{ "id": 1425580, "name": "Bankers' Trust Company v. Arkansas Rice Growers' Co-operative Association", "name_abbreviation": "Bankers' Trust Co. v. Arkansas Rice Growers' Co-operative Ass'n", "decision_date": "1934-04-30", "docket_number": "4-3448", "first_page": "138", "last_page": "143", "citations": [ { "type": "official", "cite": "189 Ark. 138" } ], "court": { "name_abbreviation": "Ark.", "id": 8808, "name": "Arkansas Supreme Court" }, "jurisdiction": { "id": 34, "name_long": "Arkansas", "name": "Ark." }, "cites_to": [ { "cite": "47 S. W. (2d) 579", "category": "reporters:state_regional", "reporter": "S.W.2d", "opinion_index": 0 }, { "cite": "185 Ark. 401", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1435336 ], "opinion_index": 0, "case_paths": [ "/ark/185/0401-01" ] }, { "cite": "46 S. W. (2d) 12", "category": "reporters:state_regional", "reporter": "S.W.2d", "opinion_index": 0 }, { "cite": "185 Ark. 64", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1435265 ], "opinion_index": 0, "case_paths": [ "/ark/185/0064-01" ] }, { "cite": "60 S. W. (2d) 915", "category": "reporters:state_regional", "reporter": "S.W.2d", "opinion_index": 0 }, { "cite": "187 Ark. 531", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1432127 ], "opinion_index": 0, "case_paths": [ "/ark/187/0531-01" ] } ], "analysis": { "cardinality": 535, "char_count": 11346, "ocr_confidence": 0.486, "pagerank": { "raw": 4.03580807328026e-08, "percentile": 0.053651969670818644 }, "sha256": "9235568f70a7533fb980887c92c58189b7ea44dd1a67ed88e977207215a4aa36", "simhash": "1:01c9540c6e77fa5e", "word_count": 1934 }, "last_updated": "2023-07-14T16:25:52.773578+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Humphreys, J., dissents." ], "parties": [ "Bankers\u2019 Trust Company v. Arkansas Rice Growers\u2019 Co-operative Association." ], "opinions": [ { "text": "Smith, J.\nThis cause was tried in the court below upon the following agreed statement of facts:\n\u2018 \u2018 Stipulation.\n\u201cIt is hereby stipulated between the parties hereto, through their respective solicitors, that this cause may be submitted upon the following Agreed Statement of Pacts.\n\u201cAgreed Statement of Pacts.\n\u201cThe Rice Growers\u2019 Co-Operative Association had a general deposit with the Bankers\u2019 Trust Company, and had maintained a general deposit in said bank for sometime prior to the transaction herein complained of, and on October 2,1931, had on deposit $25,084.31, in the form of a general checking account.\n\u201cThat the Rice Growers\u2019 Co-Operative Association deals in buying and marketing rice and, in making sales of rice, it was its custom to draw drafts on the consignees of the rice, with bills of lading attached, and would deposit these drafts, with the bills of lading attached, in the Bankers\u2019 Trust Company and take credit therefor on its general checking account.\n\u201cThat the Bankers\u2019 Trust Company, through its officers, suggested to the Rice Growers\u2019 Co-Operative Association that some security or margin he placed with said bank to protect the bank from any losses that might occur by reason of the bank giving immediate credit for such drafts and the consignees failing or refusing to pay the face value of the drafts.\n\u2018\u2018 That, at the suggestion of the bank, the Rice Growers \u2019 Co-Operative Association authorized the bank to charge its general checking account with the. sum of $3,000, for the purpose of securing the bank against loss on the draft collections. Thereupon the bank, of its own motion, made out the following charge ticket against the association\u2019s general checking account, to-wit:\n\u201cBANKERS\u2019 TRUST COMPANY,\n\u201cLittle Rock, Ark., October 2, 1931.\n\u201cCHARGE\n\u201cArkansas Rice Growers\u2019 Co-Operative Ass\u2019n., \u201cStuttgart, Ark.\n\u201cCovering Certificate of Deposit payable to \u2018Ourselves Account Margin'Arkansas Rice Growers\u2019 Co-Operative Assn, drafts.\u2019 $3,000\n\u201cCharge made by BB (Signed) BB.\n\u201cA copy of this charge ticket was transmitted, in due course, by the bank to the association, and the association accepted and retained the same.\n\u201cOn the said October 2, 1931, the Bank issued a certificate of deposit, as follows:\n\u201cCERTIFICATE OF DEPOSIT.\n\u201cLittle Rock, Ark., October 2, 1931. No. 3587 \u201cBANKERS\u2019 TRUST COMPANY $3,000\n81-25\n\u201cOurselves account margin Arkansas Rice Growers\u2019 Co-Operative Assn, draft has deposited with the Bankers\u2019 Trust Company $3',000 & 00 cts. dollars in current funds, payable to the order of themselves, demand after date with interest to maturity only at the rate of 2 per cent, -per annum, but subject to thirty days\u2019 prior notice of withdrawal and the return of this certificate properly -indorsed. If at the request of the owner hereof and with the consent of said bank this certificate shall be paid before maturity, no interest shall be paid thereon.\n\u201cJ. L. Spence, Tr.\n\u2018 \u2018 Countersigned: \u2018 \u2018 Assistant Cashier.\n\u201cD. Majors. Auditor.\n' \u201cNot subject to check.\n\u201cOn February 27, 1933, the Little Rock Clearing House Association, of which the Bankers\u2019 Trust Company was a member, took action, with the approval of the Governor and the Bank Commissioner, whereby all deposits of the members of the Clearing House Association were forthwith to be restricted, as to withdrawal thereof, so that the only part of any deposit thereafter withdrawable was 5 per cent, or $15, respectively, thereof, whichever was the larger, such action being taken pursuant to \u00a7 7 of act 60 of the Acts of Arkansas of 1933. The said restriction of withdrawals was validated by \u00a7 1 of act 96 of the Acts of 1933.\n\u201cOn May 1, 1933, at the .request of the board of directors of the Bankers\u2019 Trust Company, the Bank Commissioner duly took charge of its affairs, for purposes of management, under act 88 of the Acts of 1933. On said May 1, 1933, also pursuant to said act 88, the Bank Commissioner reorganized the said Bankers\u2019 Trust Company by the creation of a new bank at Little Rock, Bankers\u2019 Commercial Trust Company, to which certain of the assets of the Bankers\u2019 Trust Company were sold and transferred, in consideration of Bankers\u2019 Commercial Trust Company assuming 50 per cent, of the then remaining restricted balances of Bankers\u2019 Trust Company\u2019s deposits.\n\u201cAll drafts of the Rice Growers\u2019 Association for which it had received credit from Bankers\u2019 Trust Company prior to the said May 1, 1933, were paid in full in due course, and the said $3,000 security has ceased to be necessary for the protection of the Bankers\u2019 Trust Company. The Rice Growers\u2019 Association was entitled to withdraw $150, as the 5 per cent, permitted to be withdrawn by the Clearing House Association action, and was furthermore entitled to 50 per cent, of the difference between $3,000 and said $150, by reason of the assumption of Bankers\u2019 Commercial Trust Company 50 per cent, of such difference amounting to $1,425. The Rice Growers\u2019 Association has not, in fact, withdrawn the said $150 or the said $1,425, but both said amounts are available to it, so that the actual amount in controversy in the within suit is $1,425. The failure of the Rice Growers\u2019 Association to withdraw the $150 and the $1,425 assumed by the Rankers\u2019 'Commercial Trust Company was due to the fact that some of its drafts were, until recently, outstanding.\n\u201cIt is agreed that the Rice Growers\u2019 Association will not estop itself in this suit by accepting the $150 and $1,425 admittedly available deposit.\u201d\nUpon this statement of facts it was ordered and decreed that the claim of plaintiff, Arkansas Rice Growers \u2019 Co-Operative Association \u201che and it hereby is allowed as a prior claim (against the Bankers\u2019 Trust Company and Marion Wasson, as Bank Commissioner in charge thereof) in the sum of $1,425, * *\nThis appeal is from that decree, and appellants state the sole issue in the cas\u00e9 to be whether this $1,425 should be allowed as a common or general claim or should he allowed as a prior claim.\nThe question presented for decision involves a consideration and construction of a portion of \u00a7 1 of act 107 of the Acts of 1927, page 297, which, in our opinion, has previously been so construed as to require the affirmance of the decree here appealed from.\nSection 1 of act 107 classifies the creditors of a bank of which the Bank Commissioner has taken charge as \u201csecured creditors, prior creditors or general creditors,\u201d and proceeds to define each of these classifications. This section defines those creditors who are to he classed as \u201cprior creditors.\u201d\nParagraph 4 of this section reads as follows: \u201cThe owner of a special deposit expressly made as such in said bank, evidenced bv a writing\u2019 signed by said bank at the time thereof, and which it was not permitted to use in the course of its regular business.\u201d\nParagraph 5 reads as follows: \u201cThe beneficiary of an express trust as distinguished from a constructive trust, a resulting trust or a trust ex maleficio of which the said bank was the trustee, and which was evidenced by a writing signed by said 'bank at the time thereof.\u201d\nIt is further provided in \u00a7 1 of this act that these prior creditors shall be paid in full, with certain exceptions not important here to consider, as the Bank Commissioner has in hand sufficient funds to pay the claim in question in full, notwithstanding the exceptions, if it is, in fact, a prior claim. As has been said, it has been stipulated that the only question for decision is whether the claim is a \u2018\u2018prior claim,\u201d within the meaning of \u00a7 1 of act 107.\nIn our opinion, the case of Royal Arch Benefit Association v. Taylor, 187 Ark. 531, 60 S. W. (2d) 915, and the cases there cited and reviewed, are decisive of this question. In that case the facts were that a bank, having in hand a general deposit, issued a memorandum, reciting that it had set aside a sum from this general deposit to purchase government bonds for the depositor. The memorandum recited that the bank, which later became insolvent, had charged the depositor\u2019s account with the sum named as an advance payment on the bonds which the bank had undertaken to purchase for the depositor. Upon the failure of the bank, its assets were taken over for -purposes of liquidation by the 'State Bank Commissioner, and the question arose whether the sum mentioned in the memorandum had become a prior claim within the meaning of act 107 of the Acts of 1927. It was held that the writing was a sufficient memorandum to evidence an \u201cexpress trust,\u201d entitling the depositor to the preference given by paragraph 5 of the act, above quoted, and that it should be paid as such.\nIn so holding we said that the memorandum was not ambiguous, but clearly indicated the purpose for which the sum named had b\u00e9en withdrawn from the general deposit, and that the ease was not altered 'because the money 'set aside for the purpose indicated'was already in the bank at the time, of the direction given for its use by the depositor and the application to be made of it by the bank. This statement was made upon the authority of the case of Grossman v. Taylor, 185 Ark. 64, 46 S. W. (2d) 12, in which case we held that the instrument issued by the bank was as effectual to create an express trust as though the money had been checked out and redeposited. In the Boyal Arch Benefit Association case, after stating the above holding in the Grossman case, we said: \u201cThere is no particular form of writing prescribed by the statute, nor any manner pointed out therein, in which the same shall be signed, and, while this might be .called a \u2018charge ticket,\u2019 as contended for by the appellee, it was something more. It was both a charge ticket and a contract and entitled the appellant to a preference over the general creditors and to share with the other preferred or prior creditors pro rata, and to have the balance, if any, classed as a common claim.\u201d See also Albright v. Taylor, 185 Ark. 401, 47 S. W. (2d) 579.\nWe find it unnecessary to determine, under the facts as recited in the stipulation hereinabove copied, whether the $3,000 deposit was a special deposit under paragraph 4 of act 107, as defined in Albright v. Taylor, supra, or was an express trust under the provisions of paragraph 5, as interpreted in the Taylor case, supra, for, if not one, it was the other, and in either case it is given priority by the statute.\nThe $3,000 was a part of an existing deposit, but it was held in both the Grossman case and the Taylor case, supra, that this fact was unimportant and did not alter the character of the transaction. The $3,000 was withdrawn from and set apart from the general deposit. It was no longer subject to the check of the depositor, and his general deposit was reduced by the amount thereof. The memorandum accorded the right to the bank to hold this money for the use agreed upon, to-wit, its indemnification. The memorandum created either a special deposit for this purpose, or an express trust for that purpose, and as a right of priority is given by and exists under the statute in either case, the decree according priority is correct and must be affirmed, and it is so ordered.\nHumphreys, J., dissents.", "type": "majority", "author": "Smith, J." } ], "attorneys": [ "Trieber \\S Lasley and Frauewbhal & Johnson, for appellants.", "Ma/rm