Bank of Hickory v. McPherson

• Court: Mississippi Supreme Court
• Writing for the Court: COOK, J.
• Citation: Bank of Hickory v. McPherson, 102 Miss. 852, 59 So. 934 (Miss. 1912)
• Decision Date: 02 December 1912
• Docket Number: 15,686
• Parties: BANK OF HICKORY v. O. S. MCPHERSON ET AL

59 So. 934

102 Miss. 852

BANK OF HICKORY v. O. S. MCPHERSON ET AL

No. 15,686

Supreme Court of Mississippi

December 2, 1912

APPEAL from the chancery court of Newton county, HON. SAM WHITMAN JR., Chancellor.

Suit by Mrs. O. S. McPherson and others against the Bank of Hickory. From a decree for complainants, defendant appeals.

The facts are fully stated in the opinion of the court.

Affirmed

G. C Tann, for appellant.

There are several grounds of demurrer, the first one is "There is no equity on the face of the bill," and the seventh ground of demurrer is: "That the money was paid by O. S. McPherson to Harper before the sale was confirmed by the court."

It has always been the doctrine in this state that in judicial sales the title to the land does not pass to the purchaser, and the right to the money does not enure to the owners of the land until the sale is confirmed by the court, and this money was paid to Harper during his lifetime, and the sale was not confirmed, if it ever was, until after his death.

The question has been before this court in every conceivable shape, and in every instance, this court has held that this was the law, and our contention is, that if the right to the money does not enure to the owners of the land, until the sale is confirmed, that at the time that this money was paid into the Bank of Hickory and credited to the individual account of Harper, it was not appellees' money, and the land did not at that time belong to McPherson, the purchaser. That he is the man that should have brought this suit and not the appellees. State v. Cox, 62 Miss. 786; Ferring v. Shafner, 62 Miss. 791; Pool v Ellis, 64 Miss. 563, 1 So. 725; Camp v. Saucier et al., 8 So. 846; Tooley v. Gridley, 16 Smedes & M. 493; Sanders v. Dowell, 7 Smedes & M. 206; Gowan v. Jones, 10 Smedes & M. 164; Henderson v. Herrod, 27 Miss. 685; Mitchell v. Harris, 43 Miss. 314; Redus v. Hayden, 43 Miss. 614; State v. Cox, 62 Miss. 786; 2 Daniel, Ch. Pr. 1274, et seq.; Am. & Eng. Ency. Law, 219; Cruikshank v. Luttrell, 67 Ala. 318; Alsobrook v. Eggleston et al., 13 So. 850; 12 Am. & Eng. Ency. of Law, 219.

No valid deed can be made until after the sale is confirmed. 12 Am. & Eng. Ency. Law, 220-221.

"The accepted bidder is merely a proposer, and to divert the former owner's title and render valid the deed to the purchaser the sale must be confirmed." 24 Cyc. 33A.

"The risk of loss pending confirmation is upon the vendor. If the property is accidentally destroyed after the sale and before confirmation, the purchaser will not be compelled to complete." 24 Cyc. 24, 34.

Every authority that I can find, holds that the title to the property sold does not pass to the purchaser and the right to the money does not inure to the owners of the land until after the sale is confirmed, and if there is anything in the doctrine "stare decisis," this is now the law, and this being the law, and this money having been paid by McPherson to Harper before confirmation of sale, it was at his own risk. Harper was a mere depositary of McPherson, and if Harper squandered the money, it was McPherson's loss, and not the owners of the land--not the appellees. The appellees were the owners of the land on the 9th day of March, 1905, when Harper paid the money into the Bank of Hickory, and McPherson was the owner of the money. This being the case the appellees have no rights against the Bank of Hickory, even if it is liable for the money to McPherson.

Jesse D. Jones, for appellees.

We submit that the check made payable to G. B. Harper, commissioner, who was well known to be the sheriff of the county, with the word commissioner following the sheriff's name, was sufficient to put the appellant on inquiry to ascertain to whom it rightfully belonged before permitting same to be paid out, and that the appellant had no right, but did so at its peril, to permit the checks made payable to G. B. Harper, commissioner, to be placed to the credit of G. B. Harper's personal account unless the indorsement of the check showed conclusively that the rights of the funds had passed from his fiduciary capacity to his individual ownership, which was not done in the case at bar. See 3 Am. & Eng. Ency. of Law (2 Ed.), 831-2.

We submit that the rule announced in the case of the State of Louisiana v. Jahraus, holding that the letters "T. C." following the signature of the sheriff of the county to a check was sufficient to put the party dealing with the sheriff on guard as to the ownership of the fund, 41 So. 575 is the true rule of law and should be strictly applied to this case. Also, see American National Bank v. Fidelity Deposit Co. as to peril of bank in permitting the withdrawal of trust funds. 12 Am. & Eng. Cases, pp. 666 and note.

We submit to the court for its closest inspection the case of Duckett v. Mechanics' National Bank, 39 L. R. A. 84. This case is analogous and almost on all fours with the case at bar. The reasoning in the case is sound and ought to be adhered to in the decision of this case in every respect, and in all other cases when the rights of minors and infants are being invaded upon. I especially call the court's attention to that feature of the opinion dealing with trust funds, and notice to the bank. I beg the pardon of the court for not being able to quote this case in full, but the report has been misplaced and I am unable to find it.

We submit that when the appellant bank permitted the check or funds passing by the issuance of said check to be passed from the claim of G. B. Harper, commissioner, to the claim of G. B. Harper by letting the indorsement of G. B. Harper, commissioner, be made thereon and said bank placed the same to the individual credit of G. B. Harper and after the death of the said G. B. Harper, paid the same to the insolvent estate of G. B. Harper without making inquiry as to the rightful owner of said funds, that the said bank by its own acts and conduct brings itself clearly within the rule laid down in the cases of Eyrich v. Bank, 67 Miss. 60; Armour v. Bank, 69 Miss. 700, 11 So. 28.

We submit that under the rule announced by the United States Supreme Court in case of Duncan et al. v. Jourdon, 23 Law Ed. 142, the appellant had no right to place the funds of G. B. Harper, commissioner, to the credit of G. B. Harper, commissioner, and failure to do so rendered the appellant liable. See Isom v. First National Bank of Jackson, 52 Miss. 902, wherein the bank was held imputable with knowledge and held liable for incorrect handling of trust funds.

As to notice from words used in check or bill of exchange, see Davis et al. v. Henderson, 25 Miss. 549.

We submit that the decision of the chancellor in overruling appellant's demurrer was eminently proper, and in view of the allegations of the bill of complaint no other just decision could have been rendered, and in view of the argument of counsel of appellant and the admissions therein, that the proper verdict to be rendered in this cause would be to give judgment for appellees in the supreme court, and in no event to reverse the decision of the chancellor.

Flowers, Alexander & Whitfield, for appellees.

We say that under the well-recognized rule of banking, which this court will recognize, the only way whereby, on the check here under consideration, the bank could ever safely deposit the proceeds to the credit of Harper individually would have been to deposit the proceeds to the credit of G. B. Harper, commissioner, and subsequently when G. B. Harper, commissioner, should present check signed by him as commissioner payable to the order of G. B. Harper personally then the bank would be safe in honoring the check in the absence of notice of claim by third persons. But where, as here, the check of the purchaser for the six hundred and eighty dollars was payable to the order of G. B. Harper, commissioner, and the only indorsement on the check's back, "G. B. Harper, Commissioner," then the proceeds must necessarily have been legally deposited or credited to the account of G. B. Harper, commissioner. On this check here in contemplation, and an additional indorsement of "G. B. Harper" followed the indorsement already upon its back, then the situation might be different. But mark you, under the rules of banking, requiring the person who shall ultimately receive or get credit for the proceeds to indorse his name upon the back of the check. What is such name in this case? On page 10 of the record it is shown to be "G. B. Harper, commissioner;" subsequent indorsements are only of the different collecting banks through which the check passed from the Bank of Hickory after the Bank of Hickory took it for collection from the Bay Springs Bank. On page 10 the clerk of the court below in making up the record has not clearly shown what part of the typewriting represents the face of the check and what part represents the indorsement on the back of the check, yet by referring to page 4 of the record it is shown that the words "G. B. Harper, commissioner," and subsequent notations on page 10 represent the indorsements on the back of the check. The cases of Isom v. First National Bank, 52 Miss. 902; Eyrick v. Bank, 67 Miss. 50, and Armour v. Bank, 69 Miss. 700, uphold our contention and the decision of the court below in this case.

The next ground of demurrer is that the bill fails to show that the defendant was in any way interested in the crediting of the check to the individual account of Harper or that it received any profit thereby. The reply to this contention is that a bank is in law presumed to hold itself to a very high degree of responsibility, and it is unnecessary in law under the circumstances, such as are set forth in the bill, to show that the bank was in any way interested or received any...