Suit by
Gibson County against the Fourth & First National Bank. From
a judgment denying recovery and dismissing the bill
complainant appeals, and; to review certain rulings relating
to the evidence, the defendant brings error.
Decree
dismissing bill affirmed.
Admission
of questions on cross-examination seeking to prove admissions
of witness under oath, which purported to lay grounds for his
contradiction, held not error, especially since cause was
heard by chancellor.
W. W
Herron, of Trenton, and Frank Wade and Aust, McGugin & Spears, all of Nashville, for Gibson County.
Maddin & Maddin and Seay, Stockell & Edwards, all of Nashville, for
Fourth & First Nat. Bank.
DE
WITT, Judge.
The
issue presented is as to liability of the Fourth & First
National Bank of Nashville in the sum of $197,872.14 to the
county of Gibson for alleged breach of trust in permitting
the substitution by Caldwell & Co. of certain corporate
stocks for bonds of Gibson county under a trust agreement
whereby said sum was lost to said county. Upon a voluminous
record the chancellor denied the recovery sought and
dismissed the bill. Gibson county appealed. The bank also
obtained a writ of error in order to challenge certain
rulings. of the chancellor in admitting and excluding
testimony. Both parties have therefore assigned errors,
supporting them with elaborate arguments and briefs.
The
following correct statement of the origin of this controversy
is embodied in the findings and opinion of the chancellor:
"Gibson
County for five or six years had been engaged in a road
construction program, and it previously sold to Caldwell & Company three of the issues of its bonds, the proceeds of
which were used in the furtherance of this program. It was
not desired or contemplated that Gibson County would
require or need the proceeds of the sale of these bonds at
one time, but would withdraw such amounts as were required
over a period of months. This had been the practice under
former issues.
"The
first bond sale made by Gibson County to Caldwell & Company
was on August 8, 1924, and amounted to $334,000. Caldwell & Company had under this agreement the privilege of
substituting other collateral from time to time with the
trustee, which collateral substituted was to consist of
U.S. Government, State, County and Municipal Bonds of equal
market value to the collateral for which it was substituted
and acceptable to the trustee.
"The
second bond sale between Gibson County and Caldwell & Company was made on February 20, 1928, and amounted
to $600,000 of bonds and the agreement provided, among
other things, that Caldwell & Company should have the
privilege of substituting from time to time other
collateral, provided the collateral offered was of equal
value and satisfactory to the trustee.
"The
third bond sale took place on October 15, 1929, and covered
$400,000 of bonds, and among other things in the contract
of sale it was provided that Caldwell & Company should have
the privilege of substituting from time to time other
collateral, provided the collateral offered was of equal
value and satisfactory to the trustee.
"These
bond sales, all of which had been satisfactory to Gibson
County, amounted to $1,334,000, but none of the written
agreements contained any provision giving Gibson County the
right at any time to object to the collateral substituted.
"It
appears that notices of the withdrawal and substitution of
collateral were given to Gibson County under these bond
sales, and some of these notices were mailed by the trustee
as late as August and September, 1930, and several of them
after trust agreement No. 4 was executed. It appears that
in August and September, 1930, under trust agreement No. 3
the same class of securities as are now objected to under
trust agreement No. 4 were substituted and notices given of
these withdrawals and substitutions to Gibson County.
"The
defendants show these withdrawals and substitutions and
neither Mr. Parker nor Mr. Overall, to whom the notices
were given, deny receiving them. Mr. Hassell, who served on
the committee negotiating the sale of the fourth bond
issue, served on the committee that negotiated the other
three issues.
"On
July 24, 1930, Caldwell & Company and Tigrett & Company
submitted to A. D. Hassell, chairman of the Gibson County
Bond Committee, an offer to purchase $500,000 of Gibson
County bonds. This offer was in the following language:
"'July
24, 1930.
"'A.
D. Hassell, Chairman,
"'Gibson
County Bond Committee,
"'Trenton,
Tennessee.
"'or
Five Hundred Thousand Dollars ($500,000.00) Gibson County,
Tennessee, 4 1/2 per cent Road Bonds dated July 1, 1930,
maturing without option of prior payment serially 1931 to
1955 inclusive principal and semi-annual interest, payable
at some Bank of New York, we will pay par value and accrued
interest to date of delivery upon delivery of bonds to us
at Nashville, Tennessee.
"'This
offer is for immediate acceptance and prompt delivery of
bonds, and conditioned upon their receiving the unqualified
approval of Chapman and Cutler as to the legality of issue
and sale and the sufficiency of tax and taxing power to
provide sufficient funds to pay principal and interest when
due. You to promptly furnish certified transcript and also
furnish bond blanks and pay bond attorneys.
"'We
hand you herewith our certified good faith check No. 3733
for Twelve Thousand Dollars ($12,000.00) to be held by you
uncashed and to be forfeited as liquidated damages if we
fail to comply with the terms of this agreement; otherwise
to be returned to us on delivery of bonds if above
attorneys decline to approve the bonds.
"'Respectfully
submitted,
Caldwell
and Company,
By H.
C. Alexander.
I. B.
Tigrett and Company,
By
Briscoe Sealy.
"'J.
F. Parker
"'A.
D. Hassell
"'E.
C. House. Co. Ct. Clk.
"'W.
W. Herron, Attorney,
"'C.
M. Overall, Trustee.'
"'July
24, 1930.
"'Gibson
County Bond Committee,
"'Trenton,
Tennessee.
"'A
condition of our bid for Five Hundred Thousand Dollars
($500,000.00) Gibson County, Tennessee, 4 1/2 per cent
highway bonds, date July 1, 1930, which is hereto attached,
is that on delivery of these bonds to us after approval,
proceeds of their sale are to be deposited with us, or
banks or bankers of our selection, without interest, said
proceeds to be checked upon only when needed to pay when
due for work as it progresses, or for any other purpose for
which it may be legally spent for which payment is due,
checks to be accompanied by approval vouchers.
"'We
or depository bank or bankers to deposit satisfactory
collateral security in some bank selected by us agreeable
to you, or give you other satisfactory security. Three
Hundred Thousand Dollars of said funds are to be deposited
with Caldwell and Company and Two Hundred Thousand Dollars
with I. B. Tigrett and Company. Each of said depositories
shall be only
responsible for its part of the deposit, there being no
joint liability for same.
"'Yours
very truly,
Caldwell
and Company,
By H.
C. Alexander.
I. B.
Tigrett and Company,
By
Briscoe Sealy.
"'Accepted
and agreed to by a resolution duly passed by the ___ this
24th day of July, 1930.
"'J.
F. Parker,
"'C.
M. Overall, Trustee Gibson County,
"'A.
D. Hassell,
"'W.
W. Herron, Attorney,
"'E.
C. House, County Court Clerk.'
"The
committee representing Gibson County was composed of A. D.
Hassell, who was the spokesman of the committee, J. F.
Parker, County Judge, C. M. Overall, County Trustee, E. C.
House, County Court Clerk, and W. W. Herron, Attorney for the
County. This committee was appointed by the County Court of
Gibson County for the purpose of negotiating the sale and
delivery of the bonds and came to Nashville, and on August 5,
1930, consummated the agreement of sale with Caldwell & Company at the latter's office and then went over to the
offices of the Fourth & First National Bank, just across the
street from the building occupied by Caldwell & Company,
where the trust agreement was executed by Mr. Randal Curell,
Trust Officer of the Fourth & First National Bank. The bonds
were then delivered to the Fourth & First National Bank as
depository, to be held under the aforesaid depository
agreement. This depository agreement had been signed by
Caldwell & Company before the committee came over to the
Fourth & First National Bank, and the agreement together with
the bonds were brought over to the Fourth & First National
Bank where execution of the aforesaid trust agreement was
made by said bank and the bonds deposited. Before the
committee came to Nashville the bonds had been signed by the
County Court Clerk of Gibson County at Trenton, and were not
signed by the County Judge until they reached the office of
Caldwell & Company.
"After
the execution of this instrument by Caldwell & Company the
committee went over to the Fourth & First National Bank and
had a conversation with Mr. Randal Curell, the Trust
Officer of that institution, and it is insisted by the
complainant that at the close of the conversation the
agreement was executed by Mr. Curell and the bonds
delivered. This agreement is in the words and figures as
follows:
"'Nashville,
Tennessee.
August
5, 1930.
"'Gibson
County, Tennessee.
"'Gentlemen:--
"'As
collateral security covering deposit made with us this day by
Gibson County, Tennessee, in the amount of Three Hundred and
One Thousand, Two Hundred and Seventy-Five Dollars
($301,275.00) we agree to...
