Appellant, doing business at Salt Lake City, Utah, filed three claims with respondent against the Citizens State Bank, of Buhl, each of which was classified under Sess. Laws 1921, chap. 42, sec. 13, subd. 4, as a "contractual" liability to be paid after debts due to depositors. Appeal as to each claim was taken to the district court, and the Commissioner's classification there affirmed, from which judgment claimant appeals to this court. All three appeals were heard together upon a stipulation of facts from which it appears:
That the Citizens State Bank, of Buhl, was engaged in the general banking business up to December 2, 1921, when it went into the hands of respondent for liquidation; that on or about November 23, 1921, appellant transmitted to said bank, at Buhl, Idaho, a draft for $1,399.22, drawn by Ford Motor Company, upon the Daley Auto Company, of Buhl; on or about November 10, 1921, appellant transmitted to said bank a draft for $31.10, drawn by the Ford Motor Company, upon the Whitby Garage, of Buhl; and on or about the _____ day of November, 1921, appellant transmitted to said bank a draft for $35.39, drawn by Ford Motor Company, upon Daley Auto Company, of Buhl; that each of said drafts was accompanied by bills of lading, etc., and instructions that the drafts were "for collection and immediate remittance in Salt Lake exchange only"; that at said times appellant had no account with said bank, and each of said drafts was transmitted for the sole purpose of collection and remittance to appellant "under the usual and ordinary customs of banking business"; that the Citizens State Bank, of Buhl, presented each of said drafts to the drawees named *Page 518 therein and each was "immediately paid"; that the proceeds of the $1,399.22 draft were remitted to appellant by draft drawn upon the First National Bank of Twin Falls, and the other two by cashier's check of said collecting bank; that said draft and cashier's checks were promptly forwarded by appellant for collection, but were never paid because the Citizens State Bank had failed before they could be presented for payment.
It was stipulated that during all the times between November 1, 1921, and December 2, 1921, the cash on hand in said bank exceeded the sum of $8,000.
In construing this act of the legislature, this court has laid down the rule that, in order to impose a trust upon the property of a defunct bank in the hands of its receiver, where the rights of others are involved, the person seeking to establish the trust must trace the fund, or the property into which it has been converted, into the hands of the receiver. And where the fund has been so commingled with the property of the defunct bank as to render its tracing or identification impossible, he must show that the fund, in some tangible way, augmented, or bettered, the estate coming into the possession of the receiver before he can impress a trust upon any portion of said estate. (United States National Bank v. Standrod Co.,42 Idaho 711, 248 P. 16; Cox v. St. Anthony Bank Trust Co.,41 Idaho 776, 242 P. 785. See, also, Bellevue State Bank v.Coffin, 22 Idaho 210, 125 P. 816.)
The burden of tracing the trust fund into the hands of respondent was on the cestui que trust, appellant. (39 Cyc. 532; Lusk D. I. Co. v. Giinther, 32 Wyo. 294, 232 P. 518.) If, by reason of its having been commingled with the assets of the bank, the fund could not be traced, the burden was still on appellant to show that fund had augmented or increased the assets of the Citizens State Bank of Buhl, coming into respondent's possession.
In a recent opinion, written by Commissioner Johnson, this court held that where a draft received for collection is paid by the drawee with a check drawn upon the collecting *Page 519 bank, which becomes insolvent before draft transmitting the proceeds of said collection is presented for payment, such payment by check does not augment the assets of the insolvent bank. (In re Citizens State Bank of Gooding, ante, p. 33,255 P. 300.)
The mode of payment of the drafts in the instant case does not appear from the stipulated facts. It cannot be determined from the record that these drafts were paid in cash, from which, in connection with the other facts and circumstances, it might be inferred that the assets in respondent's hands had been augmented. We are of the opinion that appellant has failed to trace the proceeds of the payment of the several drafts in question into the hands of respondent, or to show that said proceeds augmented or bettered the estate coming into respondent's possession.
In view of the conclusions reached, it is not deemed necessary to discuss questions involving the effect of insolvency of the Citizens State Bank, of Buhl, at the time it received the drafts for collection, or to discuss the effect of appellant's instruction to said bank to remit in Salt Lake exchange only.
We recommend that judgment be affirmed.
Brinck and McNaughton, CC., concur.
The foregoing is approved as the opinion of the court, and the judgment is affirmed.
Costs to respondent.
Wm. E. Lee, C.J., and Budge, Taylor and T. Bailey Lee, JJ., concur. *Page 520