Opinion
Decided December 5, 1932.
Banks and banking — Liquidation — Depositor's claim not preferred — Check deposited before, but not paid by drawee until after, bank closed.
Notwithstanding check, allegedly deposited for collection, was paid after depository bank closed, depositor held not entitled to preferred claim for amount thereof.
APPEAL: Court of Appeals for Lucas county.
Messrs. Kirkbride, Boesel, Frease Cole and Mr. Bert P. Hebenstreit, for plaintiff.
Mr. Gilbert Bettman, attorney general, and Mr. Charles W. Racine, for defendant.
This cause is in this court on appeal from a decree of the court of common pleas denying to the plaintiff, Albert S. Close, a preferential claim against the assets of the Ohio Savings Bank Trust Company for a deposit made therein by him; the bank now being in process of liquidation. After the appeal was taken Close died, and the action was thereupon revived in the names of the Commerce-Guardian Bank and Frank J. Westcott, executors of his estate.
On August 14, 1931, he indorsed in blank and deposited in his commercial account in the aforesaid bank John Dorn's check to his order for $10,000, drawn upon the Citizens' Banking Company of Sandusky, Ohio. Therewith was deposited a check of $48.43, making a total deposit of $10,048.43, which was credited to his account. At the time of the aforesaid deposit, the credit balance of his account was $2,377.35. On this same day, August 14th, a check of Close dated August 13, 1931, to the order of the Lloyd Bros. Company for $9,000, was presented at the Ohio Savings Bank Trust Company for payment, and was paid. Another check signed by Close to the order of "Cash" was also paid by the bank on August 14th, leaving a balance to his credit on that date of $3,275.78. Other checks were presented for payment and paid on August 15th. On that day a further deposit of $8,662 was made by Close, his balance in this account at the close of business on Saturday, August 15th, being $11,413.43. The bank was unable thereafter to continue business, and on the following Monday, August 17th, possession of its property and assets was taken by the superintendent of banks for the purpose of liquidation, and he has since been in possession thereof. On August 14th the Dorn check, bearing the unrestricted endorsement of Close, was forwarded by the Ohio Savings Bank Trust Company to its correspondent in Cleveland, the Guardian Trust Company, and by that bank was sent to its correspondent bank in Sandusky, the Commercial Banking Trust Company. The check was paid on August 17th, by the drawee bank, the Citizens' Banking Company of Sandusky. It will be observed that at the time of its payment the Ohio Savings Bank Trust Company had ceased doing business and its assets and property were in the possession of the defendant, the superintendent of banks.
At the top of the deposit slip used by Close in making this deposit were the printed words "deposited in The Ohio Savings Bank Trust Company for credit to the account of" followed by the name "A.S. Close." Upon one side of the deposit slip was printed:
"In receiving items for deposit or collection this bank acts only as depositor's collecting agent and assumes no responsibility beyond the exercise of due care. All items, including those on any office of this bank, will be credited conditionally and charged back if not good when presented for payment. The depositor assents to the foregoing conditions."
Plaintiff contends that the Dorn check of $10,000 was deposited for and received by the Ohio Savings Bank Trust Company for collection, and that since it was not paid until after the bank had closed, the amount thereof should be adjudged to be a preferred claim and ordered paid as such. The evidence indisputably shows that for many years prior to August 15, 1931, Close had continuously maintained a commercial account at the Ohio Savings Bank Trust Company, and that during all of that time he had been accustomed to and had exercised the privilege of drawing checks thereon without regard to whether the deposits from time to time made by him consisted of cash or of checks or other negotiable paper, and without regard to whether the same were to be forwarded for collection or had or had not in fact been paid. In the instant case the Dorn check of $10,000 was deposited for the express purpose of creating a balance sufficient to pay the $9,000 check drawn the day before in favor of the Lloyd Bros. Company, as well as to pay other checks drawn by Close on August 14th and 15th, and the checks so drawn were honored by the Ohio Savings Bank Trust Company before payment of the Dorn check by the Sandusky bank upon which it was drawn.
In view of the foregoing facts, we conclude that, whatever the character of the deposit when made, the parties by their subsequent acts and conduct fixed their relationship to this particular deposit as that of debtor and creditor, and that the plaintiff is not entitled to the preference sought.
Decree accordingly.
RICHARDS and WILLIAMS, JJ., concur.