Anderson v. Love

• Court: Mississippi Supreme Court
• Writing for the Court: Smith, C. J.
• Citation: Anderson v. Love, 169 Miss. 219, 151 So. 366, 153 So. 369 (Miss. 1934)
• Decision Date: 26 February 1934
• Docket Number: 30829
• Parties: ANDERSON et al. v. LOVE, SUPERINTENDENT OF BANKS

151 So. 366

153 So. 369, 169 Miss. 219

ANDERSON et al. v. LOVE, SUPERINTENDENT OF BANKS

No. 30829

Supreme Court of Mississippi

February 26, 1934

Division A

December 5, 1933

APPEAL from chancery court of Alcorn county HON. JAMES A. FINLEY Chancellor.

Suit by J. S. Love, Superintendent of Banks, against F. F. Anderson and others, wherein defendants filed a cross-bill. From the decree, defendants appeal. Affirmed.

On suggestion of error.

Former judgment set aside in part, decree appealed from reversed and decree rendered in accordance with opinion.

For former opinion, see 151 So. 366.

The resolution directed to be reported follows:

"A regular meeting of the board of directors of the Corinth Bank & Trust Company was held at the office of the Bank on the 12th day of June, 1928, the following members of the board being present: Mr. E. S. Candler, Chairman, A. M. Dickson, T A. Read, J. R. Hamm, and F. F. Anderson. The president, F. F. Anderson, presided and the Secretary was present and acting:

"The chairman announced that the principal business coming before the meeting was the matter of taking care of certain losses the bank has suffered, and explained that certain stockholders, would make contributions to save the bank, provided they should be reimbursed to the extent that collections might be made on the paper in which the losses have occurred, and should also be repaid out of the net earning of the bank in excess of ten per cent each year.

"The Chairman further explained that form of agreement covering the proposed plan to protect the bank had been prepared and he submitted the form to the meeting, whereupon Mr. A. M. Dickson offered the following resolution:

"'Be it resolved by the board of directors of the Corinth Bank & Trust Company that the president and secretary of this bank be, and they are hereby, authorized to execute for the bank and its name an agreement with certain stockholders in the form substantially, as follows:

"'Whereas, there are certain loans now being carried by the Corinth Bank & Trust Company, hereinafter called the bank, which have been criticized by the state banking department, and which it is proposed to retire with money advanced by certain of the stockholders of the bank for that purpose.

"'Whereas, the paper so to be retired should be held and collected for the use and benefit of the stockholder, pro rata, so contributing to the retirement of such questionable paper, and trustees are necessary for such holding and collecting and for the equitable distribution of whatever may be collected thereon; and

"'Whereas, the bank desires to bind itself, in consideration of the advancement of this said money by certain of its stockholders, to apply all of the net earnings of the bank, over and above not more than what would be necessary for a six per cent annual dividend, and not more than a four per cent annual addition to the fixed surplus, to the repayment of so much of the above mentioned advancements and four per cent interest per annum thereon, as may not be liquidated by and from collections, if any, that may be made upon the said paper so to be retired, until said advancements shall have been fully repaid, and trustees are necessary and convenient as an agency to receive the said funds from the bank and to make proper distribution thereof, pro rata, to the said contributing stockholders; and,

"'Whereas, F. F. Anderson, J. W. Gaulding and R. M Weaver are suitable and proper persons to be appointed as trustees for the above mentioned purposes and ought to be so designated:

"'Now, therefore, in consideration of the premises, the said Corinth Bank & Trust Company hereby designates and appoints the said F. F. Anderson, J. W. Gaulding and R. M. Weaver, Trustees, with full power, and it is hereby made their duty;--

"'(a) To receive and hold such paper as may be transferred to them by it, of the character herein above mentioned, and for the purposes herein expressed; to collect said transferred paper and apply the proceeds thereof to the payment, pro rata, of the several amounts advanced by the stockholders of the bank for the purpose of retiring such paper, together with four per cent interest per annum on such advancements; and

"'(b) To have and receive from the bank, at the end of each year, all its net earnings over and above the said six per cent dividend and four per cent addition to the surplus, and to pay the same, pro rata, to the stockholders who contribute to the said fund for retiring said questionable paper, until said contributions shall have been paid in full, together with interest thereon at the rate of four per cent per annum.

"'The said Corinth Bank & Trust Company hereby expressly agrees to transfer to said persons and their successors in trust, but without recourse on it, such of its paper as may be taken up by the contributions of its stockholders and in an amount, face value, equal to the aggregate of such contributions, to be held and dealt with by said trustees as herein stipulated and provided; and also that, at the end of each year, so long as same may be necessary, it will pay to the said trustees, for the uses aforesaid, all its net earnings except so much of such net earnings as may be necessary to pay an annual dividend of not more than six per cent, and except enough, also, to increase the surplus not over four per cent of the capital stock of each year. But it is clearly understood that the bank does not obligate itself to pay to said trustees anything whatever except out of its net earnings as same may be hereafter ascertained, after providing for all expenses and losses, and for dividends and additions to surplus, as herein set out.

"'And further it is agreed that if, at any time collections on the transferred paper and payments made from net earnings shall have reached a total equal to the advancements made by stockholders plus four per cent interest per annum thereon, such of the said paper as may not have been collected shall be returned to the bank and become its property.

"'The bank also further obligates itself to appoint a trustee, or trustees, to take the place of him, or them dying, resigning, or becoming unable or unwilling to act, and so often as same may be necessary, and all rights, powers and duties herein conferred upon the trustees named herein shall belong to their successors as well.

"'It is further agreed that the bank, in so far as it legally may, will treat the contributions made by the stockholders, as contemplated herein, as advancement on stock liability in the event the bank should fail or discontinue operation within twenty-four months from this date and on account of losses accrued or accruing in paper now in the bank's portfolio. This entire agreement is subject to the approval and concurrence of the superintendent of banks of the state of Mississippi which approval and concurrence will be evidenced by letter to be filed with the board of directors of this bank.

"'It is contemplated that each person making contributions hereunder will become a party to this agreement by subscribing hereto and that the persons named as trustees will indicate hereon their acceptance of the trust.

"'Witness our signatures, this the 12th day of June, 1928.

"'Corinth Bank & Trust Company

"'By F. F. Anderson, President

"'We accept the trust provided for by the above instrument.

"'F. F. Anderson

"'J. W. Gaulding

"'R. M. Weaver

"'Trustees.'

"The said Mr. T. A. Read moved the adoption of the said resolution, said motion was seconded by Mr. J. R. Hamm and upon being put to a vote was unanimously carried and the result was so announced by the chairman."

Affirmed. Decree reversed and decree rendered.

W. C. Sweat, of Corinth, for appellants, contributing stockholder's.

This court seems never to have passed upon the question as to whether or not it is necessary for the superintendent of banks, in his official capacity, to determine that a bank is insolvent and make an assessment against its stockholders. Other jurisdictions having similar statutes to ours have passed upon the question, holding that it is a necessary prerequisite to the institution of suit by the superintendent of banks or the comptroller, as the case may be.

Tunnicliffe v. Noyes, 135 So. 505; Kennedy v. Gipson, 8 Wall. 498, 18 L.Ed. 476; Aldrich v. Skinner, 98 F. 375; Page v. Jones, 7 F.2d 541.

When our banking act was passed, the majority of the cases from the United States courts, construing the section of the National Banking Act had already been decided; and, when our legislature passed this statute, which is in all substantial respects, the same as the United States statute, it was adopted with full knowledge of the construction placed upon it by the United States Supreme Court and, in construing it, the court will put the same construction upon it which has been placed upon it by the federal courts before its adoption.

Yates v. Jones Nat. Bank, 51 L.Ed. 1002; Thomas v. Taylor, 56 L.Ed. 673; Corsicana Nat. Bank v. Johnson, 64 L.Ed. 141; Marquise v. Caldwell, 48 Miss. 23; Ingraham et al. v. Regan, 23 Miss. 226; 25 R. C. L. 1069, sec. 294; 59 C. J. 1065, sec. 627.

Stockholders of the bank, who had deposits in the bank at the time it closed, were entitled to have these deposits used as an offset, to be credited upon their stock liability.

Contemporaneous construction of statute by governmental department charged with its execution, while not controlling, is entitled to great weight.

Conard Ft. Co. v. Miss. State Tax Commission, 160 Miss. 185, 133 So. 652; I. C. Railroad Co. v. Middleton, 109 Miss. 199, 68 So. 146; Robertson v. Texas Oil Co., 141 Miss. 356, 106 So. 449.

While it is true that this construction, which had been placed...