Court Opinion

ID: 7120602
Source: CourtListenerOpinion
Date Created: 2022-07-24 12:38:00.18926+00
Date Added: 2024-06-11T16:14:05.560157
License: Public Domain

Supplemental Opinion.
PeR CuRiam.
A petition for rehearing having been filed in this case by appellants, we have again reviewed'the record. We now reach the conclusion that the original opinion should be modified to the extent of permitting the appellants to recover $2,338.03, with interest as provided by law.
It is contended by appellants, upon the authority of Garst v. Canfield, (R. I.) 116 Atl. 482, and Hungerford v. Curtis, *40143 R. I. 124 (110 Atl. 650, 12 A. L. R. 1040),‘that the court will presume that deposits made after July 6th were of funds belonging to the commission company, and that they were made for the purpose of replacing trust funds. If we were disposed to follow these cases, the difficulty would be that the inference to be drawn from all the testimony is that these subsequent deposits were the proceeds received from the sale of live stock consigned to the commission company by others, and sold by it in the regular course of the commission business, and that the only interest the commission company had therein was such charges as it could rightfully make against its customers. In other words, it appears that the money so subsequently deposited was not the money of the commission company, but belonged to others. It is not so much regard for the interests of these others, the owners of the funds so deposited, that stands in the way of impressing a trust on these funds in plaintiffs’ favor, but the fact that no presumption will be entertained that the deposit of funds not belonging to the commission company was intended as a replenishment of the depleted trust fund belonging to plaintiffs. This distinction is recognized in Baker v. New York Nat. Exch. Bank, 100 N. Y. 31 (2 N. E. 452), where it is said that it did not appear that there were any unsettled accounts of Wilson & Brother’s (the factor and truste'e) with any other person or persons for whom they were agents. In United Nat. Bank v. Weatherby, 70 App. Div. 279 (75 N. Y. Supp. 3), it was held that withdrawals and restorations of the trust fund did not operate to extinguish the identity of the trust fund originally deposited, since, the withdrawals being wrongful, the wrongdoer would be presumed to have intended the subsequent deposits as a restoration of the amounts wrongfully withdrawn; and that the eestuis que tnstent had a right to adopt such acts for their benefit, so as to entitle them to the funds so restored, unless it appeared that the money used in making such restoration belonged to someone other than the depositor.
We are not disposed to follow the Rhode Island cases to the disregard of this distinction. If they are so followed, the logical conclusion would be that, to the extent of plaintiffs’ claim, the subsequent deposits by the commission company *402would constitute a trust fund, and could not be applied by the bank to the liquidation of either the commission company’s indebtedness to the bank or the individual indebtedness of Ward; while we understand the present contention of appellants to be that the bank was not entitled to make the latter application, on the theory that it was not the indebtedness of the depositor. If the doctrine.of the Rhode Island cases is not followed, or the distinction pointed out is preserved, then the subsequent deposits did not take on the character of a trust fund belonging to plaintiffs, and the plaintiffs stood in no favored position in respect to the funds so deposited. They were general creditors merely, with no lien or preferred claim of any character upon it. In this view of the situation, they are in no position to complain in this action of any disposition made of such subsequent deposits.
The bank applied a portion of the funds so deposited to the payment of an obligation that, on the face of it, was the individual undertaking of Ward, but which appears, in fact, to have been given for money that went to the use of the commission company. The commission company and Ward both acquiesced in this, and plaintiffs, as mere general creditors in respect’to all of the deposit not impressed with a trust in their behalf, are in no position here to question it.
The same thing is true, we think, in respect to the item of $200 applied by the bank to the commission company’s obligation to pay stockyards charges.
4. Equity: pleading : general relief: permissible relief. It does appear, however, that there is a balance in the bank to the credit of the commission company, though now in the form of cashiers’ checks, of $2,338.03. This sum includes the $1,570.35 which we hold was the balance upon which a trust in favor of plaintiffs should be impressed. Under their prayer for general relief, we think plaintiffs are entitled, in addition to the $1,570.35, to the remainder of the balance to the credit of the commission company, or a total amount of $2,338.03, with interest.
The bank has no claim upon this balance, and no other-creditor is claiming it. We see no reason why plaintiffs may not, in this equitable action, under their prayer for general equitable relief, be awarded this. Such a result is not in con*403travention of tbe Negotiable Instruments Act, Section 3060-al89, Code Supplement, 1913, as construed by this court. That section is for the protection of the bank. Hove v. Stanhope St. Bank, 138 Iowa 39; Dolph v. Cross, 153 Iowa 289; McClain & Norvet v. Torkelson, 187 Iowa 202.
In all other respects, the petition for rehearing is overruled. The judgment of the court below is reversed, and the cause remanded for judgment and decree in harmony with the views expressed in this supplemental opinion. — Reversed and remanded.