Deposit Bank of Midway's Assignee v. Hearne

• Decision Date: 01 December 1898
• Citation: 104 Ky. 819,48 S.W. 160
• Parties: DEPOSIT BANK OF MIDWAY'S ASSIGNEE v. HEARNE. [1]
• Court: Kentucky Court of Appeals

48 S.W. 160

104 Ky. 819

DEPOSIT BANK OF MIDWAY'S ASSIGNEE v. HEARNE. ^[1]

Court of Appeals of Kentucky.

December 1, 1898

Appeal from circuit court, Woodford county.

"Not to be officially reported."

Action by the assignee of the Deposit Bank of Midway against J. D Hearne on the bond of C. W. Stone as bank clerk. Judgment for defendant, and plaintiff appeals. Reversed.

D. L Thornton and Richard Godson, for appellant.

Ed M Wallace and Davis & McLeod, for appellee.

HAZELRIGG J.

One C W. Stone was elected clerk of the Deposit Bank of Midway some time in the year 1872, and executed bond for the faithful performance of his duties, with one Wiggins as his surety. The surety died, and in 1883 Stone executed another bond of like character, with the appellee, Hearne, as his surety. No other election or appointment of Stone seems ever to have been made or other bond executed. In 1891 he fled the country, it having been discovered that he and the cashier of the bank had used its money, and for years had been fraudulently concealing their transactions by false entries. This suit was then instituted by the assignee of the bank against Hearne on the bond of 1883, but the court, holding that under the charter of the bank the term of office of the clerk was one year, dismissed the action.

The charter provided that the subscribers for stock in the proposed institution should meet, and elect five directors who should be stockholders, and who should serve until the January following the election; and that annual meetings of stockholders should be held, and oftener if required. It is then provided "that the officers shall hold their offices for one year, and until their successors shall be elected, but may be removed by a majority at any regular or called meeting of the stockholders. The directors may choose one of their number as their president, may appoint a secretary, and such other officers as they may require, fix their compensation, prescribe their duties, and take bond and security for the faithful discharge thereof." The "officers" who are to hold their offices for one year, manifestly, are the same officers who "may be removed" by the stockholders at any regular or called meeting. The context shows this conclusively. The stockholders were to elect the directors, and the succeeding clause may be read thus: These officers shall hold their offices for one year, and until their successors shall be elected, but (they) may be removed by a majority of the stockholders, etc. The stockholders do not elect the clerk, nor do they have anything to do with his removal. The word "officers," in the sentence fixing the term at one year, means the directors, because these are the officers who might be removed by the stockholders. It is further provided that the directors may appoint a secretary, and such other officers as they may require, and take bond and security for the faithful discharge of their duties. Here we do not doubt is meant, not only a secretary as named, but teller, cashier, or clerk; and therefore the cashier, and the clerk as well, may not inappropriately be deemed officials, or officers, of the bank, within the meaning of the charter. The cashier and the clerk were the only officers from whom bonds were exacted. But, when we look to find the term of office of these persons or...