First Nat. Bank of Laurel v. Johnson

• Decision Date: 07 December 1936
• Docket Number: 32434
• Citation: 177 Miss. 634,171 So. 11
• Court: Mississippi Supreme Court
• Parties: FIRST NAT. BANK of LAUREL v. JOHNSON

171 So. 11

177 Miss. 634

FIRST NAT. BANK of LAUREL v. JOHNSON

No. 32434

Supreme Court of Mississippi

December 7, 1936

Division B

Suggestion Of Error Overruled, January 18, 1937.

APPEAL from the circuit court of Jones county HON. W. J. PACK Judge.

Action by J. J. Johnson against the First National Bank of Laurel. From a judgment for plaintiff, the defendant appeals. Reversed, and judgment rendered for defendant.

Reversed, and judgment here for appellant.

Welch & Cooper, of Laurel, for appellant.

Where one purchases from another bonds which immediately default and the purchaser demands the money back, a suit thereafter brought for the consideration of the purchase is nota suit on a written contract even though ir be conceded that the original purchase was evidenced by written contract.

Warren Godwin Lbr. Co. v. Lbr. Mineral Co., 82 So. 257, 120 Miss. 346.

A receipt for six thousand dollars for Pacific Spruce six and one-half bonds is not such a written contract as will bring into play the six-year statute of limitations rather than the three-year statute.

Foote v. Farmer, 14 So. 445, 71 Miss. 148; Blount v. Miller, 160 So. 598, 172 Miss. 492; City of Hattiesburg v. Cobb Bros. Const. Co., 163 So. 676, 174 Miss. 20; Wally v. L. N. Dantzler Lbr. Co., 81 So. 489, 119 Miss. 700; Federal Land Bank v. Collins, 127 So. 570, 156 Miss. 893; Lehman v. Powe, 49 So. 622, 95 Miss. 446; Hembree v. Johnson, 80 So. 554, 119 Miss. 204; Pate Lbr. Co. v. Southern Ry., 76 So. 481, 115 Miss. 402; Cock v. Abernathy, 28 So. 18, 77 Miss. 872.

Where the testimony for the plaintiff is unreasonable and unconvincing and is not supported by any other material fact, the case should be reversed for a new trial on the facts.

Southern Ry. v. Elder, 80 So. 333, 118 Miss. 856.

The verdict in the case is excessive and contrary to evidence.

The general rule is well established in courts of equity, that in cases of fraud, the statute of limitations begins to run only from the time of discovery of the fraud, and that in many cases of that nature, the court will interfere to prevent the bar of the statute. But this rule is not without restrictions, and will not be applied where, in reference to other principles of equity, it would de feat the policy and equitable operation of statutes of limitations; and, consequently, there are many limitations to the operation of this rule. Thus, it will not apply where the party affected by the fraud might with ordinary diligence have discovered it.

Buckner v. Calcote, 28 Miss. 432; Hudson v. Kimbrough, 20 So. 885, 74 Miss. 341.

In the case of Long v. Strauss, 107 Ind. 94, 57 Am. Rep. 87, the court held the receipt to be a writing and controlled by the statute of limitations applicable thereto because of the use of the words "on deposit."

One who has been induced by fraud to enter into a contract may, subject to the limitations hereafter stated, rescind it, whether the contract is oral or written.

13 C. J. 611; Barber v. Loveland, 146 So. 854, 166 Miss. 625.

The fact that the bonds had not been received made the rescission simpler as there would be nothing for appellee to tender to appellant.

Paul B. Johnson, of Hattiesburg, for appellee.

It is a matter of common knowledge among the business and professional men that there are today millions of dollars in bonds outstanding sold by the banks of Mississippi that are practically without value; the holders, many of them widows, ate under the impression that the banks are not responsible for them and many of the holders have allowed the time to run out for the bringing of a suit against the banks. If the holders of such bonds, as in the case at bar, wait for the banks to notify them to come get their money back, they with never get it.

The six-year statute of limitations applies in this case because the receipt mentioned shows clearly the amount received by the bank and that money was received for the purpose of the bonds. Complete description of the bonds is written in the face of the receipt. This is a sufficient acknowledgment in writing of the statement of facts out of which the law implies an obligation to repay, and therefore the obligation to pay does not rest in parol.

Fowlkes v. Lea, 84 Miss. 509, 36 So. 1036; Cock v. Abernathy, 77 Miss. 872, 28 So. 18; Washington v. Soria, 72 Miss. 665; Masonic Benefit Association v. First State Bank of Columbia, 99 Miss. 610.

It is not necessary, as will be seen from the authorities, that the writing evidencing the contract be signed by the party sought to be charged. It is a contract in writing in the sense of the statute, if ir is provable by writing; and ir is not necessary that the writing itself shall contain ah express promise to pay. It is sufficient if the promise to pay may be implied from the writing. In the case at bar, in order to raise the promise to pay by appellee, it is only necessary to resort to appellant's bank passbook and certificates of deposit, in connection with the canceled check in question, all of which are in writing. From the bank book and certificates there was an implied promise by appellee to return to appellant all funds deposited with it, not legally transferred by the latter by check or otherwise. We think clearly the statute of limitation of six years applies, and not that of three.

Counsel for appellant claims that the receipt, unaided by supplementary evidence, carries no promise to pay and no presumptive liability whatever; but such is not the law of Mississippi.

Folkes v. Lea, 36 So 1036; Cock v. Abernathy, 77 Miss. 872; Washington v. Soria, 73 Miss. 665; Masonic Benefit Assn. v. Bank, 99 Miss. 610.

Appellant bank never at any time gave appellee any affirmative notice that it did not intend to deliver the bonds and appellee never knew that the fraud was perpetrated upon him until in the early part of 1936, which places this case clearly on all fours with Milan v. Paxton, 134 So. 171.

Appellee made out a clear case against appellant. He proved every material allegation of his declaration by unimpeachable testimony.

Argued orally by Ellis B. Cooper, for appellant, and by Paul B. Johnson, for appellee.

OPINION

Griffith, J.

For many years appellant bank has maintained ah investment department, and for several years, and up to the time of his death in the spring of 1933, Mr. C. H. Ferrell, assistant cashier, was in immediate charge of that department. From time to time appellee, then a customer of the bank, had purchased investment bonds through Mr. Ferrell, and particularly on April 2, 1924, he purchased through him, and the bank, bonds of the Pacific Spruce Corporation to the amount of six thousand dollars, the bonds bearing interest at six and one-half per cent., payable semiannually. These bonds were kept by appellee in a private box in the safety deposit vault of the bank.

On April 1, 1931, appellee took from the said bonds the interest coupons due on that day and deposited them to his account in the bank. The coupons having been forwarded by the bank for collection, they were returned to the bank on April 14, 1931, uncollected, and with the information that the Spruce Corporation had defaulted in its bonds, and that its affairs were in such condition that a bondholders' protective committee had been organized, and it was suggested that all bondholders forward their bonds to that committee. On this same day, the bank mailed a registered letter, addressed to appellee, returning to him the coupons and advising appellee of the above-mentioned information which it had received. This registered letter was delivered to a son of appellee sometime during the day of April 16, 1931.

According to the version of appellee, he was leaving his home in Laurel, on the morning of April 16, 1931, for a short trip to Florida, and that he went to the bank as soon as it opened that morning in order to draw from his checking account the expense money for the trip; that as soon as he entered the bank he was accosted by Mr. Ferrell who urged him to make an additional investment in the Pacific Spruce Corporation six and one-half bonds; and in his declaration appellee avers that Ferrell represented the bonds as being as good as the bank and even better than government bonds; that appellee had not then received or seen the letter about these bonds registered to him by the bank two days theretofore, but believing and relying on the representations of Ferrell, he agreed to purchase bonds in said Spruce Corporation in an additional amount of six thousand dollars face value; that he and Ferrell then immediately went to the safety deposit vault of the bank and that appellee took from Ms private box therein currency in the sum of six thousand dollars, which he delivered to Ferrell, who then put the money "in the other vault, the big vault in the...