Lamb v. Cecil.

Decision Date06 December 1884
PartiesLamb v. Cecil.
CourtWest Virginia Supreme Court

1.While it is error to give interest upon the aggregate of principal and interest from a time anterior to the decree, yet If the difference in amount is less than $100.00, and that is the only error appearing by the record, the decree will be reversed with costs to the appellee, and a decree will be entered for the proper amount, (p. 292.)

2.Where the management of the affairs of a banking corporation is entrusted by its charter to a board of directors, unless specially authorized by the charter, the cashier of such banking corporaltion has no power to assign the discounted bills and notes to a depositor in payment of his deposits without authority from the board of directors, (p. 294.)

3. A plaintiff in a suit in chancery can only obtain relief upon the case made in his bill, and not on a substantially different case made by the proof. But, where the ease made by the proof shows a right to relief and is not so different from the ease made in the bill, that under the rules of chancery pleading if could not be amended, the plaintiff will be allowed to amend his bill, to conform to the true state of the case. (p. 295.)

4. An insolvent corporation has the right to assign all its property for the benefit of its^creditors generally, (p. 296.)

5. Where a deed of assignment is made for the benefit of creditors by a corporation, a copy of said deed from the records of deeds of the county may be exhibited with the bill by the trustee with the same effect, as if he had filed the original, (p. 29(1.)

6. Where a deed of assignment from a corporation has affixed to it the common seal of the corporation, and the signature of the proper officer is proved, courts are to presume, that the officer did not exceed his authority, and the seal itself is prima facie evidence, that it was affixed by proper authority. The contrary must be shown by the objecting party, (p. 206.)

7. Whatever claims the bank could collect by suit or action before an assignment may be so collected afterwards by the trustee in the deed of assignment, (p. 297.)

8. When a director of an insolvent banking corporation by fraud and collusion with the cashier of such institution receives from the cashier for his deposits, without the authority of the hoard of directors, discounted hills and notes, the property of said corporation, and suit is not brought therefor until nearly five years after such transaction, the doctrine of laches does not apply, (p. 297.)

9. If before suit brought by the trustee in the deed of assignment from an Insolvent banking corporation to recover the amount of discounted hills and notes fraudulently received from the cashier without authority by a director of such insolvent hanking institution the said trustee had paid such director dividends on the indebtedness of such institution to him, this fact does not work an estoppel to maintain such suit. (p. 297.)

Statement of the case by Johnson, President: Daniel Lamb on February 13, 1876, instituted his silit and at March rules, 1876, fifed his bill in equity in the circuit court ot Ohio county against A.J. Cecil, in which he alleged, that on February 25, 1871, the Wheeling Savings Institution by order of its board of directors, made a general assignment of its property to him as its trustee for the benefit of its creditors; and with his bill he exhibits the copy of said deed of assignment from the records of said county, where it was promptly recorded. He alleges in said bill the incorporation of the company and the duties required by the charter of the directors of said company; that defendant, Cecil, was one of the directors, who with three other directors appointed one A. C Quarricr the treasurer of said institution; and that by the negligence ot said directors the said treasurer was permitted to, and he did, embezzle large sums of the money &c, ot said corporation, which rendered said savings institution utterly insolvent.

He alleges that said directors were trustees for said incorporation and its funds and property, and that it was their duty to preserve and protect the same; that said Cecil one of the directors of said institution had deposited in said institution the sum ot $7,282.74 in his own name and as trustee for some other person, which money was deposited there to draw interest and did draw interest at the rate of six per cent, per annum, and had been for a long time so deposited; that said Cecil before and on February 25, 1871, as such director, well knowing the insolvent condition of said institution combined with A. J. Fannel and Alexander Laughlin, two of the other directors, and the said treasurer, A. C. Quarrier, to draw out of the said institution the whole ot the said sum of $7,282.74 so standing in his name, and thus by means of his previous knowledge of the condition of the affairs of the said institution, obtained by being such director, he preferred himself to the full amount of his claims, whereas in point of fact the said instution after the withdrawal of his said funds will not be able to pay over fifteen per cent, of its debts to the other depositors.

He charges that the withdrawal of the said deposits under the circumstances was a gross fraud on the other depositors and creditors of the said institution; that there had been deposited in said institution over $300,000, which ought to have been forthcoming on the said 25th day of February, 1871; that the said Cecil as such director possessed the information ot the insolvency of the said institution and concealed from the depositors such information, and in contemplation of the insolvency of the same withdrew his disposits and converted the same to his own use, when he ought to have let the same lie in the institution and be subject to the disposal of the said trustee, to be distributed to and amongst all of the creditors of the institution as by the said deed of assignment he is directed to do, and it is a fraud on the other depositors in the said institution to thus secretly withdraw the funds aforesaid and convert them to his own use, or for the use of any other person. He prays for a personal decree against the defendant for the amount with its interest so drawn out of said institution.

The defendant demurred to the bill, which demurrer was overruled. He then answered the bill denying all negligence, and averring that he had discharged his duty as director of said institution. He insisted that by the express terms of the charter of said institution no director was or is liable in his person or property for any debts, contracts or engagements of said corporation, but that the money, property, rights and credits of said corporation and nothing more were and are liable for the same. He admits that the treasurer, A. C. Quarrier, abstracted and embezzled the most of the funds of said corporation, but insists that he did so by figures and false entries, which would not have been detected by the most careful examination, and that he did so without any aid, siriterance, default or negligence of said directors or of respondent, he sets up as fact, that all the moneys to his credit in said institution were trust-funds, and denies that he had any notice of the insolvency of the institution. Heavers that he had determined some time before to draw out $2,500.00 in order to otherwise invest for his cestuis que trust; and that at the time he drew the check he believed the institution to be only temporarily embarrassed. 'He denies that a deed of assignment in the terms stated in the bill was made on February 25, 1871, or that any assignment was ever made by the said institution to complainant. He denies that the claim sued for did or could pass by the deed of assignment alleged in the bill, it said institution had such claim. He insists that, even if he had had the knowledge charged in the bill, it was not his duty to permit trust-funds, of which he was the custodian, to lie in the institution to be distributed among the creditors; and that he would have been derelict in his duty toward his said cestuis que trust if he had done so. he denies that he has been requested to return the funds to complainant and avers that on the contrary respondent individually and as trustee presented to said complainant, trustee, respondent's claims by reason of moneys still due to him from said institution, when with a knowledge of all the facts attending the withdrawal of said funds the complainant made no claim but acknowledged defendant's claims, certified them to be correct, and paid dividends pro rata with other admitted claims against said institution. He alleges that he has paid to his cestuis que trust all the funds drawn out of said bank as aforesaid, he avers that, if complainant ever had a cause of action, he has lost it by his laches; and he further relies on the bar of the statute ot limitations.

The plaintiff tendered an amended bill, setting up negligence and fraud more particularly against the directors generally and against Cecil particularly, to the filing of which the defendant objected, and the court refused to permit the same to be filled. This bill charged that by reason of the fraud and negligence of the directors of said institution the hank lost $300,000.00, and prayed that damages to that amount might be decreed against them. It also charged that under the circumstances stated in the bill the said Cecil had no right to withdraw his deposits, and prayed that he might be required to pay to the plaintiff the amount of said deposits so withdrawn. No directors except Cecil were made defendants.

Depositions were taken and on the hearing, on May 31, 1883, the court decreed for the full amount ot the deposit so withdrawn and interest to April 23, 1883, and interest on this sum until" paid, less credits that he was entitled to thereon.

From this decree Cecil appealed. W. P. Hubbard tor appellant....

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  • Grottendick v. Webber, (No. 10088)
    • United States
    • Supreme Court of West Virginia
    • March 15, 1949
    ...77 S. E. 138; Floyd v. Duffy, 68 W. Va. 339, 69 S. E. 993; 33 L. R. A. (N.S.) 883; Ryan v. Nuce., 67 W. Va. 485, 68 S. E. 110; Lamb v. Cecil, 25 W. Va. 288. The plaintiff did not waive his statutory right to require a trial by jury upon an issue devisavit vel non. The statute does not speci......
  • Grottendick v. Webber, 10088
    • United States
    • Supreme Court of West Virginia
    • March 15, 1949
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