Bramlette v. Joseph

• Decision Date: 03 April 1916
• Court: Mississippi Supreme Court
• Parties: BRAMLETTE ET AL. v. JOSEPH

71 So. 643

111 Miss. 379

BRAMLETTE ET AL. v. JOSEPH

Supreme Court of Mississippi

April 3, 1916

March 1916

APPEAL from the chancery court of Wilkinson county, HON. R. W CUTRER, Chancellor.

Suit by J. S. Joseph, receiver against D. C. Bramlette and others. From a decree overruling demurrers to the bill, defendants appeal.

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

Decree reversed.

Green &amp Green and Ackland H. Jones, for appellants.

Longino & Ricketts, for appellee.

OPINION

STEVENS, J.

I. S Joseph, as receiver of the bank of Woodville, an insolvent banking establishment, the estate of which is being administered by the chancery court of Wilkinson county, exhibited his bill of complaint in this cause against the directors of the bank, seeking to recover losses alleged to have been sustained by reason of certain loans made by the directors to Chas. Cohen, a fellow director, in excess of one-fifth of the capital stock of said bank. The bill avers that the suit is brought by authority of the chancery court, appointing and having jurisdiction of the receiver, names and sets out the directors serving each year from February 12, 1903, until January 16, 1907, and details various loans made to Mr. Cohen while he was a director, and charges that the bank suffered losses aggregating fifteen thousand, one hundred and thirty-two dollars and seventy-six cents. It is averred in the bill that Mr. Cohen was indebted to the bank in the sum of five thousand dollars when he became a director for money loaned to him; that the capital stock of the bank was twenty thousand dollars; that other loans, statement of which is filed as an exhibit to the bill, were made to Mr. Cohen from the time he was elected a director until January 16, 1907, when he resigned from the board of directors; and that at the time of his resignation he was indebted to the bank in the sum of twenty thousand, eight hundred and sixty-five dollars and sixty-four cents for money so loaned. It appears from the statement, filed as Exhibit A, that certain loans were made Mr. Cohen after he resigned as director, and that total payments or credits aggregate seven thousand, eight hundred and nineteen dollars, and forty-four cents. The bill charges that on or about January 20, 1909, the officers and directors of the bank abandoned all efforts to collect the balance of fifteen thousand, one hundred and thirty-two dollars and seventy-six cents then remaining due and unpaid, and caused to be entered on the books of the bank, in the bills receivable account, under the name of "Jonas Cain and others." a charge of the amount then due; that thereafter Mr. Cohen offered a composition to his creditors in settlement of all claims; that this composition was agreed to by the officers of the bank, and reported to and ratified by the board of directors; and that after making the said composition the said Cohen was fully insolvent. It is charged that Mr. Cohen was so completely insolvent that, had not said composition been accepted, he would have filed a voluntary petition in bankruptcy. The complainant, by leave of court, filed an amended bill, which goes more into detail in listing various loans made to Mr. Cohen, and giving the names and tenure of the various directors, including the statement of the time served by Mr. Cohen himself, and in a general restatement of material charges contained in the original bill. In addition to the detailed account of all the Cohen transactions with the bank, the amended bill avers that the directors and officers of the bank also loaned to one Ben Rothschild ten thousand, nine hundred dollars when the capital stock of the bank was only twenty-thousand dollars and when the largest loan that could lawfully be made any person out of the funds of the bank was four thousand dollars; that by reason of the making of said excessive loan to Rothschild the bank suffered a loss, the exact amount of which is unknown to complainant, but which is in excess of three thousand, nine hundred and ninety dollars and sixty-seven cents. The bill seeks to hold the officers and directors personally liable for losses sustained by reason of the various loans to Mr. Cohen, as also the loss sustained on account of the alleged excessive loan to Mr. Rothschild. The Bank of Woodville, according to the averments of the bill, is totally insolvent, and its receiver, acting under order of the court, claims the right to recover from the directors for the benefit of creditors loans made in violation of section 851 of the Code of 1892. From the detailed statement of the loans made to Mr. Cohen, it appears affirmatively that no loan was made to him between October, 1906, when the Code of 1906 became effective, and the time he resigned as director, January 16, 1907. It appears...