Kroeger v. Garkie

Decision Date14 July 1925
Docket NumberMo. 19084.
Citation274 S.W. 478
PartiesKROEGER v. GARKIE et al.
CourtMissouri Court of Appeals

Appeal from Circuit Court, Lewis County; James A. Cooley, Judge.

"Not to be officially published."

Action by George L. Kroeger against Eli Garkie and others. Judgment for defendants on demurrer, and plaintiff appeals. Affirmed.

Hilbert & Hilbert, of Canton, for appellant.

Glahn & Diemer, of Palmyra, and Rendlen & White, of Hannibal, for respondents.

DAVIS, C.

This is an action by a depositor against the directors of a state bank for a balance remaining in the bank's custody out of a deposit with the bank, made at a time when the directors knew the bank was insolvent. The defendants filed a demurrer to plaintiff's petition, which the trial court sustained, and, upon plaintiff declining to amend his petition or plead further, the court entered judgment in favor of defendants, plaintiff appealing therefrom.

Plaintiff's petition, comprising two counts, omitting caption and signatures, is as follows:

"Plaintiff states:

"That the Farmers' Bank of Durham, of Durham, MO., was duly incorporated under the laws of the state of Missouri, on the ___ day of ___ 1905, and by its charter authorized to do a general banking business. That from and after the date of incorporation aforesaid said bank was engaged in the general banking business until the ___ day of ___, 1922, when, by order of the commissioner of finance of the state of Missouri, said bank was closed because of its failing circumstances and insolvent condition.

"That prior to the ___ day of ___, 1921, and thereafter until said Farmers' Bank of Durham was closed by order of the commissioner of finance of the state of Missouri, the defendants Eli Garkie, J. S. Shackleford; Chas. H. Mohr, I. N. Killebrew, Henry Gnuse, D. N. Hadfield, and William Zipsie were duly elected, qualified, and acting directors of said Farmers' Bank of Durham. That Henry Gnuse and I. N. Killebrew were president and vice president, respectively, of said bank. That the defendants had the management and control of the business and affairs of said bank. That on or about the ___ day of ___ 1921, said bank was in failing circumstances and in an insolvent condition and remained so, until the ___ day of ___, 1922, on which lastmentioned date said bank was closed as aforesaid.

"That, while said Farmers' Bank of Durham was in failing circumstances and in an insolvent condition, the defendants, well knowing the failing circumstances and the insolvent condition of said bank, on or about the ___ day of ___, 1922, received and assented to the reception by the officers and agents in charge of said Farmers' Bank of Durham a deposit or deposits from the plaintiff in the sum of $169.45. That at the time said Farmers' Bank of Durham was closed by order of the commissioner of finance of the state of Missouri of said deposit or deposits there remained to the credit of plaintiff in said Farmers' Bank of Durham, the sum of $67.99 which said sum of $67.99 was wholly lost to plaintiff.

"Wherefore plaintiff prays judgment for said sum of $67.99 together with 6 per cent. interest from the ___ day of ___, 1922, and for costs.

"II. Plaintiff states:

"That the Farmers' Bank of Durham, of Durham, Mo., was duly incorporated under the laws of the state of Missouri, on the ___ day of ___, 1905, and by its charter authorized to do a general banking business. That from and after the date of incorporation aforesaid, said bank was engaged in and doing a general banking business until the ___ day of ___, 1922, when by order of the commissioner of finance of the state of Missouri said bank was closed because of its failing circumstances and insolvent condition.

"That prior to the ___ day of ___, 1921, and thereafter, until said Farmers' Bank of Durham was closed by order of the commissioner of finance of the state of Missouri, the defendants Eli Garkie, J. S. Shackleford, Chas. H. Mohr, I. N. Killebrew, Henry Gnuse, D. N. Hadfield, and William Zipsie were duly elected, qualified, and acting directors of said Farmers' Bank of Durham. That Henry Gnuse and I. N. Killebrew were president and vice president, respectively, thereof. That the defendants had the management and control of the business and affairs of said bank. That on and after the ___ day of ___, 1922, said Farmers' Bank of Durham was in failing circumstances and in an insolvent condition, and remained so until the ___ day of ___, 1922, on which last-mentioned date said bank was closed as aforesaid. That the defendants had the direction, management, and control of the officers and agents in charge of said bank, and had the management and control of the business and financial affairs of said bank. That it was the duty of defendants as directors of said bank to conduct and to see that the officers and agents in charge and under them conducted the business and affairs of said bank in a careful and prudent manner; that defendants wholly disregarding their duties as directors of said Farmers' Bank of Durham, willfully, wrongfully, knowingly, negligently, and carelessly conducted and permitted the officers and agents in charge and under them to wrongfully, knowingly, willfully, negligently and carelessly conduct the business and affairs of said bank in this, to wit, knowingly permitted the officers and agents under them and in charge of said bank to willfully and wrongfully deplete, make way with, and appropriate the assets of said bank to their own use; permitted said officers and agents to remain in charge of said bank after knowing said officers and agents had willfully and wrongfully appropriated the assets of said bank to his own use; failed and neglected to remove said officers and agents; failed and neglected to take steps to recover the amounts so made away with and appropriated by such officer and agent.

"That defendants willfully, knowingly, wrongfully, negligently, and carelessly loaned and permitted the officers and agents under them in charge of said bank to loan large sums of money belonging to said bank to insolvent persons, without said loans being properly secured to said bank. That defendants willfully, knowingly, wrongfully, negligently, carelessly, and unlawfully permitted the officers and directors of said bank to become indebted to said bank for more than 10 per cent. of the capital and surplus of said bank in violation of law. That defendants willfully, negligently, carelessly, and unlawfully loaned and permitted the officers and agents under them, in charge of said bank, to loan to one person or individual more than 25 per cent. of the capital and surplus of said bank, in violation of law. That defendants, through the officers and agents under them, in charge of said bank permitted insolvent customers to become indebted to said bank by overdraft on said bank in large sums without any security therefor. That, by reasons of the unlawful, willful, negligent, and careless acts as aforesaid, said Farmers' Bank of Durham became insolvent and was by the commissioner of finance of the state of Missouri, closed on the ___ day of September, 1922, because of its insolvent condition.

"That defendants, as directors of said Farmers' Bank of Durham, willfully and negligently failed to perform their duties as such directors; failed and neglected to hold their regular monthly meetings, keep or cause to be kept proper and complete minutes of such meetings; failed and neglected to have the minutes of said meetings show the aggregate indebtedness and liability of each director, officer, and employé thereof; failed and neglected to examine the books and affairs of said bank and to perform many other duties which by law they were required to perform as such directors.

"That, while said bank was in such failing circumstances and insolvent condition, the defendants willfully and knowingly, with intent to deceive, inspire confidence in the financial stability, and to induce this plaintiff and the public in general, of which this plaintiff was a part, to deposit their money and funds in said Farmers' Bank of Durham, and to transact their business with said bank, in their sworn statements, which they were required to make to the banking department of the state of Missouri and publish in some newspaper in the county of Lewis, which they made and caused to be published from time to time, with the willful and fraudulent intent that such statements should be believed and relied upon as true by the public in general of which this plaintiff was a part; included in said statements a large amount of notes, purporting to be notes of solvent customers, which said notes were in fact notes of insolvent customers; included in said statements large overdraft due said bank purporting to be overdrafts by solvent customers, when in fact said overdrafts were due said bank from insolvent customers; included in said statements a large surplus, when in truth and in fact said bank had no surplus; and included other items as assets, purporting to be of considerable value, when in fact said items were of little or no value—all of which was well known to defendants at the time said statements were made and published or caused to be made and published.

"That the plaintiff, relying upon the representations and statements made by defendants, relying on and believing defendants to be prudent and careful business men, and believing them to be discharging their full duty as directors of said Farmers' Bank of Durham, and as officers of said bank, was induced by the unlawful and fraudulent conduct and statements of defendants, made and done as aforesaid, to deposit in said Farmers' Bank of Durham, on the ___ day of ___, 1922, and while said bank was insolvent and in failing circumstances, the sum of $169.45. That defendants well knew said bank to be insolvent and in failing circumstances. That plaintiff would not have made said deposit or deposits had he known the true condition of the...

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5 cases
  • Craig v. Stacy
    • United States
    • Missouri Supreme Court
    • May 27, 1932
    ...Hill, 155 Mo. 232, 55 S.W. 1091, 49 L.R.A. 323, 78 Am. St. Rep. 569; Stone v. Rottman, 183 Mo. 552, 82 S.W. 76; see, also, Kroeger v. Garkie (Mo. App.), 274 S.W. 478; 7 C.J. 569, sec. 177, p. 747, sec. 541; 3 R.C.L. 466, sec. 97, p. 470, sec. 99; Douglass v. Dawson (N.C.), 130 S.E. 195; U.S......
  • Corbett v. Lincoln Sav. & Loan Ass'n
    • United States
    • Missouri Court of Appeals
    • May 7, 1929
    ...commissioner refuses to act suit may be brought by the creditor or contract holder. Koch v. Mo. Lincoln Trust Co., 181 S.W. 44; Kroeger v. Garkie, 274 S.W. 478; White Pool, 272 S.W. 1021. (5) If the statute be construed to prevent the creditor or contract holder from maintaining suit, it is......
  • Corbett v. Lincoln Sav. And Loan Assn.
    • United States
    • Missouri Court of Appeals
    • May 7, 1929
    ...commissioner refuses to act suit may be brought by the creditor or contract holder. Koch v. Mo. Lincoln Trust Co., 181 S.W. 44; Kroeger v. Garkie, 274 S.W. 478; White v. Pool, 272 S.W. 1021. (5) If the statute be construed to prevent the creditor or contract holder from maintaining suit, it......
  • Drummond Co. v. St. Louis Coke & Foundry
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    • Missouri Supreme Court
    • January 31, 2006
    ...or fraudulent act, the relationship between a creditor and a corporation is that of contract, not one of trust. Kroeger v. Garkie, 274 S.W. 478, 480 (Mo.App.1925) (quoting Utley v. Hill, 155 Mo. 232, 55 S.W. 1091, 1098 (1900). See also Premier Bank v. Tierney, 114 F.Supp.2d 877, 886-87 (W.D......
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