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(SYLLABUS) When money is deposited in bank by court under the agreement with the cashier as set out herein, which funds are to be paid out upon order of the court, such deposit is trust fund.
Heard before Goss, Rose, Good, Eberly, Day and Paine, and Shepherd, District Judge. PAINE, This is an action to establish preferred claim with the of the Farmers & Merchants State Bank of McCook, in the sum of by reaof deposit to the credit of the intervener, H. Cheney, referee partition. In June, 1931, Cheney, practicing attorney at McCook, was pointed referee in partition by the district court in the case of Harsch Harsch. He filed his report, showing that the real estate could partitioned, which report was approvby the court, and he was directed to sell the property. The district court fixed the amount of his bond for the sale of the property at The referee then interviewed Dale Boyles, cashier of the Farmers Merchants State Bank of McCook, and offered that, if Boyles would sign the bond with him as referee, the money received from the sale should deposited in his bank until it was ordered paid out by the district court. Thereupon, Mr. Boyles signed the bond, together with Suess. The land was advertised for sale, and sold August 1931, on which day the referee received two checks one from Leonard and one from Rudolph Harsch for $1,320, each being part payment on land purchased by each of them. the same day, these checks, which had been drawn upon the Bartley State Bank, were deposited in Mr. Boyles' bank, the deposit showing the posit as being made by H. Cheney, Referee Harsch Estate." No checks were ever drawn on this account after was made. Objections were filed in the district court to the sale, and after the hearing thereon the trial judge refused to confirm the sale, and on November 28. 1931, made an order setting aside the sales, and directing: referee is ordered return to the bidders the deposits made on their bids." The Farmers Merchants State Bank of McCook had been closed on October 1931, and, therefore, the referee could not comply with the order of the district court. March 31, 1932, the referee filed petition of intervention, setting out all of the facts in said matter, and alleging, among other things, "that said funds were deposited by this referee and received said bank as trust fund then that the same were deposited by said referee to be paid out upon the order of the district On April 1932, the receiver of said bank filed his answer, alleging that the deposit in question general, unsecured deposit, and that the trust relationship of the referee not transferred to the bank. Hearing on said matter was had upon May 1932, and the case taken under advisement, and on June 27, 1932, the court found generally that the claim of the referee for was not regular or general bank deposit; that at the time of the deposit the referee was acting under the order the district court in partition proceeding. and that when the land was sold the down payments placed in the said bank under the agreement with Dale Boyles, as set the of intervention, and the court petition directed that the classification of the claim of the referee as general, unsecured claim be set aside, and said claim be allowed as trust fund, and ordered paid out of funds availany able. Motion for new trial, setting out that the judgment was contrary to law and not sustained by the evidence, was duly filed, argued, and overruled. In the able argument on behalf of the receiver, it contended that the bank was not required to do anything but to honor the referee's checks, and the holding of the trial court is criticized, by saying that the proposition simply this: That the referee, in substance, said to the banker, you will do great favor and sign my bond for $25,000, then will permit you to do me another great favor, and hold the proceeds of the sale as trust funds;' and it is contended that this does not sound like proposition that either lawyer or banker would enter into, and that the fact that the bank had knowledge of the general purpose for which the funds were to be used does not change the deposit from general deposit into trust fund, citing, in support thereof, Bank of Crab Orchard Myers, 120 Neb. and Diehl Johnson, 123 Neb. 699. It may be contended that the original checks were not held by the bank, but the referee and the bank would have run risk if the checks had not been put into circulation immediately. The total amount of deposits in the bank at the close of business on the date of the deposit of the two checks was $81,810.09, and on October 24, 1932, when the bank failed, the cash on hand and in correspondent banks $26,243.77. Trust funds placed in bank for particular purpose are sufficiently traced into the hands of the bank's receiver to entitle their owner to claim them if the fund delivered to the receiver exceeded the amount of the trust, although the money deposited not have been kept intact. may Hudspeth Union Trust Savings Bank, Ia. 706, 378, 466. In the notes in following the case of Hudspeth Union Trust Savings Bank, supra, it is stated as general rule: deposit made in bank with the distinct understanding that it is to be held by the bank for the purpose of furthertransaction between the depositor and third person, or where made under such circumstances as rise to necessary implication that it is made for such purpose, the deposit becomes impressed with trust which entitles the depositor to preference over the general creditors of the bank where it becomes insolvent while holding the deposit." See Corporation Commission Trust 194 N. Car. 125, R. 382; Kujawa, 175 Minn. 88, The law relating to partition sales provides, in section 20-2199, Comp. the sales are disapproved, the money paid and the securities must be returned to the respectively entitled thereto." This clearly implies that the money longs to the bidder until the sale confirmed, and that the bidder, or the referee in his behalf, had right to follow that wherever money he could trace it, and when he found the possession of one who had knowledge of the facts, he could cover it. When there is an agreement with bank officers that certain money placed in a bank for the specific purpose of being held intact until the completion contemplated land sale by referee in partition, and then to be turned over to the parties entitled thereto, the money so placed the bank may be reclaimed trust fund, where the bank becomes insolvent while holding such money. State Citizens Bank, 124 Neb. Capital Nat. Bank Coldwater Nat. Bank, 49 Neb. 786, Am. St. Rep. 572, 172 434; State State Bank of Touhy, 122 Neb. 582. The judgment of the district court, holding that the deposit of money by the referee in partition was for specific purpose known to the bank, thereby constituting the deposit trust deposit, is hereby AFFIRMED. deavors to induce the first party to increase bid, the first bid thereeffect rejected. 2. If an to purchase jected either by an absolute terms or by the lapses. an offer to pur hase jected, it cannot be acceptso as to create nding contract sale, unless after such rejection the is renewed by the or he consents subsequent ceptance.
Heard before Eberly, Day and Paine, JJ., and Begley, Landis, and Meyer, District Judges. District Judge. The Wisner State Bank became solvent in 1931. H. Luikart wa duly appointed receiver and Howard Doty was in active charge of the bank under the receiver. On 1932, the receiver filed application with the district court for Cuming county, Nebraska, for authority sell the bank building to one Christian Lorensen for and the $4,500 fixtures for $500, alleging that he had an offer from Lorensen of said sums. Lorensen filed objections said confirmation, alleging among other things that after he made said offer Doty notified him that his bid for the building had been raised and asked him if he desired to bid again, whereupon he told Doty that he would not and that he was through, and he also alleges that he told Doty then and on that his offer was withdrawn. hearing, the district court sustained the objections and the receiver has appealed. The record discloses that the order appointing the receiver was the usual form, and among other things stated that said l'receiver further authorized and empowered sell and dispose of any and all property, both real and personal, belongto said bank. to the best possible advantage subject to the proval the court, and as provided Pursuant thereto and without other or more specific authorization or direction, Doty set about March, 1932 to offers for secure the purchase of the bank building He first received bid of one Richmond. This bid was raised to by Lorensen, appellee hereThereafter Richmond raised his bid to and then Lorensen March bid for the building and $500 for the bank fixtures, his bid for the fixtures being however, upon his offer for the buildbeing accepted. Doty then solicitand on or about March 29 secured further bid from Richmond in the sum of $4,600 for the building. After this bid and on the same the following day, Doty called Lorensen at his home and told him his bid had been raised and endeavored to induce Lorensen to bid It appears that when Doty took the Richmond bid he told him that he did not know whether his or Lorensen's offer would be accepted. Doty's representations to Lorensen were not qualified. Lorensen told Doty that he wanted to bid again he would do in open court. Lorensen also testified that Doty at that time told him that he and that he then told Doty he through" and was his bid. Doty denies this, but it undisputed that Lorensen repeated later to member of the depositors' committee that was use bidding on that if he wantto bid again he would do so in open court, and that he told Doty on April and again on the 6th that he withdrawing his bid. He never did bid again. After Lorensen's refusal bid further, the receiver's agent deavored to secure bid from Richmond on the fixtures. Being unsuccessful, it was then decided that the Lorensen was the best, and kart testified that he approved same on April This was done without curing renewal of Lorensen's offer, without his consent, and apparently without his knowledge.
The informal bidding extended over period of two weeks. deposit was made to accompany each bid and they each evidencby writing in the of nature contract to purchase signed by the bidder only. The Lorensen contract for $4,500 that provided it was subject to the approval of the department of trade and commerce and the approval of the district court for Cuming county, Nebraska. The dence is not clear this point, but is assumed that all of the several contracts contained the conditions. Doty testified that bidders were of the aware other man's
It is conceded that Lorensen's bio of $4,500 for the building and the writing which he signed was proposal or offer to purchase which could be withdrawn at time any fore acceptance. is also elementary that until withdrawn said offer subject to acceptance or rejection.
Appellant argues that there was little sale for the fixtures apart from the building and that Lorensen's bid was the best said bid accepted by the receiver April 1932; that it was not withdrawn prior thereto; that the receiver was powerless to Lorensen after his bid was and that was an abuse of discretion under the circumstances for the court to do other than to confirm said sale. number of cases are cited to the effect that in judicial sale the fficer conducting the sale is powerless to release bidder once bid accepted, and other cases holding that, if the bid accepted is the best bid and the sale has been free from fraud and mistake, binding contract results and its confirmation follows matter of course. Appellant's argument is bottomed the proposition that this was judicial sale and the assumption that the Lorensen bid still was subsisting at the time when Luikart he cepted it. It is to considunnecessary whether this was or was not judicial sale, for in our the opinion undisputed evidence discloses that said offer was in effect rejected before any move was made to accept The cases cited deal with only the right of an officer to release successful bidder in judicial sale after the bidding is concluded and the property struck off to such bidder. No authority is produced which denies the officers right to receive higher bid at any time before the closed or which discusses the status that automatically follows the ceipt of such higher bid. As we view this is the important point in this It appears from the testimony that Doty first directed his efforts toward the sale of the building alone. Apparently the fixtures were never tioned until Lorensen made his bid, and Lorensen on tion testified that even then Doty said the fixtures were separate deal" and could not be put in on the estate. The contract to purchase the building evidencing the Lorensen bid for $4,500 is silent as to fixtures. separate writing was made to cover his bid for them. In our opinion when Doty went to Lorensen's home and told him that had $100 higher bid for the building and failed to advise Loren that he had received said bid conditionally and endeavored to induce Lorensen to raise his bid, that was tantamount to rejection of Lorensen's last offer, and Lorensen thereby became as effectually releastherefrom as if Doty had said to him: "Lorensen, out. you are have higher bid. If you want to considered further it will be necesfor you to give us another offer." Doty might have told Lorensen, he did Richmond, that he had ed the Richmond offer conditionally and that under the circumstances Lorensen's bid might be considered the best offer. Doty did not choose to Rather on the strength the statement that he had higher offer he sought, without disclosing the full facts, to induce appellee to offer larger sum. should be noted that Lorensen testified that Doty actually did say This would constitute rect refusal and rejection of his bid, but in any event, having under the undisputed evidence in effect represented to Lorensen that his offer had been superseded, it follows naturally that contractual obligation could thereafter be based on such offer and that the purported acceptance thereof on April 1932, came too late. the offer rejected, either by an absolute refusal or by an ceptance not identical with the terms the offer, or by counter offer, unless the offerer consents to the ditional acceptance or counter offer, the offer lapses and becomes invalid, and it cannot thereafter be accepted as to create binding contract of 55 Having thus decided, it becomes unnecessary for us to determine the question of withdrawal. Lorensen's offer having been rejected, it was necessary him to withdraw this regard however, may be noted that Lorensen testified positive'y that, the same day Doty told him of the last Richmond bid, he went to the bank and told Doty he through and would withdraw his and to let Richmond have it. This denied, but Lorensen's conduct in lation to this as disclosed manner, throughout the evidence, tends to port his testimony on this point. The action of the trial court is
AFFIRMED.
