Clarke v. Ripley Sav. Bank & Trust Co.
| Decision Date | 14 December 1943 |
| Citation | 181 S.W.2d 386,27 Tenn.App. 387 |
| Parties | CLARKE, Superintendent of Banks, v. RIPLEY SAV. BANK & TRUST CO. Intervention of HOWARD. |
| Court | Tennessee Court of Appeals |
Certiorari Denied by Supreme Court May 4, 1944.
Appeal from Chancery Court, Lauderdale County; W. W. Herron Chancellor.
Suit by H. B. Clarke, Superintendent of Banks, against the Ripley Savings Bank & Trust Company to wind up the affairs of the bank as insolvent, wherein S. A. Howard filed an intervening petition to recover from the receiver and the Federal Deposit Insurance Corporation a sum allegedly deposited in the bank. From a decree dismissing the intervening petition, the intervening petitioner appeals.
Affirmed.
For matter pleaded to constitute an "equitable estoppel" or "estoppel in pais" it must appear that pleader has been prejudiced, but "judicial estoppel" arises from sworn statements made in course of judicial proceedings, and is based solely upon public policy.
C. S. Carney and Craig & Durham, all of Ripley, for S. A. howard.
Steele & Steele, of Ripley, for receiver.
James M. Kane, of Chicago, Ill., for Federal Deposit Ins Corporation.
This case is before us on the intervening petition of S. A. Howard field in the cause brought by H. B. Clarke, Superintendent of Banks, for the purpose of winding up the affairs of the Ripley Savings Bank & Trust Company as insolvent. Howard seeks to recover of the receiver and the Federal Deposit Insurance Corporation, hereinafter referred to as the FDIC the sum of $2,500 which he deposited in the bank on December 7, 1938, but which was embezzled by G. M. Partee, W. Dan Majors and W. I. Stewart, the president, cashier and assistant cashier, respectively, of said bank, and never credited to his account on the books of the bank. The receiver and the FDIC denied liability on the ground that the bank had never gotten the benefit of the deposit, and that on March 1, 1939, Howard had loaned the money to the G. M Partee Insurance Agency, a partnership composed of G. M. Partee, W. Dan Majors and W. I. Stewart (the defaulting officers of the bank) and accepted its note endorsed by the said Partee, Majors and Stewart, for same; and had afterwards filed his claims based on said note, under oath, against the estates of the said Partee, Majors and Stewart, in bankruptcy, and had received the dividends allowed and paid on said claim from said bankrupt estates; and that he was thereby now judicially estopped to maintain his action against the receiver and the FDIC for said deposit.
On the hearing of the cause the chancellor dismissed the petition upon the following grounds which are set forth at length in his finding of facts embodied in the decree, to-wit:
(1) 'That the petitioner did not make a deposit of $2500 in the Ripley Savings Bank & Trust Company on December 7, 1938,' etc.; (2) 'That the petitioner S. A. Howard loaned the said $2500 to the G. M. Partee Insurance Agency and took its note for the same endorsed by G. M. Partee, W. Dan Majors and W. I. Stewart, and accepted said note well knowing that he had made said loan'; and
(3) 'That he had filed his sworn claims based on said note against the estates of the said G. M. Partee, W. Dan Majors and W. I. Stewart, in bankruptcy, and had received the dividends allowed and paid on said claims, and had joined as one of the petitioning creditors in the involuntary bankruptcy petition filed against the said William I Stewart; and that the petitioner is estopped by reason of having accepted said $2500 note and prosecuting his petition against William I. Stewart * * * and that the petitioner is estopped by his said acts from making any claim against the receiver of the Ripley Savings Bank & Trust Company and the Federal Deposit Insurance Company'.
There are six assignments of error in this court, all predicated upon the foregoing findings of the chancellor and upon his action in dismissing said petition.
It is shown in the proof, and appears to be conceded by all parties, that G. M. Partee, W. Dan Majors and William I. Stewart, the president, cashier and assistant cashier, respectively, of the Ripley Savings Bank & Trust Company, had for a long time prior to the failure of the bank been embezzling its funds, with the result that at the time of the failure their shortages amounted to approximately $80,000. One of the methods employed by them was in receiving deposits and entering them on the customer's pass book, stealing the money, and withholding the deposit slips, so that the deposits would not be entered on the customers' accounts on the books of the bank. These thefts were generally committed by Stewart, the assistant cashier, who received the deposits at the window, and he kept the record of the deposit slips that were withheld. Partee and Majors were equally guilty with him, however, and the stolen deposits were generally in some way handled through the G. M. Partee Insurance Agency, a partnership composed of the said Partee, Majors and Stewart. Partee, Majors and Stewart all admitted their peculations, plead guilty in the Federal Court at Memphis, and all were sent to the penitentiary.
The petitioner and his brother D. L. Howard sold their farm to Mrs. Effie Kennedy on December 7, 1938, and petitioner received Mrs. Kennedy's check for $2,500 for his half interest and D. L. Howard received her check for $500 and another tract of land for his share. Petitioner deposited his $2,500 check and received a duplicate deposit slip which was afterwards surrendered and the deposit entered on his pass book. D. L. Howard presented his check for payment and received $500 in cash. Both of the checks bear the stamped notation on the back thereof: Petitioner's deposit slip was withheld and it was never entered as a credit on his account on the bank's books. These same officers had also been withholding deposits from Mrs. Kennedy's account so that her balance, according to the bank's books, amounted to only $245.16 on December 7, 1938. On December 29th a false entry was made crediting her account with $3,000 to cover the two Howard checks, and the checks were charged to her on that date.
After the failure of the bank and when it appeared that there was a shortage the receiver called upon all of the depositors to bring in their pass books to be balanced. Mr. Hurt the liquidating agent of the bank admits that this deposit had been duly entered on petitioner's pass book.
On this proof we think the chancellor was in error in finding that petitioner did not deposit the $2,500 in the bank. The endorsement on the back of the check 'Deposit to the account of the within named payee', the entry of the deposit in petitioner's pass book, and Hurt's testimony, all indicate that the deposit was regularly made, and there is no evidence to the contrary. The first assignment of error is therefore sustained.
The petitioner is a farmer by occupation, wholly illiterate, and can neither read nor write. He had known Partee for forty years, had confidence in him and frequently called upon him for advice in business matters. Partee knew that he wanted to invest his money in another farm and tried to sell him some land that the bank owned or had an interest in. Lee Watkins a real estate agent tried to sell him several places but said Partee kept Howard from buying from him. As he expressed it, he wasn't a good enough friend of Howard's. Watkins said Partee told him he did not want this money to get out of the bank. Howard says that after he had spent two and a half or three months trying to find a place to suit him, Partee called him into the bank and advised him to get a 'bank certificate' (meaning a certificate of deposit) which would bear interest at 2 1/2 per cent for a year, that the bank was solvent, and that the Government would be behind the certificate; and that if he found a place to suit him the bank would let him have the money on the certificate to buy it. And he says Partee gave him a paper which he thought was a 'bank certificate' due in a year, but which he afterwards learned was a note of the G. M. Partee Insurance Agency due in one year, with interest at 2 1/2 per cent, and endorsed by Partee, Majors and Stewart. He says Partee told him to show it to Monroe Carney who was the county register, and ask him if it was not all right. Carney told him it was the note of the Partee Insurance Agency but that he thought it was good, as Partee had $100,000 worth of real estate. He said he replied that he was not loaning money, and that he went to see James T. Haynes, an attorney, and that Haynes told him that it was a note and that he did not think it was a good note; and that he then 'headed for the bank' but when he got there Partee had gone, so he left the note with Sam Berg for two days, and that he then returned it to Partee, and that he did not see it again until after the bank failed.
This note was dated March 1, 1939. On March 8th Howard bought a tract of land from P. B. Caldwell after getting Partee's advice. As a part of the consideration he assumed the payment of a Federal Land Bank loan of $1,600 and executed his note for the balance of $1,140. Partee agreed that the bank would discount this note and the matter was handled in this way. This was probably the same day that Howard returned the $2,500 note to Partee. Howard says that a short time after the bank failed he received the Partee Insurance Company note in the printed envelope of the Ripley Savings Bank & Trust Company. He doesn't know who sent it, whether Partee or agents of the receiver.
Hurt the liquidating agent, testifies that this note was not among the assets of...
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