Court Opinion

ID: 7905613
Source: CourtListenerOpinion
Date Created: 2022-09-08 22:00:07.047557+00
Date Added: 2024-06-11T16:32:24.562941
License: Public Domain

Mason, J.
(dissenting) : It is of course ordinarily true that the effect of making a payment to a bank by a check drawn upon it is the same as though the money had been-physically delivered by the bank when the check was presented and then returned to it. Possibly that is always true when such a conception of the transaction is necessary to protect the rights of the person making the payment. But I do not think that rule is applicable to the present situation, nor do I think if applied it should warrant a judgment for the plaintiff. In my view the decision of the case should be controlled by these considerations : Money which is received by a bank as a collecting agent may be reclaimed by the principal from a receiver as a trust fund if by reason of it the assets to. be distributed are that much larger than they would otherwise have been; the fact that the liabilities of the bank may have been diminished by the amount does not answer the purpose, for the liabilities of an insolvent corporation are not equivalent to cash. A sufficient reason for this distinction is that if the money belonging to someone else gets into the bank and so augments' by that *775amount the assets to he distributed among creditors, no one is injured by the episode if the money is restored to the owner; each creditor is just as well off as though the transaction had never taken place. But if the money has merely gone to the payment in full of a debt of the bank each other creditor will suffer more or less, according to the degree of disparity between the assets and liabilities. (Investment Co. v. Bank, 98 Kan. 412, 416, 158 Pac. 68.)
In the present case the assets that passed into the hands of the receiver were no larger than if the plaintiff had had no relations with the bank. The bank as the plaintiff’s agent held for collection the draft against Poell Brothers. Poell Brothers drew their check on the bank for the amount and exchanged it for the draft. At the same instant and by the same act the bank’s indebtedness to Poell Brothers was reduced and an obligation to the plaintiff for a like amount was created. The bank had exchanged one creditor for another. Its assets were in no way increased. It had enough cash on hand to pay the check if that had been demanded, but the business could and doubtless would have been done in precisely the same way if it had had no currency available, but only exchange — deposits in other banks. No change of the existing condition was contemplated except to transfer a credit from Poell Brothers to the plaintiff. Such theoretical withdrawal of money from the bank as may be conceived as taking place was solely by reason of the presentation of the draft and for the purpose of meeting it. The theory of an increase in assets can be given effect only by changing the transaction — by regarding an arrangement for the transfer from one person to another of money the bank was already holding as the bringing of new money to it; by separating what did take place into two acts which might have taken place and treating them as independent of each other.
The case of Bank v. Bank, 62 Kan. 788, 64 Pac. 634, is readily distinguishable. There the First State Bank of Marion held for collection a check for $1,400 on another bank in the same town. In its daily clearing with the other bank it turned in this check with other items. The clearing showed a balance against the First State Bank of $615.58, which it paid in cash —that is (the settlement being made at the other bank), by its cashier’s check, which was paid the same day. If it had not *776held the check for $1,400 the balance against it would have been $2,015.58, and it would have paid out in cash this amount instead of $615.58. So that its assets when the receiver took charge were $1,400 larger than they would have been if it had not held and collected the check for that amount.
Burch, J., joins in the dissent.