Citizens Nat. Bank of Meridian v. Golden
Decision Date | 23 March 1936 |
Docket Number | 31943 |
Citation | 166 So. 745,175 Miss. 508 |
Court | Mississippi Supreme Court |
Parties | CITIZENS NAT. BANK OF MERIDIAN v. GOLDEN |
1. BANKS AND BANKING.
National bank is liable, notwithstanding statute, for fraud and deceit or fraudulent representations by which a customer is led to make an investment on the faith of such fraudulent representations (Rev. St. U.S., section 5136, par. 7, as amended by Act Cong., Feb. 25, 1927, section 2, 44 Stat 1226, section 2).
2 BONDS.
In suit against bank for rescission of sale of bonds for fraud of agent in representing that bonds were guaranteed, admission for purpose of showing intent to deceive, of testimony of other witnesses than plaintiff as to similar transactions and representations made out of plaintiff's hearing by agent, held not error.
3 BONDS.
Bank customer suing for rescission of sale of bonds sold him by bank because of misrepresentations of bank's agent that bonds were guaranteed was not charged with duty of examining bonds to see terms until he found by actual knowledge that representations made were untrue.
HON. A. B. AMIS, SR., Chancellor.
APPEAL from the chancery court of Lauderdale county HON. A. B. AMIS, SR., Chancellor.
Suit by Robert Golden against the Citizens National Bank of Meridian. Judgment for plaintiff, and defendant appeals. Affirmed.
Affirmed.
Wilbourn, Miller & Wilbourn, of Meridian, for appellant.
The appellant's authority to sell the bonds was expressly limited by a proviso to paragraph 7 of section 5136 of the revised statutes of the United States, to a sale without recourse on it; and, in consequence, appellee was not entitled to rescind the sale and recover the price because of a representation by appellant's agent that the bonds were guaranteed, even if such representation were in fact made and were untrue, where the court has also held, as in this case, that the representation was made by such agent, honestly believing it to be true.
Awotin v. Atlas Exchange National Bank of Chicago, 162 So. 169, 55 S.Ct. 674, 79 L.Ed. 1393; Bullard v. Citizens National Bank, 160 So. 280, 173 Miss. 450; Bank of United States v. Owens, 2 Pet. 527, 7 L.Ed. 508; Brown v. Tarkington, 3 Wall. 377, 18 L.Ed. 255; Thomas v. City of Richmond, 12 Wall. 349, 20 L.Ed. 453; Continental Wall Paper Co. v. Louis Voight & Sons Co., 212 U.S. 227, 29 S.Ct. 280, 53 L.Ed. 486; Tome v. Parkersburg Branch R. R. Co., 39 Md. 36; Penn's Del. & Md. Steam Navigation Co. v. Dandridge, 8 Gill & John. 248; Duncan v. Md. Savings Institution, 10 Gill & John. 299; U. S. v. City Bank of Columbus, 21 How. 356; Merchants Bank v. Marine Bank, 3 Gill 125; Minor v. Merchants Bank of Alexandria, 1 Pet. 46; Weekler v. The First National Bank of Hagerstown, 42 Md. 581, 20 Am. Rep. 95; Third National Bank of Baltimore v. Boyd, 44 Md. 47, 22 Am. Rep. 35; Wiley v. First National Bank, 47 Vt. 546; First National Bank of Lyons v. Ocean National Bank, 60 N.Y. 278; Lazear v. National Union Bank of Maryland, 52 Md. 78, 36 Am. Rep. 355; United Bank of Baltimore City v. Katz, 57 Md. 128; Central Transportation Co. v. Pullman Palace Car Co., 139 U.S. 24, 35 L.Ed. 55; Carlton Mining & Power Co. v. W.Va. Northern R. R. Co., 145 S.E. 42; 7 Ehc. Dig. Va. & W.Va. 268; Three Star Pood Products Corp. v. Ofsa, 94 W.Va. 636, 119 S.E. 859, 29 A. L. R. 1053; Tate v. Commercial Building Assn., 97 Va. 74, 33 S.E. 382, 45 L. R. A. 243, 75 Am. St. Rep. 770; Camp v. Bruce, 96 Va. 521, 31 S.E. 901, 43 L. R. A. 146, 70 Am. St. Rep. 873; Pullman Palace Car Co. v. Central Transportation Co., 171 U.S. 138, 18 S.Ct. 808, 43 L.Ed. 108; Tueker v. Hibernia Bank & Trust Co., 251 S.W. 406; Southern Ry. in Mississippi v. Buckeye Cotton Oil Co., 126 Miss. 562, 89 So. 228; Brookhaven Lbr. Mfg. Co. v. Miss. C. R. Co., 122 So. 472; Gulf, M. & N. R. R. Co. v. Riverside Brick & Mfg. Co., 107 So. 193, 141 Miss. 505; Lexington Compress & Oil Mill Co. v. Y. & M. V. R. Co., 95 So. 92, 131 Miss. 49; Central Warehouse Co. v. Chicago, R. I. R. Co., 20 F.2d 828; Wheeling & L. E. Ry. Co. v. Standard Envelope Mfg. Co., 2 F.Supp. 637.
The appellee failed to establish, by competent and admissible testimony that is clear and convincing that appellant's agent represented that the bonds were guaranteed by United States Fidelity & Guaranty Company and Maryland Casualty Company.
The appellee failed to overthrow the answer denying the allegations of the bill by two witnesses, or one witness and competent corroborating circumstances.
There is reversible error in the admission of the testimony of the witnesses Pigford, Hosey, Bass and Cooper, as to statements claimed to have been made to them at other times, by the agent, Blanks, not in the presence of nor communicated to appellee, it appearing that no general scheme to defraud was alleged nor proved and that scienter and intent were wholly immaterial, and that the court based a finding, that the statement relied on by appellee was made to him, largely upon the testimony of such witnesses that like statements were made to them, while at the same time finding facts clearly showing that there was no actual purpose or intent to defraud.
Miss. Power Co. v. Bennett 178 Miss 109, 161 So 301; Stowe v. Wootmt, 62 S.W.2d 67, 37 S.W.2d 1055; Day v. Stone, 50 Tex. 612; Bwyer v. Bassett, 1 Tex. Civ. App. 513, 21 S.W. 621; Butler v. Watkins, 13 Wall. 456, 20 L.Ed. 629; 12 R. C. L. 436; Jordan v. Osgood, 109 Mass. 457, 12 Am. Rep. 731; Perkins v. Prout, 47 N.H. 387, 93 Am. Dec. 449; Wilson v. Carpenter's Admr., 91 Va. 183, 21 S.E. 243, 50 Am. St. Rep. 824; MeKay v. Russell, 3 Wash. 378, 28 P. 908, 28 Am. St. Rep. 44. Lott v. Dashiele, 233 S.W. 1103; Bullard v. Citizens Nat. Bank, 160 So. 280; Alexander v. Meek, 132 Miss. 298, 96 So. 101; Fay & Eagan Co. v. Cohn & Bros., 158 Miss. 733, 130 So. 290; Jones on Evidence. sec. 140; J. H. Clark Co. v. Rice, 106 N.W. 231; Standmd Mfg. Co. v. Slot, 121 Wis. 14, 98 N.W. 923, 105 Am. St. Rep. 1016; West Florida Land Co. v. Lewis, 25 So. 274; Aiken v. Kenmson, 58 Vt 665, 5 A. 757; Kelley v. Schupp, 60 Wis. 76, 18 N.W. 725; Evans v. Koons, 10 Ind.App. 603, 38 N.E. 350; Barden v. Keverberg, 2 Mees. & W. 61; Land Co. v. Stude-baker, 37 Pla. 28, 19 So. 176; Huganir v. Cotter, 92 Wis. 1, 65 N.W. 364; Johnson v. Guliek, 46 Neb. 817, 65 N.W. 883; McKee v. National Bank & Trust Co., 159 So. 669; May v. Roberts, 219 P. 55; Orient Land Co. v. Reeder, 173 S.W. 939; Ogden Valley v. Lewis, 41 Utah 183, 125 P. 687; Bernheiln Bros. v. Dibrell, 66 Miss. 199, 5 So. 693; United States Fidelity & Guaranty Co. v. Citizens Bank of Morehead, 116 So. 605; Nash Miss. Valley Mtr. Co. v. Childress, 125 So. 708, 156 Miss. 157; 12 R. C. L. 453, sec. 182; 2 Jones' commentaries on Evidence (2d), page 1151, sees. 618, 619; Castle v. Bullard, 23 How. (64 U. S.) 172, 16 L.Ed. 424; McCain v. Cochran, 120 So. 823, 153 Miss. 237; Jacks v. Bridewell, 51. Miss. 881; Waller v. Shannon, 53 Miss. 500; Holmes v. Lemon, 15 So. 141.
The decree of the court is contrary to the law and the evidence.
Deshatreaux v. Baton, 131 So. 346, 159 Miss. 236; Germania Life Ins. Co. v. Bouldin, 100 Miss. 660, 56 So. 609; Home Mutual Fire Ins. Co. v. Patterson, 71 So. 739, 111 Miss. 429; Springfield Fire & Marine Ins. CO. v. Nix, 138 So. 518, 162 Miss. 669; 20 Cyc. 49; Corley v. Redd, 164, Miss. 678, 145 So. 241; Continental Jewelry Co. v. Joseph, 105 So. 639, 140 Miss. 582; Gunter v. Henderson Molpus Co., 115 So. 720, 149 Miss. 603; American Oil Co. v. Williamson, 122 So. 488, 154 Miss. 441.
The appellee, under the facts disclosed by the record, waived the right to rescind by failing to give notice of a desire or intent to rescind within a reasonable time after he knew of, or was charged with knowledge of, sufficient facts to put him on inquiry as to the untruth of the alleged representation.
Sec. 483, Restatement of the Law of Contracts; Selma v. Anderson, 551 Miss. 829; Collins v. Collins, 150 So. 660; Richardson v. Lowe, 149 F. 625; Baldwin v. Anderson, 103 Miss. 462, 60 So. 578; Parker v. Foy, 43 Miss. 260; Figh v. Takes, 82 So. 495; 13 C. J. 611, sec. 653; Wilson v. New U. S. Cattle Ranch Co., 73 F. 994; Elgen v Snyder, 118 P. 280; 2 Black on Rescission and Cancellation of Contracts, page 1336, sec. 542; Parham v. Randolph, 4 How. 435; Brown v. Norman, 65 Miss. 369, 4 So. 293; Bonner v. Bynum, 72 Miss. 442, 18 So. 82; v. Lake v. Perry, 95 Miss. 550, 49 So. 569; Bullard v. Citizens National Bank of Meridian, 160 So. 280; Miss. Power Co. v. Bennett, 161 So. 301; Nash Miss. Valley Mtr Co. v. Childress, 125 So. 708, 156 Miss. 157; Capital Security Co. v. Holland, 60 So. 495; Gorman v. Carlisle, 124 So. 288.
There was no proof of damage proximately resulting from the alleged misrepresentaiion on which the right to rescind is based, and there can be no rescission for misstatements not resulting proximately in damage.
Harris v. Ransom, 24 Miss. 504; American Rio Grande Land & Irrigation Co. v Bellman, 272 S.W. 650; Black on Rescission (2 Ed.), sec. 112.
Lester E. Wills, of Meridian, and T. J. Wills, of Hattiesburg, for appellee.
The testimony of the conversation Golden had with Gilbert and that he had with the attorney Jones at Waynesboro, was admitted by the court for the purpose of showing the state of mind of Golden and what he believed about the bonds being guaranteed by the guaranty companies and what in formation he had with respect thereto in rebuttal to the allegations of the answer that he had not acted promptly and with diligence in rescinding the contract and demanding the restitution for the fraud so perpetrated on.
Point 1, urged, by appellants, is to the effect that a suit of this character is barred by paragraph 7, section 5136, Revised Statutes of the United States, as amended February 25, 1927,...
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