" Reference is also had to the case of Fulton v. Gardiner, 127 Ohio St. 77, 186 N.E. 724, and Fulton,Supt. of Banks, v. University of Dayton, 129 Ohio St. 90, 193 N.E. 758. It is therefore urged that a relationship of debtor and creditor was thereby established between the trustee and the bank, and that there can be no preferential recovery against the assets of the insolvent institution.
In determining whether title to funds passes to a depositary bank, regard must be had to the agreement under which the deposit is made and to all the conditions and circumstances of the arrangement and the legal character of the transaction. The naked fact that the bank was operating with reference to the money herein involved under an escrow agreement carried much legal significance. (Second paragraph of syllabus in Fulton, Supt. of Banks, v. University of Dayton, 129 Ohio St. 90, approved and followed.) 6. Under the circumstances of this case it was not necessary to follow this money in specie or trace it into a particular fund. It is enough that the Superintendent of Banks has in his custody funds of such bank sufficient to satisfy the preference in full or pro tanto.
In the Restatement of the Law of Trusts, Vol. 1, page 46, Section 12, the rule is stated as follows: "If money is deposited in a bank for a special purpose, the bank is a trustee or bailee of the money if, but only if, it is the understanding of the parties that the money deposited is not to be used by the bank for its own purposes." This language has been approved by this court in Fulton, Supt. of Banks, v. Escanaba Paper Co., 129 Ohio St. 90, 193 N.E. 758, and Squire, Supt. of Banks, v. Oxenreiter, 130 Ohio St. 475, 200 N.E. 503. There is, however, another vital consideration.
The plaintiffs stress the point that the agreement did not provide for the payment of interest by the bank, and none was paid. Of course this fact is pertinent but not conclusive. Busher, Clerk, v. Fulton, Supt. of Banks, supra; Fulton, Supt. of Banks, v. EscanabaPaper Co., 129 Ohio St. 90, 193 N.E. 758. Restatement of the Law of Trusts, page 43. In this connection it is also urged by the plaintiffs that not only was no interest provided for or paid, but it was stipulated that the committee was to compensate the bank for its services.
Such a deposit gives rise to the relationship of debtor and creditor. Fulton, Supt. of Banks, v. Escanaba Paper Co., 129 Ohio St. 90, 193 N.E. 758; Busher, Clerk, v. Fulton, Supt. of Banks, 128 Ohio St. 485, 191 N.E. 752. Money deposited for a definite purpose without any agreement or understanding that it shall not be used by the depositee for its own purposes is a general deposit for a specific purpose or, as it is sometimes called, a specific deposit and creates the relation of debtor and creditor just as in the case of a general deposit. Squire, Supt. of Banks, v. American Express Co., 131 Ohio St. 239, 249, 2 N.E.2d 766; Squire, Supt. of Banks, v. Oxenreiter, 130 Ohio St. 475, 200 N.E. 503.
It is doubtful whether the decisions of this court would recognize such a lien against all the assets which passed from Judge Crow to his executors. See Smith et al., Trustees, v. Fuller et al., Assignees, 86 Ohio St. 57, 99 N.E. 214, L.R.A. 1916C, 6, Ann. Cas. 1913D, 387, paragraph five of the syllabus; Fulton, Supt. of Banks, v. B.R. Baker-Toledo Co., 128 Ohio St. 226, 234, 190 N.E. 459, 93 A.L.R. 933; Fulton, Supt. of Banks, v. Escanaba Paper Co., 129 Ohio St. 90, 105, 193 N.E. 758; Squire, Supt. of Banks, v. American Express Co., 131 Ohio St. 239, 2 N.E.2d 766, paragraphs 10 and 11 of the syllabus. But see Squire, Supt. of Banks, v. Branciforti, 131 Ohio St. 344, 2 N.E.2d 878, paragraph six of the syllabus; Klaustermeyer v. Cleveland Trust Co., Assignee, 89 Ohio St. 142, 105 N.E. 278.
Nor did the trust company ever regain the solvency which would have enabled it to honor any withdrawal from these accounts. In the case of Fulton, Supt. of Banks, v. Escanaba Paper Co., 129 Ohio St. 90, 193 N.E. 758, this court held: "In determining whether title to funds deposited has passed to the depositary bank, regard must be had to the agreement under which the deposit is made, and to all the conditions and circumstances of the arrangement.
Such a deposit gives rise to the relationship of debtor and creditor. Fulton, Supt. of Banks, v. Escanaba Paper Co., 129 Ohio St. 90, 193 N.E. 758; Busher, Clerk, v. Fulton, Supt. of Banks, 128 Ohio St. 485, 191 N.E. 752. Money deposited for a definite purpose without any agreement or understanding that it shall not be used by the depositee for its own purposes is a general deposit for a specific purpose or, as it is sometimes called, a specific deposit and creates the relation of debtor and creditor just as in the case of a general deposit. Squire, Supt. of Banks, v. American Express Co., 131 Ohio St. 239, 249, 2 N.E.2d 766; Squire, Supt. of Banks, v. Oxenreiter, 130 Ohio St. 475, 200 N.E. 503. The credit in the due-borrowers account was certainly neither a general nor a special deposit. It is therefore necessary to inquire whether it was a general deposit for a specific purpose. If such, it is taxable.
The plaintiff makes no claim for any preferential right in the fund arising from any assessment of double liability of the bank's stockholders for the reason, as stated by him, that the Constitution sets this up for the benefit of all of the depositors of the banking corporation and the Legislature had no power to give any preferential rights thereto to any particular claims. The plaintiff in his brief also recognizes the principle laid down in the first paragraph of the syllabus of Fulton, Supt. of Banks, v. Escanaba Paper Co., 129 Ohio St. 90, 193 N.E. 758, reading as follows: "In order to assert successfully a claim for preference in the distribution of the assets of an insolvent bank, a depositor must establish legal or equitable title to the deposits he has made. If title to the funds deposited has passed to the bank he becomes a creditor and, as such, has no valid claim for preference."
The case cites Blakey v. Brinson, supra, and many other cases. On the same day the opinion in the Massachusetts case was filed the Supreme Court of Ohio filed its opinion in Fulkon v. Escanaba Paper Co. and Fulkon v. University of Dayton, 129 Ohio St. 90, 193 N.E. 758, in which the Ohio court followed the rules announced by the United States Supreme Court and the Supreme Judicial Court of Massachusetts in the cases above cited. We think the holdings in these cases are consistent with the rules previously announced by this court and must prevail in deciding the present litigation.