ARK:1 ROYAL ARCH BENEFIT ASS 7 N V. ' TAYLOR: 531 ROYAL ARCH RE,NEFIT ASSOCIATION V. TAYLOR. • 4-3022 • Opinion delivered May 29, 1933. 1. BANKS AND BANKING–L INSOLviX6i—TRu g i iurin.—Where a bank, holding funds of a deposifor issued a memOrandum reciting that it had set aside a sum from its general deposit to pukchase government bonds for the depositor, on the bank's subsequent insolvency without having purchased the bonds, it will be held a . trustee, and the depositor entitled to a preference. •• BAiv KS AND BANKING—TRUST ' FUND—SUFFICIENCY OF MEMORAN-num.—A memorandum issued by a bank .reciting that the bank charged its depositor's account with a sum named as a • dvance payment on bonds which 'the bank undertdok to 'puichase for the depositor was a sufficient memoranaum : to -evidence 'an "express trust," entitling the depositor to a preference within Acts 1927, No. 1071 . • Appeal froth Ashley-Chancery. Court; E: G. Ham-moek, Chancellor.; reversed.. -ffeipio A. jones; Sam Rorex and Leon . B..Catlett,' for appellant. John Baxter, for appellee. . BCTLER, J. Beginning '• vit1i the 'Year . 1919',jthe -peilant as,so . ciation; : acting thibugh its IreaSurer D: Yt. Perkins, began fo_dep6sif a part. of its funds in . the Wit= mot Bank; cOntinuing its'business wi -th tliis bank until 1930 when it had On time deposit between fift6en.'and sixteen thousand dollars. Perkins was a resident of the town in which the bank was located and was authorized by the appellant to •urchase' with the funds- on -hand
532 - ROYAL -AMIN: 'BEN-EFIT AS . SN V. TAYLOR.; [187 aforesaid $10,000; of ,governrnent. bonds. A .warrant was issued to Perkins hy, the association in the sum of $10,600 for that purpose,and to pay whatever premium and other expenses necessary and incident to the purchase. Perkins surrendered to the bank time certificates of deposit, and the bank in turn placed the entire:deposit to' the checking account of the association in order to facilitate the puP chase of the bonds, undertaking to .obtain the bonds as speedily as possible. From time to time Perkins made inquiries regarding the-purchase and finally informed the bank that the appellant was becoming impatient and contemplated obtaining the,bonds through a bank in EsOrrest City where it maintained its home office. On being informed that negotiations for the purchase of the bonds were then in 'progress and would soon be consummated, Perkins was induced to defer this action for a time. On October 8, 1930; the bank issued the fellowing statement :. , " WILMOT BANK "Wilmo - t, Arkansas. "Charge. Wilmot, Arkansas, 16/30/1930 "D. R. PERKINS, Treas: "We today charge your:account as follows: Advance payment on bonds $10,215.'.' . Thi's statenient Was deliveredlo 'Perkins at the , end of the month and was noted on the bank's statement issued at the .end . Of each month to the cnstonier showing the items of debit and credit .for the . month then ending with vouchers attached. At- this time Perkins was informed that the bonds had been purchased, that they were in Washington for the purpose of being registered, and would : be received in some , two or,three weeks. Per- kins did riot receive the bends' within - the time speCified. He Made inquiries at the bank and was ' Put off by various eicUses until the bank closed on December 11; 1930, when he discovered that the bonds had never , in fact been purchased. ,* By proper proceedings the appellant sought to have its claim allowed as a preferred claim in the insolvency
_ARR.] ROY‘AL ARCH BENEFIT ASS'N .7). TAYLOR. 533 proceedings, and from . a decree , of the chancellor denying the smile this appeal :is prosectited.: : • . • The evidence is not in dispute, and we-. conclude it justified the appellant'S contention. . Appellee cites and relies upon the cases of .Taylor v.- Whaley,. 183 Ark. 598, 37 S. W. (2d) 702, and • T aylor v: Dierks Lumber ice COal Co., 183 Ark. 937, 39 S. W. (2d) 724, tnsustain the -decree otihe lower court. Neither of these cases however is authority-for the position assumed. 14 both oases there was nothing between the bank and the depositor to create a trust relationship, and them was no writing evidencing any such intention. In . the Case at bar the action of the . bank in informing the depositor that it had. set aside from the general deposit the sum of $10,215 for the purpose of* procuring bonds and the issuance by it of the memorandum aforesaid constituted this.sum a trust fund; and the memorandum was a .sufficient writing to bring the transaction, within subdivision 5, § 1 of act No. 107 of the : Acts of 1927: "A prior creditor shall be * * the beneficiary of an express trust * * * which was evidenced by a writing signed by the bank at the time thereof. 3i The. memorandum is not unlike the one under consideration in the case of Albright v. Taylor, 185 Ark. 101, 147 S. W. (2d) 579.-In that case the collector had deposited a sum of money sent him by A. Guthrie & CoMpany with which to pay * their taxes, and the bank issued to hint the following receipt : "D.: J. Nance,- Col. . . Spec. Acct. "Held in escrow to cover 1930 taxes A: Guthrie and Company,- St. Paul, Minnesota. Subjeet , to check of 'collector upon issuance of 1930 tax. receipts.". . We there held that under the circumstances4he deposit became impressed with a trust, ' and that the 'Mem-oranduin issued by the bank was "a writing-signed by the bank at the:tiMe :thereof," within' the Meaning Of the statute.. In the instant case the memorandum is not ambigu--ous, but clearly indicates the ip urpcise for which the money was- accepted, and it does not alter the' case 'that the
money set aside-for the purpose . indicated was. already in the bank at the time of' the direetion given for its use bY -appellant and its purpOrted application On the part of the bank. As was held in Gro:s3man v. Taylor, liS5 Ark. 64., 46 S. W. (2d).1.2, the instrument issued by the bank was as effectual to.create an express trust as though the money had -. beeu checked out and redeposited. There .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 " charge ,ticket," ,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: The decree Of 'the trial eourt is 'therefore reversed, arid the cause remanded for further preceedings accordT big te• laW and not inconsistent with this . opinion. • •
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.