Ferrell v. Milford State Bank

• Decision Date: 12 July 1929
• Docket Number: No. 4594.,4594.
• Citation: 19 S.W.2d 312
• Parties: FERRELL v. MILFORD STATE BANK et al.
• Court: Missouri Court of Appeals

19 S.W.2d 312

FERRELL v. MILFORD STATE BANK et al.

No. 4594.

Springfield Court of Appeals. Missouri.

July 12, 1929.

Appeal from Circuit Court, Barton County; B. G. Thurman, Judge.

Proceeding by B. H. Ferrell against the Milford State Bank and S. L. Cantley as Commissioner of Finance in charge thereof, and Frank Winchester and others as objecting creditors. From the judgment, plaintiff and the objecting creditors appeal. Affirmed.

Gertrude M. Williams, of Lamar, for appellants objecting creditors.

E. L. Moore, of Lamar, for appellant Ferrell.

COX, P. J.

This is a proceeding by B. H. Ferrell to have a claim of $2,000 allowed against the Milford State Bank now in course of liquidation and have it declared a preference. Certain other creditors filed objections to the claim being allowed at all. Trial was had before the court which resulted in the claim being allowed to plaintiff as a general creditor and his claim for preference being disallowed. Both plaintiff and the objecting creditors appealed. In this court plaintiff has waived his claim for a preference, which leaves the objecting creditors as the only appellants. The deputy commissioner of finance in charge of the liquidation of the bank did not appeal.

Plaintiff, Ferrell, raises the question of the right of objecting creditors to appeal and asks that their appeal be dismissed. Some authorities are cited on both sides of this question, but we do not find that the question has been directly passed upon in this state. If the appeal of the objecting creditors were dismissed, that would end this case here; but since the same result would be reached by disposing of the case on its merits, we shall pass by the question of the right of appeal and proceed to a consideration of the case upon its merits.

The facts are undisputed and are as follows: The Milford State Bank was a Missouri corporation doing a banking business at Milford, Mo. C. C. Duncan was its cashier, and plaintiff, Ferrell, was a member of its board of directors. This bank needed to borrow money. The cashier and this plaintiff went to another bank and on their personal note borrowed $2,000 and placed this sum in the Milford Bank, and thus increased its assets to that extent. The bank held a note by a Mr. Borden which was given to Ferrell as collateral to secure him on his obligation upon the note of himself and Duncan to the other bank. After the bank failed, this Borden note, on the demand of the finance commissioner in charge of the bank, was surrendered to him by the plaintiff. About a month after the $2,000 was paid into the Milford Bank, it failed and went into the hands of the state finance commissioner for liquidation. Plaintiff paid the note of himself and Duncan of $2,000 to the other bank and filed a claim against the Milford Bank for that sum and asked that he be allowed a preference. Certain other creditors filed objections to plaintiff's claim being allowed at all. The trial in the circuit court resulted as above stated.

Under our statute a bank has the right to borrow money but can only do it by order of its board of directors. The minutes of the board showed no entries in relation to this $2,000 nor the delivery to plaintiff of the Borden note as collateral. The contention of the appealing creditors is that, since the board of directors did not authorize the bank to borrow money from Ferrell, he must be held to have made a gift of $2,000 to the bank. He clearly did not so intend it or he would not have taken the Borden note as collateral. It is clear, however, that Ferrell had no binding ...