Appeal from the District Court of the United States for the Western District of Pennsylvania; Nelson McVicar, Judge.
Before BUFFINGTON, DAVIS, and THOMPSON, Circuit Judges.
This is a bill in equity to recover as trust funds certain deposits of money and checks in an insolvent national banking institution. The District Court dismissed the complaint on the grounds that neither an express trust resulted from a deposit agreement between the Atlantic & Pacific Company and the Citizens' National Bank, nor a constructive trust from the acceptance by the bank of deposits when insolvent. The Atlantic & Pacific Company appealed.
It appears that the Atlantic & Pacific Company was dissatisfied with its account in the Citizens' National Bank for receiving the deposits of its several stores, and on May 2, 1931, it and the bank entered into a new agreement, wherein it was provided as follows:
"Enclosed you will find our check for Two Thousand Dollars ($2,000.00), which is to be placed on deposit as an open, dormant balance. Verification of this balance will be requested at the close of each of our fiscal quarters. This balance will not be disturbed without written notice from this office, and, unless such notice is received, no withdrawals by check or draft should be honored.
"Deposits will be made daily by our representatives who will leave with you, two copies of the form showing the amount deposited. One of these forms should be verified by your Teller, or proper officer, and attached to your draft, which will be mailed the same day to the First National Bank at Pittsburgh. The other copy will be retained for your records. A tissue copy will remain in the Manager's book which you are requested to verify also.
"Each manager should make a deposit on each business day, and we shall appreciate a wire notification of the failure to do so. Such notice should be sent, charges collect, to us at Dallas Ave. & Lynn Way, Pittsburgh, Pa."
It was customary for the managers of the company's stores to accompany their daily deposits in the bank with a ticket in the following form:
accepts the amount listed below for immediate transfer to the First National Bank at Pittsburgh, Pa., for the account of The Great Atlantic & Pacific Tea ...