Case Name: City of Maryville, Appellant, v. Farmers Trust Company of Maryville et al., Respondents
Court: Kansas City Court of Appeals
Jurisdiction: Missouri
Decision Date: 1931-12-07
Citations: 226 Mo. App. 641
Docket Number: 
Parties: City of Maryville, Appellant, v. Farmers Trust Company of Maryville et al., Respondents.
Judges: Boyer, G., concurs.
Reporter: Missouri Appeal Reports
Volume: 226
Pages: 641–644

Head Matter:
City of Maryville, Appellant, v. Farmers Trust Company of Maryville et al., Respondents.
45 S. W. (2d) 103.n
Kansas City Court of Appeals.
December 7, 1931.
A. F. Harvey for appellant.
Shinabarger, Blogg <& Livengood and Culver, Philip <& Voorhees for respondent.

Opinion:
CAMPBELL, 0.
Plaintiff, .a city of the third class, adopted'the alternative form of government. W. O. Garrett was its mayor, manager, and collector. Arch K. Frank was its treasurer, and he was also secretary of the defendant trust company.
W. O. Garrett, at a time not disclosed, had collected the sum of twenty-five hundred dollars which belonged to the "water fund" of plaintiff. On the 10th day of December, 1929, he placed that fund on time deposit in the trust company and received therefor a time certificate of deposit in which it is provided that the trust company would pay said sum to the order of plaintiff "six or twelve months after date on return of this certificate properly endorsed with interest until maturity thereon at four per cent per annum." At the time the deposit was made the trust company and its secretary knew the public character of the fund and that the trust company had not been selected as city depository. On April 7, 1930, the trust company failed and its business, property, and affairs were placed in the hands of the Commissioner of Finance of the State of Missouri. The Commissioner of Finance has sufficient funds of the trust company to pay plaintiff's claim in event preference is awarded. Plaintiff presented to the Commissioner of Finance claim for the fund and prayed that the same be allowed as a preferred claim. Upon trial the preference was denied, and the plaintiff has appealed.
The plaintiff had power to select a depository but it was not its mandatory duty to do so.
It was the duty of the city collector "to pay into the treasury, monthly, all moneys . . . belonging to the city which may come into his hands." [Sec. 6785, R. S. 1929.] That duty he did not perform. On the contrary, he adopted a course which rendered the performance of that plain duty impossible. He turned the money over to the trust company and accepted its written obligation to repay the same with interest six or twelve months thereafter. The fund was not paid into the treasury of the city but remained in the assets of the trust company.
The city collector was a trustee, with respect to the fund. In the circumstances, the trust company did not obtain better title to the fund than he had. The deposit, if such it may be called, had all the essential features of a loan, was unlawful, and the trust company therefore did not acquire title thereto. [Consolidated School District v. Citizens Bank, 21 S. W. (2d) 781 ; State ex rel. v. Page Bank, 322 Mo. 29, 14 S. W. (2d) 597 ; Special Road District v. Cantley, 8 S. W. (2d) 944, 945 ; Clearmont School District v. Jackson Bank of Clearmont, 37 S. W. (2d) 1006 ; City of Macon v. Farmers Trust Company, 21 S. W. (2d) 643.]
It is argued by defendant that the city had the right to loan its surplus funds. The argument overlooks the fact that the fund was never paid into the treasury of the city, and that the act of placing the money in the trust company was not the act of the city but the act of the city collector. Moreover, we find no statutory authority, authorizing the city to loan a fund such as the one under consideration.
"Any fair, reasonable doubt concerning the existence of power is resolved by the court against the corporation, and the power is denied." [St. Louis v. Kaime, 79 S. W. 140, 180 Mo. 322.]
The right to preference is clear, and we therefore deem it unnecessary to discuss other questions presented in briefs. The judgment is reversed and the cause remanded, with direction to allow plaintiff's demand as a preferred claim. The Commissioner so recommends.
Boyer, G., concurs.
PER CURIAM:
The foregoing opinion of Campbell, C., is adopted as the opinion of the court. The judgment is reversed and the cause remanded, with direction to allow plaintiff's demand as a preferred claim.
All concur.