Ferry v. Ramsey Same v. James Same v. Ramsey Petroleum Co Same v. Ramsey Same v. Chastain Same v. Lloyd Harris v. Ramsey Same v. James Same v. Ramsey Petroleum Co Same v. Ramsey Same v. Chastain Same v. Lloyd, 407
| Decision Date | 14 May 1928 |
| Docket Number | No. 411,No. 410,No. 409,No. 412,No. 413,No. 416,No. 414,No. 408,No. 417,No. 407,No. 418,No. 415,407,409,411,413,415,417,408,410,412,414,416,418 |
| Citation | 48 S.Ct. 443,72 L.Ed. 796,277 U.S. 88 |
| Parties | FERRY v. RAMSEY et al. SAME v. JAMES et al. SAME v. RAMSEY PETROLEUM CO. et al. SAME v. RAMSEY et al. SAME v. CHASTAIN et al. SAME v. LLOYD et al. HARRIS v. RAMSEY et al. SAME v. JAMES et al. SAME v. RAMSEY PETROLEUM CO. et al. SAME v. RAMSEY et al. SAME v. CHASTAIN et al. SAME v. LLOYD et al |
| Court | U.S. Supreme Court |
Mr. L. J. Bond, of El Dorado, Kan., for plaintiff in error ferry.
[Argument of Counsel from pages 88-90 intentionally omitted] Messrs. S. M. Brewster and John L. Hunt, both of Topeka, Kan., and Bruce A. Campbell, of East St. Louis, Ill., for plaintiff in error Harris.
Mr. K. M. Geddes, of El Dorado, Kan., for defendants in error.
[Argument of Counsel from page 92 intentionally omitted] Mr. Justice HOLMES delivered the opinion of the Court.
These writs of error are brought by Ferry, formerly a director of the Butler County State Bank, of Kansas, and by the executor of a deceased director, to set aside judgments against them in suits by depositors in the bank, on the ground that the statutes of Kansas purporting to establish the directors' liability were contrary to the Fourteenth Amendment of the Constitution of the United States. The statutes were upheld by the State Court. Ramsey v. Adams, 122 Kan. 675, 253 P. 416; Id., 122 Kan. 691, 253 P. 423.
The plaintiffs (the defendants in error) made deposits in the bank at a time when it was insolvent but had not closed its doors. The statutes under which the directors were held liable to depositors and which are attacked here are Revised Statutes of Kansas, 1923, chapter 9, pars. 163, 164. The former of these makes it unlawful for any director to assent to the reception of deposits by his bank after he shall have had knowledge of the fact that it is insolvent. The law makes it the duty of the directors to examine into the affairs of the bank, and, if possible, to know its condition, and in case of his failure to do as required, he is to be held to have had knowledge of the insolvency of the bank, and is made 'individually responsible for such deposits so received.' By 9-164, in suits for deposits against officers 'the fact that such banking institution was so insolvent or in failing circumstances at the time of the reception of the deposit charged to have been so received, * * * shall be prima facie evidence of such knowledge and assent to such deposit * * * on the part of such officer, * * * so charged therewith.' It is said that 163 denies due pro- cess of law by creating a conclusive presumption of knowledge from ignorance and by implying that the director knowingly assented to a deposit that he should not have received, of which in fact he knew nothing. As to 164 it is said that facts are made prima facie evidence of other facts that they have no rational tendency to prove. The law as construed by the Supreme Court of Kansas meets its severest test in the cases against the executor of Kramer, because Kramer, although not so ignorant or incapable of knowledge as thought by the court of first instance, was seriously ill at the time of the deposits and seemed to have much to be said in his behalf, if the actual state of his knowledge had any relevancy as an excuse.
It is said that the liability is founded by the statute upon the directors' assent to the deposit and that when this is the ground the assent cannot be proved by artificial presumptions that have no warrant from experience. But the short answer is that the statute might have made the directors personally liable to depositors in every case, if it had been so minded, and that if it had purported to do so, whoever accepted the office would assume the risk. The statute in short imposed a liability that was less than might have been imposed, and that being so, the thing to be considered is the result reached, not the possibly inartificial or clumsy way of reaching it. If without any mention of assent or presumptions or prima facie evidence the statute had said: Every director of a bank shall be personally liable to depositors for every deposit accepted by the bank after it has become insolvent all objections would be met by the answer, You took the office on those terms. The statute would be none the worse if it allowed a defence in the single case of the defendants having made an honest examination and having been led to believe that the bank was solvent. The mention of assent and evidence of knowledge cannot be pressed to conclusions that the statute manifestly does not allow. The conclusions that, as construed by the State Court, it does impose, it imposes however much it may cut down the significance of the assent or knowledge to which it refers. As a matter of law there is nothing new in charging a party with knowledge of what it is his duty to know, in this case the insolvency of the bank, or with assent to deposits that he...
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United States v. Gainey, 13
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