Mallett v. Tunnicliffe, as Liquidator

By an opinion filed in this cause on August 7th, 1931, the decree of the Court below was reversed, and the cause remanded with directions to over-rule the appellee's general demurrer to the bill, and for further proceedings in accordance with the opinion filed by the writer, which expressed the views of a majority of the Court.

In that opinion a majority of this Court held that the attempted withdrawal of the sum of $8150.00, on July 23, 1929, which was declined by the cashier of the State Bank of Orlando Trust Company, because of the fact that the appellant-depositor had not given the bank sixty days notice of her intention to withdraw her savings account, as required by the bank's rules and regulations, done at a time when the bank was open for business and presumptively solvent, in contemplation of law converted the sum attempted to be thus withdrawn, into a special deposit for which a preferred claim might be allowed, if the allegations of the bill with regard to this item, should be sustained by the proof.

The correctness of this holding is questioned by the appellee's petition for a rehearing. In view of the public importance of the questions raised, and the effect of our holding on the rights of depositors in banks under similar circumstances, we deem some further discussion of the reason for our holding to be appropriate.

In this connection, it is not amiss to call attention at the outset to the fact that this is not a case where a bank depositor has merely given notice of an intention to withdraw his deposit in the future, but has neither made nor insisted upon a withdrawal in praesenti. In this case, according *Page 821 to the allegations of the bill of complaint, the appellant had done all within her power and all that she was required to do, on July 23, 1929, in order to make a withdrawal of the sum of $8150.00 here dealt with. The bank, and the bank alone over appellant's protest, prevented the actual removal of the money from the bank's vaults by insisting that such money remain in its vaults until the sixty-day notice of withdrawal rule had been complied with. Had the depositor not insisted upon her right to make a present termination of her relations with the bank, subject to the operation of the sixty-day rule as to acquiring her money, the situation here and the resultant ruling might have been different. This is not a case wherenotice only has been given of an intention to withdraw as a depositor. Here the depositor gave no notice but presented her demand and asked for her money, the bank refusing to make a present delivery over of such money to her, but postponing such delivery to a future date under authority of the sixty-day rule.

This Court did not overlook the fact that Blanche W. Mallett did not present her pass book with her request for withdrawal. The bank did not base its refusal to deliver the money to Mrs. Mallett on the ground that the pass book was not presented with her request for withdrawal.

The refusal to permit the depositor's withdrawal of her deposit was on the contrary expressly grounded by the bank on its special rule that required sixty days notice of such withdrawals before immediate payment could berealized, — not before payment in fact would be made.

The rule as to the presentation of the bank book was one that could be waived. We hold that it was waived in this case when the bank refused Mrs. Mallett's requisition for withdrawal of her deposit, not on that ground, but on the ground that sixty days notice had not been given by her. See Page on Contracts, Vol. 5, page 5076.

The account involved in this case was a savings deposit. *Page 822 While a check was used as a medium for the withdrawal of this deposit, such check was not employed as an ordinary check but was in legal effect the evidence of a written demand made by the depositor directly on the bank for her deposit to that extent. This demand was within her legal right to insist upon, — the bank being at the time open for business and being under compulsion of law as well as by its own agreement required to honor its depositor's request for withdrawal of her deposited funds.

The bank by basing its refusal to deliver over the money represented by the requisition on other grounds, in effect acknowledged the rightfulness of the withdrawal and that the title to that much money should eo instanti pass to the depositor. Only delivery of the money was postponed until after the lapse of the sixty days provided for by the rule of the bank.

The depositor was in no sense in the same situation as the holder of a certified check. Her desire to terminate the bank's relation as her creditor was expressed in her offer and demand to withdraw her deposit.

This offer was accepted by the bank which in effect informed the depositor that it acquiesced in her withdrawal as of that date, but desired the privilege of retaining her money on hand in the vaults of the bank for sixty days longer, not for the depositor's convenience, but for the bank's convenience, not with her consent, but against her will at that time.

So long as the bank remains open for business under the laws of this State a depositor has the legal right todemand the immediate termination of his relation as a creditor of the bank at any time.

This such depositor may legally accomplish by presenting his requisition in proper form to the bank, accompanied by whatever evidence the bank may require to satisfy itself as to the identity of the depositor, such as presentation of *Page 823 his bank book or the like, when insisted on by that institution.

When such demand is once made in legal form, the bank cannot, if open for business and therefore presumptively solvent, without the consent or acquiescence of such depositor, prolong the relationship of creditor and debtor. No bank can lawfully remain open for transaction of a banking business, and refuse to permit withdrawal of its ordinary general deposits, although it may, pursuant to lawful rules and regulations adopted by it as authorized by law or contract, postpone for a reasonable time the consummation of this termination of the creditor's relation so far as the mere delivery to him of the depositor's funds is concerned.

The demand for withdrawal of the $8,150.00 involved in this case was, according to the allegations of the bill, made on July 23, 1929. The bill does not show any consent or acquiescence at that time on Mrs. Mallett's part to continue the relationship of debtor and creditor with the bank subsequent to that date. So it must necessarily be regarded that on that date the relationship of debtor and creditor previously existing was terminated and some other relationship substituted.

What was this substituted relationship?

Nothing more or less than a trust relationship under which the bank, as trustee, continued to hold the sum of $8,150.00 (the title to which had passed on July 23, 1929, to Mrs. Mallett) for a further period of sixty days in order that the cash assets required to be kept on hand might not be removed from the vaults of the bank until other funds to take their place had been realized by the bank through the liquidation of its securities sufficient to replace the $8,150.00 which had ceased to belong to the bank the instant the relationship of the depositor had ended.

The sixty-day rule was adopted by the bank against the will of the depositor, although it may have been within *Page 824 the permissible scope of the deposit agreement to such extent as to be within the lawful power of the bank to make and to bind the depositor to yield to it after its adoption.

But such sixty-day rule did not operate to prolong therelationship of the depositor as that of debtor and creditor, after the depositor had lawfully and in fact terminated such relationship. The right to adopt and the adoption of the "sixty-day rule" was intended to harmonize, — not conflict with, the depositor's right of immediate withdrawal of deposits, as embraced in her agreement with the bank when the deposit was made and as contemplated by the laws of this State governing banking.

Construing both rights together, we are forced to the conclusion that where a bank, for its own convenience, invokes the privilege of requiring its ordinary general depositors in savings accounts to give sixty days notice of intention to withdraw savings accounts from such bank, and adopts such a rule for its own convenience without the consent of its depositors, although within its contractual and legal rights as against such depositor to enforce, the relationship of a depositor attempting to withdraw his deposit immediately without giving the required notice, terminates eo instanti upon performance of all acts necessary on the depositor's part to terminate his account with the bank, and while the bank may have the right thereafter to refuse to pay over the cash represented by the withdrawn deposit until the notice period has expired, its relationship during such period and prior to the actual delivery over to depositor of the money withdrawn, is that of trustee, the title to the fund withdrawn having passed to the depositor immediately upon his completed act of withdrawal from the bank in the first instance.

The mutuality of agreement between the bank and its depositor which is necessary under the above stated rule to convert the relationship from that of a general depositor to that of a special depositor is found in the nature of the *Page 825 depositor's agreement with the bank, which is consented to by the bank in its acceptance of deposits, namely, that depositors shall have the right at all times to withdraw their deposits and thereby terminate the relationship of creditor of the bank on demand. The demand having been made and acknowledged by the bank, the previous relation is in contemplation of law necessarily ended, giving rise to a succeeding relationship in which title to the deposit becomes vested in the depositor, the bank holding the fund as trustee.

The application of the foregoing rule to the instant case brings it well within the rule referred to in appellee's petition for re-hearing, which has been so aptly stated by Mr. Chief Justice Buford in Amos v. Tinsley, 135 So. 397, 102 Fla. 1, as follows:

"The general text applied to determine whether or not a claimaint is entitled to preferential payment from the assets of an insolvent bank in the hands of a receiver is that it must appear that the funds in question were in the Bank's possession as agent, bailee or trustee; that such funds reached the receiver's hands in some form; and that the assets brought under the receiver's control were larger by that amount than they would otherwise have been. In determining the status existing between appellant and the bank itself, the controlling element is the mutual intention and purpose of the parties with respect to the fund." (Italics ours).

The bank being a trustee for the depositor with reference the $8,150.00 hereinbefore referred to, there was equity in the bill concerning this item. Nothing, however, in this opinion or in the original opinion is to be construed as precluding the joinder of issue on the facts and inferences from facts alleged in the bill, that being a matter of proof.

We simply hold the bill and facts alleged there as being sufficient to state a ground for equitable relief. If any matters of defense, affirmative or otherwise, exist, they should be asserted by appropriate answer upon remand of the cause. *Page 826

Rehearing denied.

WHITFIELD, P.J., AND TERRELL, J., concur.

BUFORD, C.J., concurs in the opinion and judgment.

ELLIS AND BROWN, J.J., concur in the conclusion.