The Fargo forum and daily republican. [volume] (Fargo, N.D.) 1894-1957, 1911-11-20

/ In the supreme court state Oh Nofth
Dakota, October 1911 term.
| L. c. widman, plaintiff and appel
liant. VS.. George A. kellogg. as receiver
defendant and respondent.
1. This appeal is before this court
on the Judgment roll alone. The nnu-
inRs. among other things, are to the
effect that appellant wss required az
a local agent of the G. N. x. GO. ana
another, to transmit his receipts eacn
/ dav to his principals In ST. PAU; ana
| that IL was his custom TO go TO the
bank and deposit such receipts ana
| receive therefor. from the bank, drafts
i payable to the order of his principals
| and forthwith to transmit the same.
It was also found that on four days
named he followed this custom ana
| that the drafts so procured and lot
| warded to St. Paul were disnonored
hecause no funds were on deposit with
the correspondent of the local bank
with which to pay them; that the Of
fcers of the bank knew of his employ
ment and the purpose for which SUCH
drafts were obtained. The record
contains no findings that he kept any
general account or drew any checks on
| the local bank.
/ Held that in view OF this custom
and the findings as a whole, the word
deposit must be construed as indicat-
ling the payment into the bank OF each
DAYS receipts, in exchange Tor drafts;
ana that he stood in relation to the
bank as a purchaser for cash, or
drafts.
>. Sec. 1850. r. G. 1905, prohibits
insolvent state banks from receiving
any money, bank bills, notes or cur
lrencv bills or drafts; and Sec. 1851
makes any of1cial of an insolvent
bank who receives money. ETC., guilty
of a felony. The defendant bank had
been hopelessly insolvent for some time
nrior 10 the purchase of the drafts
mentioned and it had no funds with
IT'S correspondent bank out Of which
thew could be paid; and such officials
had no reason to anticipate their be-
ing honored. Held, that such money
wac receiyed by the bank without con-
alteration and in effect, under false
pretenses or representations; that
thereby a fraud was perpetrated upon
annellant. the effect of which was to
make the bank trustee exsmaieficio
of such funds.
q on a receiver being appointed
for such bank, in a proceeding under
the statute to wind up the affairs Of
insolvent corporations. he had no
Greater rights in such funds or moneys
than those possessed by the insolvent
bank. and succeeded the bank as trus-
tee.
4 The fact that the bank closed
It's doors within four business days
after the first of the trans
actions described and the next day
after the last one; and that money in
more than double the amount or the
claim Of appellant was turned over
10 the receiver by the bank; and other
elements OF the findings Of the trial
court. lead to the conclusion that both
the money assets Of the bank and those
received by the receiver were enhanced
bv the transactions described.
&. When a trustee mingles trust
funds with his own and subsequently
paws out q portion of the commingled
J funds. 1t will be presumed that he
made his payments from that pOreion
of the fund belonging to himself and
retained the funds which did not be-
long to him and except in so far az
he may distinguish what is his own
the whole fund will be treated as the
trust property.
s. The trusteeship of the bank and
: of the receiver being established, II
being conceded that the moneys Of
appellant were commingled with the
funds of the bank and respondents
. having failed TO show that moneys
paid out in the meantime were the
!. original trust funds; and likewise hav-
ing failed to show that appellants
money was not included in that turned
over to the receiver, appellant is en-
titled to recover.
Z. When such trust funds are moi
comningled with any OF the assets OF
| the bank. except the cash assets. the
preference of the bank, except to the
cash funds of which the receiver took
possession, when distinguishable from
the other assets of the estate going
into his hands.
8. Appellant is entitled to prefer
. ence to the extent Of the moneys turn
ed OVER to the receiver
Q. The rights OF other claimants
| / IL any. to preference. not being be-
fore this court, appellants rights rel
. alive to them are not determined. but
i It is suggested that the ends OF Jus
tice would be promoted by proceeding
on the part OF the claimants to prefer
ence. in such cases. BY Intervention
rather than BY independent action
against the receiver.
(Syllahus by the court.l
Appeal from the district court oi
Nelson county, Tenpleton, j
. Reversed.
!. Erich Il Kelly. for. appellant; Bangs
81 & Robbins. for respondent.
81 Opinion by spalding, G. j., Bruce, =.
not participating
81 In the supreme court. state Of NORTH
Z 4 Dakota. October 1911 term
81 Melvin A. Gunderson, plaintiff ant
I appellant. VS.. Lars Holland, defend
I i ana arA rnsrf.fs flnT4f