Lummus Cotton Gin Co. v. Walker

SAYRE, J. (1) There is no occasion for a particular discussion of appellant’s claim that any funds, much or little, in the possession of the insolvent bank at the time appellee took over the affairs of the bank under authority of the statute, should be charged with a specific trust for appellant’s benefit on the ground that the money collected for appellant was to be found somewhere in those funds which at that time constituted a part of the general estate of the bank. That question has been foreclosed 'against appellant by the reason and authority of cases heretofore considered in this court. — Bank of Florence v. U. S. Savings & Loan Co., 104 Ala. 297, 16 South. 110; Nixon State Bank v. First State Bank, 180 Ala. 291, 60 South. 868. (2) But appellant claimed by way of alternative a preference under section 250 of the Constitution as the holder of a bank note or as" a depositor who had not stipulated for interest. That the cashier’s check by which the insolvent bank undertook to transmit to appellant the money collected for its account, though in legal effect payable to appellant or its indorsee on demand and not subject to countermand, was not a “bank note” within the meaning of the constitutional provision, is clear. Without reference to the fact that it was not made to appear that the insolvent bank had qualified itself to issue “bills for circulation” as required by section 248 of the Constitution, it is enough to say in this connection that, patently, this cashier’s check was not intended to circulate as money or to become a part of the common currency of the country to be used in the ordinary trans [555] actions of business, and was therefore not a bank note. — 2 Michie, Banks and Banking, § 196, et seq. (3-7) Nor was appellant a depositor. A “depositor,” speaking generally, is one who delivers to or leaves with a bank money subject to his order, either upon time deposit or subject to check. —2 Michie, § 119. Of course, bills, checks, drafts, or other evidences of debt in the ordinary course of business may be accepted and credited by a bank as the equivalent of money, in which case ordinarily the bank becomes the owner of the paper. This is the rule although the bank has the right to charge dishonored paper back to the depositor instead of proceeding against the maker.' — Michie, § 127, and cases shown by the notes. A cashier’s check issued on request of a depositor is the substantial equivalent of a certified check, and the deposit represented by the check passes to the credit of the checkholder, who is thereafter a depositor to that amount. — Id., §§ 143%, 145 (1-6). If appellant had requested a cashier’s check, no doubt it would thereby have become a depositor. But that was not the case. Appellant through its agent sent Elrod’s promissory note to the German Bank for collection, with instruction to remit by New York Exchange, and upon receipt of the check immediately sent it back for collection through a bank in Birmingham. In the meantime the German Bank had gone into the hands of the Banking Department of the state for liquidation. There is no question but that appellant might have maintained its action for money had and received at any time after collection by the German Bank. But here the question is one of preference between the creditor’s of the bank. Their status was fixed when the department took charge, and it does not stand to reason that appellant should be allowed, after the affairs of the bank had passed into the hands of the state’s receiver, to adopt the previously unauthorized act of the bank in converting the collection into its general fund and so acquire a preference over other creditors. Eo instanti the bank passed into the hands of the department, its whole assets became a trust fund for the equal payment of creditors, subject only to a preference in favor of the holders of bank note and depositors who had not stipulated for interest. It appears from the facts stated in the petition for intervention, and established by the agreement between the parties, that appellant did not deposit or leave money or its equivalent with the German Bank to be drawn out on its order. It sent its note for col [556] lection by the bank as its agent (or the agent of the forwarding bank) with instructions that excluded the idea of a deposit of the proceeds. The collecting bank held the proceeds as an agent or bailee with special and limited authority, and its commingling of them with its general fund, which may be presumed, was nothing more or less than a wrongful conversion, and, since appellant’s money is incapable of being identified or traced, constituted appellant a mere simple contract creditor of its agent or bailee, the bank. Appellant was not a “depositor” under the Constitution, which means to prefer those who place their money on deposit for safe-keeping, to be paid out upon their checks or drafts. — Parkesburg, Bank’s Appeal, 6 Wkly. Notes Cas. 394; State v. Corning State Bank, 136 Iowa 79, 113 N. W. 500; State Savings Bank of Detroit v. Foster, 118 Mich. 268, 76 N. W. 499, 42 L. R. A. 404. The decree sustaining the demurrer and dismissing the intervention is affirmed. Anderson, C. J., and McClellan and Gardner, JJ., concur.