CY-PUBLIC FUNDS TRUST RELATION. allowing or expressly forbidding it, the act of In the absence of a statute either expressly the clerk of the district court in placing the funds in his official custody on general deposit in a bank, to his credit as such officer, is not illegal, and therefore the title passes and no trust results. for reasons stated in the opinion. The prin- 14. BANKS AND BANKING 80(7)-INSOLVENciple involved, which is that in awarding alimony and in adjudicating property rights in a divorce case the district court may deal with the homestead as with other property, was approved and applied in the case of Blankenship v. Blankenship, 19 Kan. 159. In that case the husband, having title to the homestead, was granted a divorce. Alimony awarded the wife was made a lien on the homestead. The homestead was sold to satisfy the lien, and the sale was confirmed. It is said that under no circumstances could the husband be awarded alimony, and that the only discussion in the books relates to awards to the wife for alimony and not to awards to husbands. This is a play on words. The husband was not awarded ali mony and was not awarded anything else in the sense in which alimony to a wife is awarded. The court evidently thought the [Ed. Note.-For other cases, see Banks and Banking, Cent. Dig. § 191; Dec. Dig. 80(7).] Appeal from District Court, Woodson County. Action by Lucy J. Phillips, as Clerk, etc., against the Yates Center National Bank and another. From judgment for plaintiff, defendants appeal. Reversed and remanded, with directions. Altes H. Campbell and G. R. Gard, both of Iola, for appellants. Lamb & Hogueland and George R. Stephenson, both of Yates Center, for appellee. MASON, J. The Yates Center National Bank became insolvent. At the time it closed its doors Lucy J. Phillips, the clerk of the defendant should have the homestead, but that the entire homestead property was too much for her. So the award of the entire homestead was in effect reduced in value by the sum of $700 to be paid to the husband,posit to her credit as such officer the sum of and to be a charge against the property in his favor. The judgment of the district court is affirmed. All the Justices concurring. (98 Kan. 383) district court of Woodson county, had on de $2,703.76. She brought an action against the receiver for this amount, on the theory that it constituted a trust fund. She recovered a judgment, and the defendant appeals. [1] 1. The contention is made in behalf of the plaintiff that she placed the funds PHILLIPS v. YATES CENTER NAT. BANK which she held as clerk in the bank as a et al. (No. 20253.) * (Supreme Court of Kansas. June 10, 1916.) (Syllabus by the Court.) 1. BANKS AND BANKING DEPOSIT EVIDENCE. 154(8)-SPECIAL Where deposits in a bank are made from time to time to the credit of the depositor as a public officer, entry thereof being made in a passbook, and checks are drawn and paid in the ordinary course of business, monthly statements being rendered, testimony that it was the purpose of the depositor that the funds should be kept separate and should be always there so that they could be checked out at any time, affords no basis for regarding the amount on hand as a special deposit. [Ed. Note.-For other cases, see Banks and Banking, Cent. Dig. §§ 526-529; Dec. Dig. ☺☺ 154(8).] 2. BANKS AND BANKING CY-PUBLIC FUNDS. 80(7)-INSOLVEN The claim of an officer for funds deposited by him in a bank which has become insolvent is entitled to no priority of payment merely be cause of their public character. [Ed. Note.-For other cases, see Banks and Banking, Cent. Dig. § 191; Dec. Dig. 80(7).] 3. BANKS AND BANKING CY-PUBLIC FUNDS. 80(7)—INSOLVEN Where public funds are deposited in violation of law in a bank which has knowledge of the facts, the title does not pass, and a trust results, which, in case of insolvency, may be enforceable against the receiver. [Ed. Note.-For other cases, see Banks and Banking, Cent. Dig. § 191; Dec. Dig. 80(7).] special deposit. It was shown that for a time she deposited money received in her official capacity, together with that belonging to herself, in her name individually, without anything to indicate its character. Within a few months, however, she changed this practice and caused the funds in her official custody to be transferred to her account as clerk, thereafter making deposits and checks by that designation. A running account was kept and deposits were made and checks drawn in the usual course of business, for a period of over four years, an ordinary passbook being used and monthly statements being rendered. She testified concerning the transfer: "I told Mr. Ricker [the president of the bank] the most of the money on deposit was held by me as clerk of the court, and wanted it arranged so that it would show that it was office money and not a personal account, and he suggested that I deposit it in this way so that it would show kept separate. * wanted to change it and put the clerk's money Told him I to a deposit so it would be separate." The question was asked: * "But your idea was that you would separate your personal funds from those others; that is right?" She answered: "Yes; well, I wanted my personal funds separate from the others, and I also wanted it so it would be there and could be checked out at any time." It is clear that the deposit was general. To have made it special the arrangement For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes *Rehearing denied July 12, 1916. must have contemplated the safe-keeping with the title to the specific money intrusted and return of the very money left with the to him, it is because the commercial world bank. The manner in which the business recognizes the putting of funds in a bank as was conducted, the use of the passbook, the the natural, usual, and proper way of keepissuance and payment of checks, the balanc- ing and taking care of them, because of its ing of the account, all indicate the ordinary obligation, enforced by governmental superrelations between banker and depositor. vision, to have on hand at all times the cash State v. Dickerson, 71 Kan. 769, 81 Pac. to meet any call for a deposit, notwithstand497; 3 R. C. L. 518–519, 522. The purpose ing its relation to its depositors is technicalof the plaintiff that the money should "be ly that of a debtor to creditors. there," so that it could be checked out at any time, is one which actuates most depositors, and does not imply an understanding that the bank was to keep and return the identical bills and coins left with it. [2] 2. The claim of an officer for funds deposited by him in a bank which has thereafter become insolvent is entitled to no priority of payment merely because of their public character. 3 R. C. L. 644; note, 8 Ann. Cas. 116; 5 Cyc. 514. And with respect to a national bank probably no state law could create a preference on that ground. Davis v. Elmira Savings Bank, 161 U. S. 275, 16 Sup. Ct. 502, 40 L. Ed. 700. [3] 3. But where public funds are deposited in violation of law in a bank which has knowledge of the facts, the title does not pass, and a trust ex maleficio results which in case of insolvency may be enforced against the receiver or other custodian, so far at least as they have come into his hands, and in some jurisdictions to the extent by which the assets under his control have been there by increased. 3 R. C. L. 555; note, 5 L. R. A. (N. S.) 886; note, 16 L R. A. (N. S.) 918. [4] 4. Therefore the question to be determined is whether the clerk of the district court may lawfully place on general deposit to his credit as such officer the funds that come into his hands in that capacity. There is no statute which expressly allows or expressly forbids such course. His bond is conditioned for the payment to the proper person of all moneys received in his official capacity, and the faithful discharge of his duties. Gen. Stat. 1909, § 2245. His duties are described as those required by law or the rules and practice of the courts, including the safe-keeping of papers and awards. Gen. Stat. 1909, § 2246. A public officer or other custodian who holds money not his own merely for safe-keeping, until occasion shall arise for lawfully paying it out, has of course no right to use it in his own business or to permit its use by others. This is not merely because of the risk of loss, for all risk cannot be avoided, and such a disposition in a particular case might be the safest course that could be adopted to prevent loss. But to part with the title and right of possession amounts to a conversion, and is under the condemnation of the law whether a Joss results or not. The placing of funds on general deposit in the bank involves the consent to its using them in its business. If the transaction is taken out of the general In two Kansas cases the deposit of public funds by a treasurer (of a board of education and a city respectively) has been treated as wrongful, but in each he was the manager and cashier of the bank, and the illegality of the transaction was not denied; the question in dispute being the extent to which the trust fund could be traced. Myers v. Board of Education, 51 Kan. 87, 32 Pac. 658, 37 Am. St. Rep. 263; City of Larned v. Jordan, 55 Kan. 124, 39 Pac. 1030. It has also been held that the statute forbidding a county treasurer to permit any corporation or individual to use public money under his control prevents his lawfully depositing it in a bank, except by express statutory authority; this interpretation being affected by other legislation on the subject. State v. Lawrence, 80 Kan. 707, 103 Pac. 839. The case just cited notes the difference of judicial opinion as to whether a general deposit in a bank is within a prohibition against the "loan" of public funds. See, also, Bank v. Lanier, 78 U. S. (11 Wall.) 369, 20 L. Ed. 172; Warren v. Nix, 97 Ark. 374, 135 S. W. 896; Ricks v. Broyles, Receiver, 78 Ga. 610, 3 S. E. 772, 6 Am. St. Rep. 280; State v. Rubey, 77 Mo. 610, 619; State v. Bartley, 39 Neb. 353, 58 N. W. 172, 23 L. R. A. 67; State v. Hill, 47 Neb. 456, 66 N. W. 541. The Supreme Court of Iowa, in overruling an earlier decision which gave an affirmative answer to the question, said: forbids such an officer [a school treasurer] from "The contention of appellee is that the law making a general deposit of public money, even though in his name as such, for the reason that thereby the title to the fund passes to the bank,. and a technical conversion results, and that any to swerve from the line of duty is, of necessity, contract having a tendency to induce an officer inimical to the principles of sound public policy. Were this position correct, it would be a matter of profound regret, for nearly every county, city, and school district treasurer in the state has interpreted the law otherwise, and, according to this view, placed the funds of the public in jeopardy, and exposed himself to criminal prosecution. For, if depositing with a bank for safekeeping amounts to conversion, they would seem to be open to the charge of embezzlement, and might have difficulty in regaining the moneys from the depositories participating in the wrong by receiving the funds. Common prudence seems generally to have dictated the deposit of public moneys with solvent banking corporations for these in his personal custody would impose an safe-keeping. To require the officer to retain exceedingly onerous burden, so out of keeping with what is deemed essential for the safety of the funds that one so proposing would experience difficulty in procuring sureties on his offi* If that decision (Lowry v. Polk County, 51 Iowa, 50, 49 N. W. 1049 [33 cial bond. * * hundreds of public officials of this state who have placed the moneys coming into their hands as such in the solvent banks of the state for safe-keeping, in pursuance of a custom prevailing since the formation of this commonwealth, and in harmony with business usages of the commercial world, must be denounced as embezWe are not ready to so declare. Better that Lowry v. Polk Co., in so far as holding the general deposit of money a loan, be overruled. It has been disregarded, because of business necessity and prudence, ever since announced. It is unsound in principle and contrary to authority." Hunt v. Hopley, 120 Iowa, 695, 697, 702, 95 N. W. 205, 207. zlers. The Supreme Court of Wisconsin used moneys received and held by him by virtue It is held in this state that the bondsmen of a township treasurer are not exonerated by the fact that the money in his hands has been lost through the insolvency of a bank in which he had deposited it. Rose v. Doug lass Township, 52 Kan. 451, 34 Pac. 1046, 39 Am. St. Rep. 354. However, the fact that the law countenances deposit in a bank as one of the methods that an officer may select for the care of money held in his official capacity does not imply that by pursuing that course he can relieve himself from liability for its loss. Note, 36 L. R. A. (N. S.) 287. In Wyoming it has been held that the title to moneys deposited by an officer in that capacity remains in the public. State v. Foster, 5 Wyo. 199, 38 Pac. 926, 29 L. R. A. 226, 63 Am. St. Rep. 47. In view of the manner in which business in this country is ordinarily conducted, the natural course to be pursued by the custodian of a fund to which additions are continually being made, and from which payments may be demanded at any time, is to place it on general deposit in a bank and check upon it as occasion arises. A special deposit is not necessarily any safer than a general one, and is usually regarded as more hazardous. To keep the money in his personal possession would often involve an unreasonable risk, and to place it in a safety deposit box, where that is available, involves too cumbersome a method of disbursement to be at all in keeping with modern customs. We do not think the Legislature must be regarded as intending that all funds in the hands of custodians charged with their safe-keeping must be withdrawn from circulation, unless the statute expressly authorizes their deposit in a bank. We conclude that the clerk of the court acted lawfully in placing in the bank the money in her official charge, and therefore that the title passed and no trust resulted. This conclusion makes it unnecessary to consider any question as to the tracing of the funds into the hands of the receiver. The judgment is reversed, and the cause remanded, with directions to render judgment for the defendant. concurring. All the Justices (98 Kan. 411) STATE v. KENNEY et al. (No. 20585.) (Supreme Court of Kansas. June 10, 1916.) (Syllabus by the Court.) 1. BURGLARY 41(1)-BURGLARY AND LABCENY-SUFFICIENCY OF EVIDENCE. The evidence examined, and held to be sufficient to support a conviction on a charge of burglary and larceny. Cent. Dig. § 94; Dec. Dig. 41(1).] 2. CRIMINAL LAW 351(9)-EVIDENCE-AT- Evidence of an attempt of the defendant in a criminal case to break jail pending trial is admissible as tending to show guilt. [Ed. Note. For other cases, see Criminal Law, Cent. Dig. § 783; Dec. Dig. Appeal from District Court, 351(9).] Cherokee of burglary and larceny, and appeal. Robert Kenney and another were convicted firmed. Af C. A. McNeill, of Columbus, and Maurice McNeill, of Kansas City, Mo., for appellants. S. M. Brewster, Atty. Gen., and F. W. Boss, of Columbus, for the State. MASON, J. Robert Kenney and Bud Harding were convicted on a charge of burglary and larceny, and appeal. [1] 1. The principal ground on which a reversal is asked is that the evidence did not justify a conviction. The stolen property consisted largely of .38-caliber cartridges, taken from a hardware store. A witness testified that earlier in the night during which the offense was committed he had been drinking with the defendants; that Kenney proposed that they break into a hardware store that he named-not the one broken into that Harding left and returned shortly with a .22-caliber rifle; that Kenney said to him, "That's a hell of a thing to stick up a place with," and he answered that For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes Dig. § 148; Dec. Dig. 96.] 5. TRUSTS 373-Parol TRUSTS IN REALTY The petition and evidence held to be suffi cient to take to the jury the question whether there had been such part performance of an oral contract creating a trust in real estate as to justify its enforcement, notwithstanding the statute of frauds in relation to such trusts. [Ed. Note.-For other cases, see Trusts, Cent. Dig. 88 604-606; Dec. Dig. 373.] he had a .38 at home and might get it; that | ation of law. Nor will the mere fact that the he again left, and shortly came back with parties are father and son show such confidential relations as to change the rule. a .38-caliber revolver; that the witness proposed that they all go home, but the defendants said, "No; they would not get in any trouble; they were too smart"-whereupon he left them. Harding's mother heard Kenney say to him that their companion (the witness already referred to) was going to back out. Another witness, shortly after the burglary, saw the defendants on the sidewalk a few blocks from where it was committed. They dropped something, and both stooped over as if looking for it. The witness, with others, made an examination of the place where they had been standing, and found an empty cartridge box, which was identified as a part of the stolen property. This evidence was sufficient to take the case to the jury. [2] 2. Complaint is made of the admission of the testimony of the sheriff as to the conduct of Harding after the arrest-that he tried to break jail. This was competent against Harding. 1 Wigmore on Evidence, § 276. If the point was made at the trial that it was prejudicial as to Kenney, an instruction was doubtless given, to guard against such a result. Appeal from District Court, Graham County. Action by Charles Goff against Thomas Franklin Goff and others. Verdict for plaintiff. From an order granting a new trial, plaintiff appeals. Affirmed. W. W. McCanles, of Kansas City, and Z. C. Millikin, of Salina, for appellant. W. L. Sayers, of Hill City, David Ritchie, of Salina, and G. A. Spencer, of Salina, for appellees. MASON, J. In April, 1885, Charles Goff, to whom certificates of purchase for 80 acres of school land had been issued, onetenth of the purchase price being paid, as The judgment is affirmed. All the Justices signed them to his father, Thomas F. Goff, concurring. (98 Kan. 201) GOFF v. GOFF et al. (No. 19658.) (Supreme Court of Kansas. June 10, 1916.) (Syllabus by the Court.) who took possession, completed the payments, and in 1905 received the patent, thereafter making valuable improvements. In June, 1913, the son brought an action against the father (joining other defendants to whom conveyances had been made subject to a life estate) for the possession of the land, al 1. NEW TRIAL 163(2)—Order-ConstrUC-leging: TION. A statement in the record of an order granting a new trial, that the ruling was made on the sole ground that a special finding was not sustained by sufficient competent evidence, does not necessarily imply that the court would have approved such finding if it had been satisfied of the competency of all the evidence on the subject that had been admitted at the trial. [Ed. Note.-For other cases, see New Trial, Cent. Dig. § 331; Dec. Dig. 163(2).] 2. NEW TRIAL 163(2)—Order-ConstRUC TION. [Ed. Note.-For other cases, see New Trial, Cent. Dig. § 149; Dec. Dig. 73.] 4. TRUSTS 96 CONSTRUCTIVE TRUSTSFRAUD-REFUSAL TO RECONVEY LAND. The refusal to carry out a verbal promise to reconvey land, the title to which is transferred by a writing absolute on its face, cannot in itself constitute such a fraud as to make the grantee a trustee for the grantor by oper "That he received no consideration for the assignment of said certificate of sale save the promise of said defendant to hold same in trust for him and have patent assigned to plaintiff after 20 years having paid out on said land." He also alleged in substance that in April, 1912, his father had put him in possession of the land in pursuance of such agreement, and that he had made valuable improvements. A trial resulted in a verdict for the plaintiff, but a new trial was granted. The plaintiff appeals from the order granting the new trial, and the defendant complains of various rulings which he asks to have reviewed. [1] 1. A number of special findings were returned, all of which were approved, excepting one to the effect that the defendant had put the plaintiff in possession of the land under the agreement referred to, which was set aside. The journal entry, after stating that fact, continues: "For the sole reason that said finding is not sustained by sufficient competent evidence the court should grant a new trial in * * The plaintiff testified that while living in Nebraska he had received two letters from his father; that he did not have them, and did not know where they were, but that they stated in substance that if he would return home his father would turn over the land For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes which he had been holding in trust, and The agreement referred to was not in writwould build thereon a house for the plaintiff | ing, and was rendered unenforceable by the and his family. In behalf of the plaintiff statute forbidding the creation by parol of substantially this argument is presented: express trusts concerning lands. Gen. Stat. The motion for a new trial was sustained 1909, § 9694; Grantham v. Conner, 97 Kan. solely because the court concluded that it 150, 154 Pac. 246, and cases there cited. A had erred in admitting evidence of the con- trust did not arise by implication of law tents of these letters, without better proof of from the facts found. The plaintiff, as the their loss; no error was in fact committed in holder of the school land certificates, was this respect because the only objection made practically the owner of the land, subject to to the evidence was too general to raise any the claim of the state for the unpaid purquestion regarding the nonproduction of the chase price. He assigned the certificates to letters; therefore the new trial was granted his father for a recited money consideration. upon a mistaken view of a pure matter of This amounted to a conveyance of the title, law, which can be corrected on appeal. A and in the absence of fraud or mistake is reflaw in this reasoning lies in the assumption garded as conclusive evidence of the transfer that the court, if convinced that the evidence of the beneficial interest, precluding a showregarding the letters had been properly ad- ing of want of consideration for the purpose mitted, would have approved the finding bas- of establishing an implied trust. 15 A. & E. ed in part thereon. We do not think the Encycl. of L. 1125; 39 Cyc. 116. The finding language of the entry, that the finding re- does not disclose any circumstances outside garding the transfer of possession was not of the mere agreement, indicating that the sustained by sufficient competent evidence, grantee was not intended to take beneficially, is to be interpreted as an assertion that it nor that the grantee's promise to reconvey was sustained by sufficient evidence if that was made with a fraudulent purpose, nor concerning the letters was to be considered. that any fraud was practiced, except as the The finding could not be made a basis of the failure to perform the promise might be judgment without its having been affirma- regarded as amounting to fraud. The refusal tively approved by the trial court, and its to carry out a verbal promise to reconvey approval, subject only to the competency of land, the title to which is transferred by a certain evidence, cannot be implied merely deed absolute on its face, cannot in itself from the statement that it was not sustained constitute such a fraud as to make the by sufficient competent evidence. grantee a trustee for the grantor by operation of law. The fraud which will produce that result must be something more than the refusal to perform the oral contract, such as the use of deception or other unfair means 28 A. & E. in procuring the conveyance. Encycl. of L. 883; 39 Cyc. 171, 178, 179; note, 39 L. R. A. (N. S.) 906, 911. [2] 2. The trial court filed a written opinion giving the grounds of his decision. The plaintiff suggests that this forms no part of the record, and cannot overcome the recitals of the journal entry. It may, however, aid in the interpretation of the language there used. It indicates other grounds for the The matter is sometimes affected by the granting of the new trial, but these may be confidential relation of the parties to the disregarded. It gives some color to the plain-contract (note, supra, 39 L. R. A. [N. S.] pp. tiff's contention by enumerating error in the 924, 926), but the mere fact that they are reception of the evidence of the contents of father and son does not establish the necesthe letters as one basis for such action. But sary dependence of one upon the other, such upon the whole it tends to strengthen, rather for instance as arose between an absentee than weaken, the view that the court was father and his children in Lehrling v. Lehrunwilling to approve the finding concerning ling, 84 Kan. 766, 115 Pac. 556, or between an the change of possession. attorney and his client in Bartholomew v. Guthrie, 71 Kan. 705, 81 Pac. 491. We conclude that the finding of the jury that the father obtained the assignment of the certificates of purchase from his son upon an agreement that he would pay out on the land and hold the title in trust for 20 years and then, having completed payment and obtained a patent, making a reconveyance, does not show the existence of a trust arising by implication of law. Therefore no error was committed in granting a new trial. [3] 3. Inasmuch as the verdict may have been based in part upon the finding which was set aside, it falls with it, and the order granting a new trial must stand, unless it can be said that the remaining findings in themselves require a judgment for the plaintiff. [4] 4. The finding relied upon as having that effect consists of an affirmative answer to this question : "Did the defendant Thomas Franklin Goff obtain an assignment of the certificate of purchase issued by the state, through the county of Graham for said lands from the plaintiff. Charles Goff, upon an agreement that the said defendant would pay out on the land and hold the title to same in trust for said Charles Goff for 20 years, and at the end of that time take the title thereto and hold it in trust for said plaintiff, Charles Goff, and deed it to him?" [5] 5. The defendant complains of the overruling of a demurrer to the petition and to the plaintiff's evidence. The petition, besides setting out the oral agreement to reconvey the land, alleged that the plaintiff was induced at considerable expense to return from Nebraska by his father's promise |