Court Opinion

ID: 3381147
Source: CourtListenerOpinion
Date Created: 2016-07-05 18:29:00.046326+00
Date Added: 2024-06-11T12:46:13.652573
License: Public Domain

I regret that I find myself in such total disagreement with my brethren concerning this and kindred cases of the same character. In my opinion to allow this claim as a preferred claim is to practically nullify the last vestige of protection left to the ordinary common every-day depositor in a State bank, by recognizing that through various contractual devices and manipulations deposits of money can be so arranged for that the depositor, although general in every sense of the word so far as benefit to himself is concerned and in so far as his outward appearance to the public is concerned, immediately becomes a specially favored and preferred creditor in the event of insolvency.
There is, no doubt, a species of cases in which a bank undertakes a relation as trustee or agent to perform a particular *Page 122 
act or apply a particular fund delivered to it in the execution of a trust. Thus where a bank accepts money from A under an agreement to temporarily retain it until it can be paid out to B who is the true owner of it, the contract by which the money is delivered over is for the benefit of B the real owner of the fund, and consequently since B, the owner of the money, is not a party to any agreement for general deposit of the fund, he can reclaim that which is his own if he finds it still in theassets of the bank, or can trace it into such assets. See cases decided on this subject as listed in 2 ENCYCLOPEDIA DIGEST OF FLORIDA REPORTS, page 222, et seq.
In this case, however, the pleadings admit and the facts show that there was a general "deposit" of the money in the bank by the then owner of that money, — an owner which then had full power to do anything with the money that it pleased. I am wholly unable to see how under the circumstances, the fact that the general deposit was coupled with an agreement or understanding that it was to be disbursed on order, for a particular purpose for the depositor's benefit, can operate to the prejudice of all the other depositors of the bank by allowing the general depositor to reclaim this money out of the bank's assets, and thereby take it away from the common, every-day, ordinary depositors, who are the "forgotten men" and "forgotten women" in these bank liquidations, on the theory that it can be done so as in pursuance of a "trust" deposit, or special deposit.
The deposit of funds in a bank, intended by the depositor to be used for a specific purpose, but which deposit remains at all times the property of the depositor, and subject to his order, may be a deposit for a specific purpose, and entitle the depositor to some added consideration or equity *Page 123 
in a controversy solely between the depositor and the bank. but when the controversy is between the representative of other depositors in that same bank, namely, the bank liquidator, it cannot be held that such a transaction amounts to a special deposit as that term is used in our law. Fralick v. Coeur D'Alene Bank  Trust Co., 36 Idaho 207, 210 P. 586.
There is a clear-cut distinction between a special deposit that can be reclaimed as a preferred claim when traced into theassets coming into the hands of a liquidator and a deposit fora special purpose, whose identity as a segregated asset is lost at the moment of deposit, because the nature of such a deposit is an authority on the part of the depositor to the bank to commingle the fund and use it and treat it as a general deposit from the instant the bank receives it. See 3 Rawle C. L. 518-519.
Money delivered to a bank to be paid to another person on the happening of some contingency, or on some condition to which the bank agrees, to the effect that the money is received andheld as specially deposited, is in a true sense a special deposit and may be preferred when traced. 3 Rawle C. L. But money left with a bank to be entered and posted on the books of the bank as any other deposit, and mingled with the funds of the bank, though understood to be deposited in a special account as a trust fund, is not a special deposit and cannot be so reclaimed. 3 Rawle C. L. 518.
It seems to me that the distinction between the two cases last cited is obvious. In the first case, the bank has no authority conferred on it by the special depositor to treat the relationship established as one of debtor and creditor, nor to enter the deposit on its books as such, not to commingle the fund with its general funds. The fact that it may in reality do so is simply a breach of the terms of *Page 124 
the deposit and in no wise destroys its trust character. In such case the money is delivered and received on the express understanding and condition that it will be held as a special deposit, which contemplates that the fund will neither be commingled with the general funds nor entered on the books as such.
On the other hand a general deposit, understood to be entered on the books of the bank and the money treated by the bank as any other depositor's money commingling it with the bank's general funds, cannot be converted into a special deposit having a trust character, merely because the bank is notified that the money is being placed in a separate account to be disbursed for trust purposes, or to be held for trust purposesby the depositor. In a case like that just mentioned, the money remains at all times within the depositor's control, it becomes commingled with other moneys in the bank and the bank commits no violation of the terms of the deposit by so commingling it, the amount of that deposit is reflected in reports to the Comptroller showing total deposits on hand, the representation is made to the public with the implied, if not the direct consent of the depositor, that his deposit is a general deposit because it is figured into the bank's statement of deposits. To permit such a deposit to have preference would be to work a fraud on every other depositor by giving effect as against the public, to the secret understanding with which the deposit was made and carried on the bank's books to all intents and outward appearances as a general deposit, to be dealt with as such.
In the case at bar, while the Court may well feel disposed to give the city every advantage that can be justly given to enable it to reduce its loss, yet the fact should not be overlooked that cities and towns are expressly authorized *Page 125 
by statute to take securities to protect their deposits against losses like this. See First Am. Bank  Trust Co. v. Palm Beach,96 Fla. 247, 117 Sou. Rep. 900, 65 A. L. R. 1398.
I think this case is controlled by McCrogy Stores Corp. v. Tunnicliffe (Fla.) 140 Sou. Rep. 806, and not by Newsome v. Acacia Mutual Life Assoc. (Fla.) 136 So. 2d 389. The latter case involved a bank having a special legislative charter giving it trust powers. In this case the bank had no trust fund so far as the record shows.