Kimmel v. Dickson

25 L.R.A. 309, 58 N.W. 561, 5 S.D. 221, 1894 S.D. LEXIS 45
South Dakota Supreme Court·Decided April 3, 1894·Published·Cited by 20 cases

Opinion

Kellam, J.

In this case the facts are simple and undisputed. On and prior to the 9th day of June, 1893, the Douglas County Bank was a banking corporation under the laws of this state, doing business at Armour, in said Douglas county. On that day respondent Kimmel left with such bank $265, to be paid to E. C. Ward on presentation by him of a warranty deed conveying to Kimmel certain described land, with an abstract showing good title in the grantor. The bank gave Kimmel a receipt therefor, reciting that it was so received for such purpose. On the 17th day of June following, and before the deed was presented and the money paid over, the bank failed, and respondent Dickson was appointed its receiver, and as such received and took possession of all the assets and property found in the possession of the bank, of which $259.71 was cash. Subsequently both Kimmel and Ward demanded their money of the receiver, and this action does not involve any controversy between Kimmel and Ward, but simply whether the receiver of the bank should be required to pay over the amount, or so much thereof as the money on hand will pay; or whether the cash so found on hand at the time of the failure of the bank is assets in his hands, to be distributed with and as the other assets of the bank. The court below ordered the receiver to pay over to respondent the said $259.71 so found in the bank at the time of its failure and taken possession of by him, and this appeal is from such order. In the affidavit of Humbert, secretary of said bank, it is stated that when this money was so left with [224] the bank it ‘ ‘was treated the same as any other deposits of said bank, and mixed with the other money therein.” It is not intimated that this was done with the knowledge of Kimmel, or that he in any manner consented to it. Upon these facts it would appear that the money was left with the bank in trust for a particular purpose. The bank could not afterwards, without the acquiescence of Kimmel, change its relation to him from that of a bailee or trustee to that of a general debtor. We ap-1 prehend that no different principle is involved because one of / the parties happens to be a bank. Suppose, under the same* circumstances, Kimmel had left the money with Humbert personally, and he had failed and made an assignment, would this money, so found in his possession, pass to his assignee as his property? If so, when and how did it become so? That he, or the bank in this case, had, without the consent of Kimmel, diverted the money and used it for some other purpose, ought not to affect Kimmel’s rights. Abuse of a trust can confer no rights on the party abusing it, or on those claiming in privity with him. It is not claimed that the §259 found in the bank’s vault when it failed is the very money, or a part of it deposited by Kimmel, and it is not necessary that it should be so. If the money delivered to the bank had been used by it in its business it had presumably either paid its debts pro tanto, or increased its assets; and the general creditors of the bank would be in the same condition if the money found in its possession were paid over in execution of the trust as though the money deposited had been kept separate, and the identical money re-' ceived had been so paid over. Peak v. Ellicott, 30 Kan. 156, 1 Pac. 499, was a case entirely analogous to this. Peak had left with the bank of which Ellicott, upon its failure, became assignee, money to pay a note, which the bank was to send for. As in this case, he took a recept showing the purpose for which the money was left. The bank passed the amount to the credit of Peak. After the failure of the bank, it not having paid the note, Peak brought action against the assignee, asking the [225] same relief as is asked in this case, to wit, that the assignee be required to pay over the amount in full as a trust fund. The supreme court reversed the trial court, holding that the transaction constituted a trust; that the-relation created was not that of a debtor and creditor, but rather that of principal and agent, or bailor and bailee; and that the subject of such trust did not pass to the assignee as assets of the bank. It was held further that the manner in which the bank had treated the fund ■ by crediting it to Peak and mixing it with its own money did not affect his right to claim the amount from the funds on hand. Ellicott v. Barnes, 31 Kan. 170, 1 Pac. 767, was a similar case and the same rule controlled. McLeod v. Evans, 66 Wis. 401, 28 N. W. 173, 214, applies the same principle with the same result, where a draft had been left for collection with a banker who afterwards, and before the depositor had received its proceeds, suspended, and assigned. The court held that the proceeds of the draft constituted a trust fund which did not pass to the assignee, and, there not being sufficient cash in the hands of the assignee to pay the amount, that the same should be a lien upon the assigned estate. The same principle, .though to somewhat different facts, was applied in People v. City Bank of Rochester, 96 N. Y. 32, and again in People v. Bank of Dansville, 39 Hun. 187.

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Kimmel v. Dickson, 25 L.R.A. 309, 58 N.W. 561, 5 S.D. 221, 1894 S.D. LEXIS 45 (S.D. 1894).

25 L.R.A. 309 (Kimmel v. Dickson) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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