iowa 468; Page County v. Rose, 130 Iowa 296; Kansas State Bank v. First State Bank, 62 Kan. 788 (64 Pac. 634); State Nat. Bank v. First Nat. Bank, 124 Ark. 531 (187 S. W. 673); National Life Ins. Co. v. Mather, 118 Ill. App. 491; Arnot v. Bingham, 55 Hun (N. Y.) 553; People v. Merchants’ Bank, 92 Hun (N. Y.) 159; Cunningham v. State, 115 Ark. 392 (171 S. W. 885); Skarda v. State, 118 Ark. 176 (175 S. W. [611] 1190); People v. City Bank of Rochester, 96 N. Y. 32; Capital Nat. Bank v. Coldwater Nat. Bank, 49 Neb. 786 (59 Am. St. 572). We deem it-clear that the net result of the transaction of payment by the Swaney Company and the receipt thereof by the collecting bank was the same as though the Swaney Company had drawn the currency into its own hands by means of check, and had thereupon delivered the same to the collecting bank in payment of the sight draft. Such is the holding of the cited cases. There is some suggestion in the argument that the trial court allowed the preference to the exclusion of all other preferred claimants. We do not so construe the order. The claim is established as a preferred claim. Its status is no better than that of other preferred claims. Whether there be sufficient funds to pay them all in full, or whether they must still suffer a scaling down pro rata as between themselves, is a question not involved in this appeal, nor does the record contain any evidence bearing on the question. The order of the trial court is strictly in accord with our prior holdings, and it is, accordingly, — Affirmed. • r Stevens, C. J., Arthur and Faville, JJi, concur.