Court Opinion

ID: 7937974
Source: CourtListenerOpinion
Date Created: 2022-09-08 23:11:40.379995+00
Date Added: 2024-06-11T16:33:36.695308
License: Public Domain

Hooker, J.
(dissenting). In this case it is claimed by the petitioner that on February 14, 1893, one Mrs. Glasier paid certain money to the defendant bank, upon a mortgage owned by petitioner, which was in the hands of the bank for collection, and that the bank did not remit the same to the petitioner, but mingled it with the cash of the bank. Soon after, the bank closed its doors, by reason of insolvency; and this is a proceeding to compel the receiver to pay the claim, upon the ground that the money was a trust fund. The case of In re Johnson, 103 Mich. 109, is relied upon as establishing the liability. In that case money was paid to the bank upon a mortgage left for collection by the owner, Avith express directions not to place the amount to his credit, but to notify him at once, as he wished to use the money. The amount, when received, was not credited, but was carried in a fictitious account. It Avas shown that the money was mingled Avith the cash belonging to the bank, and not shown that the fund was ever exhausted, but it did show a balance in excess of the amount received in trust; each day after it was received until the receiArer took possession. That case nowhere contains an intimation that, had the fund once been exhausted, the petitioner would have stood upon any footing different from that of other creditors, while'had it been intended to hold that relief could be had as prayed, on the ground that the money had been *195received, and liad gone to swell the assets of the bank, the discussion indulged in would have been uncalled for.
In the present case the testimony as to payment is contradicted. It is plain that Mrs. Glasier first deposited the sum in the bank, taking a certificate of deposit and a cashier’s check. As this was before the bank received the collection, it must be held to have established the relation of debtor and creditor between the bank and Mrs. Glasier. On February 14th she attempted to make payment. Mr. Dolan went with her, and thinks he saw her pay the money. • Another witness says that she was present, and saw Mr. Dolan count the money, and saw it paid upon the mortgage. Mrs. Glasier ivas not present at the hearing, her sister testifying that she was ill, and not able to be present in court. On the other hand, the books of the bank indicate that the payment was made by the surrender of the certificate of deposit and cashier’s check, which evidence is quite convincing. The petitioner also relies on a letter from the receiver to petitioner’s representative, in which he states that he finds the papers properly indorsed, and the money on deposit in the bank, and that it ought to have been sent at once when received, but that she would have to make proof of claim like other creditors. This does not throw any light on the question of how the mortgage was paid — First, because the receiver does not profess to have any knowledge upon that subject; and, second, his admissions have no force. It is not within the scope of his office to admit away the trust fund. In this respect he is upon the same plane as an administrator. Gilkey v. Hamilton, 22 Mich. 283. The testimony of Dolan is not at all positive, and, while the remaining witness testifies positively, she may have in mind another occasion. On the other hand, the natural method of making payment would have been to surrender the evidences of deposit, instead of drawing the money upon them, and paying it back again. No one tes-’ tifies that such payment was made, and the bank balance *196would probably have shown a discrepancy had the money been paid and no entry made in the cash account.
Having reached the conclusion that money was not received, the other questions become unimportant, unless we are to take the view that it makes no difference whether payment was made in cash or by surrender of evidences of debt against the bank. We think this position is untenable. That would be to convert an indebtedness into a trust fund at once. Let it be understood that such is the law, and it would be easy to shift the indebtedness of all holders of certificates of a failing bank into trust funds, by merely making special deposits of them for the benefit of another. There is some reason for the doctrine that a fund cannot be treated as a fund held in trust, unless that appropriated to the purposes of the trust can be traced into it, and shown to constitute a part of it. The Johnson case follows a line of authority which relaxes the rigor of this rule by applying rules kindred to such as relate to the improper intermingling of property. The propriety of the doctrine there laid down is not recognized by all of the courts, and its expediency is, perhaps, questionable. The rule should not be extended to cover-’'a case like this. Sherwood v. Milford State Bank, 94 Mich. 78. But unless the fund can be identified, as being or containing the actual fund, the trust cannot be enforced against general creditors. Willett v. Stringer, 17 Abb. Prac. 152; In re Janeway, 4 N. B. R. 100; Bank of Commerce v. Russell, 2 Dill. 215; Tinglar v. Offutt, 70 Md. 78; Thompson’s Appeal, 22 Pa. St. 16; Northern Dakota Flevator Co. v. Clark, 3 N. Dak. 26; Veil v. Mitchel, 4 Wash. C. C. 105; Van Alen v. Bank, 52 N. Y. 1; Illinois Trust & Savings Bank of Chicago v. First Nat. Bank of Buffalo, 15 Fed. 858, and cases cited; Holmes v. Gilman, 138 N. Y. 369; In re Hosie, 7 N. B. R. 601. See, also, dissenting opinion of Cassoday, J., in the case of McLeod v. Hvans, 66 Wis. 413.
The order of the circuit court should be reversed, and *197one entered here dismissing the petition, with costs of both courts.
Since the foregoing opinion was written, Prof. Mechera, of the University, has called attention to the fact that the case of McLeod v. Evans has been overruled, so far as it is applicable to this case, by the recent case of Nonotuck Silk Co. v. Flanders, 87 Wis. 237, in an opinion that is in accord with the views above expressed.
Montgomery, J., concurred with Hooker, J.