Kimbrough v. Carter

• Decision Date: 19 June 1922
• Docket Number: 22029
• Citation: Kimbrough v. Carter, 129 Miss. 337, 92 So. 228 (Miss. 1922)
• Court: Mississippi Supreme Court
• Parties: KIMBROUGH ET AL. v. CARTER ET AL

92 So. 228

129 Miss. 337

KIMBROUGH ET AL. v. CARTER ET AL

No. 22029

Supreme Court of Mississippi

June 19, 1922

APPEAL from chancery court of Lafayette county, HON. JAS. G MCGOWEN, Chancellor.

Suit by R. C. Carter and others against Duke M. Kimbrough and others and from the decree therein the defendants appeal and the complainants cross-appeal. Reversed, and decree rendered.

Reversed.

Wilson & Armstrong, H. H. Creekmore and J. W. T. Falkner, for appellant.

C. L Bates and L. C. Andrews, for appellee.

OPINION

SMITH, C. J.

This is a suit in equity in which a number of creditors and stockholders of the Merchants' & Farmers' Bank of Oxford, Miss., seek to recover from the directors of the bank money alleged to have been loaned and lost by the bank because of the negligence of its directors. Two of the directors were also receivers of the bank, the affairs of which were in liquidation when the original bill herein was filed. The case was here on appeal once before as Carter et al. v. Kimbrough et al., 122 Miss. 543, 84 So. 251. The court below, after finding that money of the bank had been lost through the negligence of its directors, submitted the cause to a master to state an account thereof, and on the coming in of his report rendered a decree against the directors for a portion of the amount reported by the master as having been lost to the bank because of their negligence. A receiver was appointed to collect the judgment rendered, and with instructions to ascertain the names of all of the bank's creditors and stockholders, both those who joined in the bill filed herein as complainants and those who did not, and report them to the court for further direction as to the distribution of the money collected by him herein. From this decree the defendants in the court below prosecuted a direct and the complainants a cross appeal.

The master's report sets forth a liability of the directors for money loaned to Bogard & Harkins through a series of years amounting, at the date of his report, including interest, to nineteen thousand seven hundred eighty-one dollars and fifteen cents, and a liability for money loaned to Bishop & Stahl through a series of years, amounting, at the date of his report, including interest, to twenty-two thousand seven hundred seventy-four dollars and two cents. On final hearing the directors were adjudged not liable on the Bishop & Stahl indebtedness, but a decree was rendered against them on the indebtedness of Bogard & Harkins, and we cannot say from the evidence that the court below erred in so holding, except that there is an error in the amount of interest allowed on the Bogard & Harkins debt. Various sums were collected on this debt by the regular receivers of the bank, and in stating the amount the master computed the interest on the debt to the date of a collection, deducted the amount of the collection from the aggregate of the principal and interest, and brought the balance down as a new principal; repeating this process for each successive collection. This was the correct method when the amount collected exceeded the interest then due, but when the last collection was made the interest then due was greatly in excess of the amount collected, and in order to prevent the awarding of usury the rule is that:

"Where the payment does not equal or exceed the amount of interest due at the time when it is made, interest on the first principal should be computed until such time as the aggregate partial payments made equal or...