eBook details
- Title: Montana-Dakota Power Co. v. Johnson
- Author : Supreme Court of Montana
- Release Date : January 08, 1933
- Genre: Law,Books,Professional & Technical,
- Pages : * pages
- Size : 64 KB
Description
Banks and Banking ? Insolvency ? Establishment of Preferred Claims ? Essentials ? General and Special Deposits ? Bank Acting as Collecting Agent ? Custom of Banks ? Presumption. Banks ? Insolvency ? Preferred Claims ? Essentials to Establishment of Claims. 1. One seeking to establish a preferred claim to funds in an insolvent bank must show that the transaction out of which the claim arises created the relation of principal and agent between him and the bank, that by it the assets of the bank were augmented, and must be able to trace the alleged trust fund into the possession of the bank. Same ? Bank Acting in Capacity of Collector of Moneys ? When Moneys Collected Become General and When Special Deposits. 2. In the ordinary collection transaction between a bank and the person for whom the collection is being made, the former is the agent and the latter the principal; when it is made the bank, in the absence of specific instructions that the money be remitted at once, or facts showing clearly an intention that it be so remitted, becomes a simple contract debtor; if the bank disregards the principals direction that it be forwarded at once, a trust relation arises and the money becomes a special deposit, the bank remaining his agent. Same ? When Deposits General, When Special. 3. A special deposit becomes such by specific direction or agreement, or where a bank taking it does so with knowledge of its character as a trust fund; if it takes a deposit in good faith without such knowledge it becomes a general one. Same ? Bank Acting as Collector of Money ? Custom of Banks as to Mingling Collections With Banks Funds ? Presumption. 4. Where a foreign company employed a local bank to act as its collecting agent in the community in which the bank did business and directed it to make remittances by draft every third day without requesting that it hold the funds intact in the meantime, it will be presumed that it did so with knowledge of the well-known custom of banks to mingle the collections in the interim with the banks other funds, resulting in a general, and not a special, deposit, thus creating the relation of debtor and creditor and depriving the creditor of the right to claim a preference on the banks insolvency. - Page 17 Same ? Tacit Consent of Party for Whom Collections Made to Make General Deposit Bars Contention That Deposit Special. 5. Where a bank, under a contract to act as collector of bills of a foreign business concern in the town in which the bank was located, with instructions to remit by draft every third day, without the knowledge of the concern first pursued a system of deposit which, if continued, might have resulted in a special deposit, but later with the tacit acquiescence of the concerns representative, mingled the funds collected with other moneys, they became a general deposit, and as such were not subject to a claim of preference of payment out of the assets of the bank upon its insolvency. Same ? Special Deposits ? Matter of Contract ? Assent of Contracting Parties to be Gathered from Acts and Expressions not from Matters Undisclosed. 6. In determining whether a deposit claimed to have been a special one and as such entitled to preference in payment out of the funds of an insolvent bank ? a matter of contract between the bank and the depositor ? the mutual assent of the contracting parties must be gathered from their outward acts and expressions, not from those undisclosed.