Bartlett v. McCallister
Decision Date | 20 December 1926 |
Docket Number | No. 25198.,25198. |
Citation | 289 S.W. 814 |
Parties | BARTLETT et al. v. McCALLISTER et al. |
Court | Missouri Supreme Court |
Appeal from Circuit Court, Livingston County; Arch B. Davis, Judge.
Suit by Ralph S. Bartlett and others against Joe McCallister and another, copartners, etc., the Milan State Bank, Frank C. Millspaugh, State Commissioner of Finance, and another. From the judgment rendered, defendants Bank and Commissioner appeal. Affirmed.
T. E. Francis and Ernest A. Green, both of St. Louis (William C. Irwin, of Jefferson City, of counsel), for Milan State Bank and another.
Chas. II. Mayer, of St. Joseph, for respondents.
Suit in equity to have certain assets of the Milan State Bank in the hands of the commissioner of finance impressed with a trust in favor of respondents. The case was tried in Livingston county after change of venue from Sullivan county. The trial court found that the assets of said hank in the hands of said commissioner should be impressed with a trust in favor of Bartlett Bros. Land & Loan Company, to the extent of $16,600 and interest, and allowed same as a claim, superior to the claims of depositors and general creditors, found for defendants in other respects, and rendered judgment accordingly. From such judgment said bank and the commissioner of finance were granted an appeal.
On and prior to May 12, 1920, the Milan Bank at Milan, in Sullivan county, herein usually referred to as the "old bank," became insolvent and was taken over by the commissioner of finance. On May 22, 1920, the Milan State Bank, herein usually referred to as the "new bank," having just been organized for the purpose, took over the assets and assumed the obligations of the old bank. It continued as a banking institution until October 13, 1921, when it in turn failed and its assets were taken over by the commissioner of finance. The claim that assets of the new bank were impressed with a trust grew out of transactions prior to the failure of the old bank.
Instead of applying the proceeds as directed, McCallister Loan Company deposited the check in the old bank to their credit and it was paid to said bank in due course. Joe McCallister, one of the partners in the loan company, was cashier and managing executive officer of the old bank and knew all about the directions given by Bartlett Bros. Land & Loan Company when it sent its check to the McCallisters. Thereafter $30,000 of the McCallister Loan Company account, which included the proceeds of the Bartlett Bros. Land & Loan Company check, was transferred to the account of McCallister and Schooling by a cheek drawn by McCallister Loan Company. The account of McCallister and Schooling was afterward checked out and used for purposes of McCallister and Schooling. None of the money was used to pay off the Reuben Payne note, which was afterwards purchased by Bartlett Bros. Land & Loan Company to protect itself.
The two McCallisters and Schooling were directors of the old bank and were the only officers of the bank who had any knowledge of the transactions leading up to the deposit of $29,355 in the bank by McCallister Loan Company and of the directions given McCallister Loan Company when the check was sent to the McCallisters. On May 10, 1920, a check was drawn on the McCallister and Schooling account for $16,600 in payment for two notes then owned and held by the old bank. One note was for $10,600, payable to Joe McCallister, dated April 22, 1920, and due one year after date, bearing 6 per cent. interest from maturity, signed by Gus Hoselton and wife, and indorsed by Joe McCallister. Said note was secured by a second or third mortgage on land. The other note was for $6,000, payable to the old bank, signed by Mark E. McCallister, and not yet due when purchased. Both, of said notes were worthless at the time of the trial and probably at the time the old bank received the $16,600.
It seems that, after the proceeds of the Bartlett Bros. Land & Loan Company check came into the possession of McCallister and. Schooling and were misappropriated, Schooling and Mark E. McCallister contracted to sell the land covered by the Reuben Payne deed of trust to Ralph S. Bartlett and Erwin J. Bartlett (Bartletts who were not connected with Bartlett Bros. Land & Loan Company). They secured several thousand dollars from them upon the misrepresentation that the Reuben Payne note had been paid. Said Bartletts joined Bartlett Bros. Land & Loan Company as plaintiffs. Schooling was also named as plaintiff. As none of the plaintiffs, except Bartlett Bros. Land and Loan Company, were granted any relief, we see no occasion for going into other transactions, except to show the devious ways of the McCallisters. It was not until late in December, 1920, or early in January, 1921, that Bartlett Bros. Land & Loan Company learned that the Reuben Payne note had not been paid and the deed of trust had not been canceled as directed. This suit was filed February 25, 1921, and had been pending nearly eight months when the new bank failed. When the commissioner of finance took over its assets on October 13, 1921, the notice required by law to all creditors was duly published. The plaintiffs in this suit filed no claim against the new bank with the commissioner of finance within four months after said notice.
We have only briefly sketched the facts which we regard as essential to an understanding of the issues before us. If further facts appear important, they will be stated in the course of the opinion.
I. Appellants contend that this suit can not be maintained because respondents have not complied with section 11720, R. S. 1919 (Laws of 1915, p. 123). They also contend that the suit should have been dismissed under the provisions of section 11700, subsec. (3) R. S. 1919.
Said section appears to have no application to actions instituted against the bank before its assets are taken over by the commissioner of finance.
Assuming, without so deciding, that section 11700, subsec. (3), applies to suits pending against the bank when the commissioner takes charge and that the commissioner might have had the suit at bar dismissed under said section, had he sought to avail himself of his right, we are satisfied that he waived his right to have same dismissed. The suit was pending against the new bank when the commissioner closed it and took over its assets. Within four months after the commissioner gave the statutory notice and at a time when respondents could have timely presented to him for approval a claim against the bank under sections 11716 to 11719, inclusive, if they deemed such action necessary, the following stipulation was filed:
But for such waiver and if so advised, respondents could have dismissed this suit, filed their claim with the commissioner, and, upon failure of the commissioner to approve same, could have timely filed another suit upon the same cause of action. The same result was accomplished by filing the waiver in the pending suit and permitting it to proceed against the commissioner. The law does not require the doing of a useless thing.
Appellants contend that the commissioner had no power to waive the statutory requirement that actions...
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