statement is that the agreement was oral and the letters are clearly referred to me as evidentiary of the intention of the parties.
The general rule is too well settled to admit of question that, in the absence of any special agreement providing for a trust or agency, a deposit in a bank to be credited to the depositor creates the relationship of a debtor and creditor. It is agreed of course that this was not an ordinary deposit, but that it was made under a special agreement of some kind. Whether it was the purpose of this special agreement to create a trust relationship or whether it was merely to provide certain incidents as to transmission of balances, receipts of deposits, making up pay rolls, etc., for the convenience of the parties, was the matter at issue. The court did not exclude the letters from its consideration, but carefully considered all their terms, as though they had been incorporated into the oral agreement or as though the agreement had been partly oral and partly written. The court is still of the opinion that the evidence before it fails to show any intention to deny to the trust company the right to use the funds deposited with it in what was called the deposit account.
The plaintiff has made the point as to the sum of $40,642.67 deposited with the trust company on Saturday, October 3, that, regardless of any general arrangement, a trust arises because (a) the trust company was obligated to deliver this amount in cash to the plaintiff's depository in New York on Monday, October 5, and failed to do so. This argument, however, only goes to the general intention of the parties. If I thought that the letters relied upon by the plaintiff of September 9 and 11, 1925, meant that the trust company was bound to deliver to the plaintiff's depository in New York the identical currency, bills, and coin received by it, I would have to revise my view as to the major intention of the parties in the whole transaction. This, however, was certainly never intended. Nor do I think that there was any intention that currency in specie was to be physically transported from the trust company's New York correspondent to the plaintiff's New York depository. The letters of September 9 and 25 refer to "cash funds" and "current funds." All that the plaintiff is insisting upon is that banking arrangements be made so that the amount of money reaching the trust company's New York correspondent on Monday be in its depository available to be drawn upon by the afternoon of the same day. The plaintiff objected to the use of cashier's checks on the trust company's New York correspondent because they had to be cleared and consequently could not be drawn upon on the same day. Any arrangement which would make the credit balance available on Monday was satisfactory to the plaintiff. I find nothing in this correspondence inconsistent with the intention that the deposit while in the trust company's hands should be used for its general banking purposes.
There are also cases of course which hold that, in the absence of any trust agreement, the receipt by a bank of deposits at a time when it knows it is insolvent will create a trust ex maleficio. Ellerbe v. Studebaker Corporation (C.C.A.) 21 F.2d 993. The trouble with this position is that there is nothing in the bill and answer from which the court can find that the trust company was insolvent on October 3, or at any time prior to the closing of its doors on October 5.
Nor can a trust be implied from the failure of the trust company to pay the amount of deposits which it had on hand to the plaintiff's New York depository on Monday, October 5. If the original agreement did not contemplate or create a trust, the fact that it has been broken will not accomplish that result. Otherwise any general depositor could turn his general deposit into a trust merely be presenting a check and having payment refused. If the relationship was that of debtor and creditor, the fact that the debtor failed to pay in accordance with the terms of the agreement does not constitute it a trustee.
The court has carefully considered all the arguments presented in the plaintiff's comprehensive and well-considered brief, but adheres to the views expressed in the original opinion and reaffirms the order for the dismissal of the bill.
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