1.
BANKS AND BANKING.
Superintendent
of banks need not formally declare bank in liquidation before
suing stockholders for statutory liability, but need only
make it reasonably appear that assets of bank will be
insufficient to pay depositors (Code 1930, section 3815).
2.
BANKS AND BANKING.
Stockholders
of insolvent bank cannot set off their deposits with bank
against their statutory liability, since such liability is
not debt due bank by stockholders, but is security for
benefit of depositors who are entitled thereto free of
equities between bank and stockholders (Code 1930, section
3815).
3
STATUTES.
Erroneous
construction placed on unambiguous statute relative to
liability of bank stockholders by banking department which
permitted stockholders to set off their deposits in insolvent
bank against their liability held not binding on Supreme
Court (Code 1930, section 3815).
4.
APPEAL AND ERROR.
Set-off
allowed appellants against claim of appellee who filed no
cross-appeal thereto cannot be disturbed.
5.
BANKS AND BANKING.
Stockholders
who paid their double liability under trust agreement whereby
bank delivered notes and securities to trustees who allocated
part thereof to stockholders for whom trustees collected
money on remainder and deposited money in same bank which
subsequently was taken over by superintendent of banks, who
brought suit against stockholders for statutory liability
held not entitled, in such suit, to set off money so
deposited in bank by trustees (Code 1930, section 3815).
6.
BANKS AND BANKING.
Superintendent
of banks could join all bank stockholders in suit in equity
to recover statutory liability from stockholders who were all
proper parties thereto (Code 1930, sections 363, 3815).
7.
BANKS AND BANKING.
Chancery
court had jurisdiction over nonresident stockholder who was
made party defendant to suit by superintendent of banks
against all stockholders of bank to recover statutory
liability from stockholders, absent contention that none of
stockholders resided in county where suit was brought (Code
1930, sections 363, 3815).
ON
SUGGESTION OF ERROR. (Division A. Feb. 26, 1934.) [153 So
369. No. 30829.]
1.
TRUSTS. Where power to revoke or modify trust is not
expressly reserved, and creation of trust is not affected by
fraud, duress, or mistake, settlor is without power to revoke
or modify trust, even though created without consideration.
2. BANKS AND BANKING. Where stockholders in state bank, under
resolution of directors, advanced money to retire doubtful
assets, and bank assigned such doubtful assets to trustees
for benefit of stockholders, entire proceeds of such assets
which were collected and deposited in bank, notwithstanding
only part of assets was allocated to trust, held proper
set-off against stockholders' liability.
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
criticised 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 appointod 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...
