This case well may be called a sequel to State v. Thompson,37 N.M. 229, 20 P.2d 1030. *Page 277 The defendant in the criminal case appeared as the star witness of the plaintiff, and, on his bank statement showing a credit balance of $26,578.06 on the 14th day of November, 1928, resulting from the deposit of bogus drafts by Thompson, plaintiff's learned counsel, again relying upon this false book credit, asked for and obtained a verdict for the balance due on a check for $21,370, and interest thereon from November 14th, notwithstanding that after the check was presented on November 14th and before December 4th Thompson had made a payment thereon of at least $11,000, more than plaintiff's fair share of this insolvent's assets.
Mr. Justice BICKLEY'S consistent position is not concurred in by the other members of the majority, who, as I understand the decision of the court, based their judgment upon the theory that the defendant bank is liable because it paid out the $48,000 received December 4th, pursuant to the verbal orders of Thompson; an admitted fact. See Pierson v. Union B. T. Co., 181 Ky. 749,205 S.W. 906, 2 A.L.R. 172, as to payment by banks on verbal order.
Since the case turns upon the receipt and disbursement of the deposit received December 4th, a more detailed statement of facts relative thereto seems justified. Thompson had drawn drafts on the McFee Commission Company for about double the amount of the remittance of December 4th, all of which drafts had been dishonored. Thompson testified that this money received December 4th was "wired in," and the testimony of the cashier of the bank is as follows:
"Q. According to this Exhibit B on December 4th, 1928 you credited Thompson's account in your bank with a deposit of $48,657.54. You recall that transaction? A. Yes sir.
"Q. Do you know where that money come from? A. Yes sir.
"Q. Where? A. That was deposited by the McFee Commission Company for the credit of the First National Bank of Hot Springs to a bank in Saint Joseph, Missouri.
"Q. And the credit was made by wire? A. That is to say — I received a telegram from the bank in Saint Joseph, Missouri that the McFee Commission Company had deposited this amount of money with them for the credit of the First National Bank of Hot Springs for the use of E.L. Thompson. This amount represented the final settlement of cattle shipments made by Thompson to the McFee Commission Company.
"Q. If you recall, state what amount of checks there was in your bank at that time, December 4th, drawn by Thompson against his account in your bank that had not been paid? A. When we received this notice by wire I took all the checks that were in the First National Bank of Hot Springs for collection and added them on the adding machine and they totaled over $160,000.00. These checks were taken in the back room and Mr. Thompson *Page 278 designated what checks to be paid and charged against this balance."
Under this state of facts, treating this money as in the hands of the defendant bank, it was a specific deposit tendered by the McFee Commission Company in settlement, and, until accepted by Thompson, remained their property. The Trustees of Howard College v. Pace, 15 Ga. 486; Mayer Lowenstein v. Chattahoochee National Bank, 51 Ga. 325; Hill v. Arnold Co., 116 Ga. 45, 42 S.E. 475; Brockmeyer v. Washington National Bank, 40 Kan. 376, 744,19 P. 855; McGorray v. Stockton Savings Loan Soc., 131 Cal. 321,63 P. 479; Patek v. Patek, 166 Mich. 443, 131 N.W. 1103; Id.,166 Mich. 446, 131 N.W. 1101, 35 L.R.A.(N.S.) 461 and note; Borough of Deal v. Asbury Park Ocean Grove Bank, 118 N.J. Eq. 297,178 A. 790; Keyes v. Paducah I.R. Co. (C.C.A.) 61 F.2d 611, 86 A.L.R. 203; Appeal of Reicheldifer, 115 Pa. Super. 454, 176 A. 52; Dustin Musick v. Hodgen, 38 Ill. 352; Leech v. First National Bank, 99 Mo. App. 681, 74 S.W. 416; Moreland v. Brown (C.C.A.) 86 F. 257; Mester v. Quincy National Bank, 163 Ill. App. 645; 7 C.J. 631; Sindlinger v. Department of Financial Institutions (Ind.Sup.) 199 N.E. 715; State ex rel. Good, Atty. Gen., v. Platte Valley State Bank of Scottsbluff (Neb.) 264 N.W. 421.
In the case of Brockmeyer v. Washington National Bank, supra, the syllabus is as follows: "Where a savings bank delivers to a national bank money, drafts, notes, securities, etc., to pay a creditor, the relation between the debtor bank and the national bank is that of principal and agent, until the creditor assents or acts upon the transaction; and the assent of the creditor will not be presumed when he has no notice or knowledge of it."
The text-writers seem to be in accord with the above statement: "* * * The deposit was made for a specific purpose and before the person in whose name it stood could treat the credit created by it as absolutely his own, it was necessary that he should accept it as made." 5 Michie on Banks Banking, c. 9, § 86, p. 179.
"Specific Deposit. — When money is deposited to pay a specified check drawn or to be drawn, or for any purpose other than mere safe-keeping, or entry on general account, it is a specific deposit, and the title remains in the depositor until the bank pays the person for whom it is intended, or promises to pay it to him." 1 Morse on Banks Banking (6th Ed.) c. 13, § 185.
Nor can the bank receiving the deposit change its character by wrongfully placing it to the credit of the depositor in his general checking account. In re North Missouri Trust Co. of Mexico, Mo. (Mo.App.) 39 S.W.2d 412; Spicer v. Round Prairie Bank, 228 Mo. App. 525, 71 S.W.2d 121; Central Coal Coke Co. v. State Bank of Bevier, 226 Mo. App. 594, 44 S.W.2d 188, 190.
In this last case the following appears: "Also in Ellington v. Cantley (Mo.App.) 300 S.W. 529, 531, it is said: `If the facts *Page 279 and circumstances surrounding the making of a deposit show such deposit to be special, the bank receiving the deposit could not change its character by wrongfully placing it to the credit of the depositor in his general checking account.'"
It is evident that the defendant bank had no right to place this money in Thompson's general account, and that no right was conferred upon plaintiff by the unauthorized act of the defendant bank. In the case of Kimmel v. Dickson, 5 S.D. 221, 58 N.W. 561,562, 25 L.R.A. 309, 49 Am. St. Rep. 869, the court said: "We apprehend that no different principle is involved because one of the parties happens to be a bank. * * * That he, or the bank in this case, had, without the consent of Kimmel, diverted the money and used it for some other purpose, ought not to affect Kimmel's rights. Abuse of a trust can confer no rights on the party abusing it, or on those claiming in privity with him."
Under the instructions of the court it was necessary for the plaintiff to prove that funds were available to pay the check. Lest it be inferred that Thompson left funds with the defendant bank out of the $48,000 received December 4th, which under all the authorities was at his disposal, with which to pay the plaintiff's check, I trust I may be pardoned if, in the interest of clarity, I again quote from the record. Thompson testified: "Q. Why didn't you go to Mr. Pankey if Mr. Matson told you that Mr. Pankey had this check, if you wanted Mr. Pankey's check paid, and tell him to put this check in there and put it in quick? A. Well, there was enough checks in there to be paid without me running anybody down to get to pay one and if he had it with him I couldn't see where I should chase him over the country to find him because that $48,000.00 was there and there was other checks sufficient to take that up and I didn't consider that Mr. Matson could hold that open as this check was gone and the other checks there for collection. I don't think it was possible for him to hold it while I chased around hunting for somebody."
The defendant bank in taking plaintiff's check for collection was acting without consideration, other than the accommodation of a customer. If it had disposed of the deposit received December 4th as plaintiff claims it should have done, without notifying and consulting Thompson as to his wishes, it would have been a betrayal of a trust. To be mulcted in damages because it did not betray a trust is a judicial outrage.
I dissent.