Love v. Robinson

• Decision Date: 09 November 1931
• Docket Number: 29563
• Citation: 137 So. 499,161 Miss. 585
• Court: Mississippi Supreme Court
• Parties: LOVE, SUPERINTENDENT OF BANKS, v. ROBINSON et al

137 So. 499

161 Miss. 585

LOVE, SUPERINTENDENT OF BANKS, v. ROBINSON et al

No. 29563

Supreme Court of Mississippi

November 9, 1931

Division B

1 SUBROGATION.

One having definite managerial responsibility, who makes payment of enforceable demands against estate being administered, may be entitled to subrogation.

2 SUBROGATION. Superintendent of banks advancing amount of stockholder's statutory liability, for purpose of paying insolvent bank's depositors without delay, held subrogated to depositors' rights (Code 1930, section 3792).

The superintendent of banks should be allowed subrogation to the claims of the depositors against stockholders' statutory liability, inasmuch as superintendent is under managerial duty to collect assets of insolvent bank as speedily as possible, including statutory stockholders' liability when other assets are insufficient, and since it is also his duty to pay depositors pro rata as rapidly as good management will permit and to draw on depositors' guaranty fund if necessary under Code 1930, section 3792.

3 SUBROGATION.

That superintendent of banks may have violated law in paying depositors of insolvent bank from guaranty fund, should not prevent reimbursement (Code 1930, section 3792).

4. EQUITY.

Officer's suit for reimbursement of public fund should not be defeated because of unclean hands, where delinquencies had no injurious consequences.

5. EQUITY.

In suit by superintendent of banks against stockholders, objection that money advanced to pay bank's depositors was taken illegally must be raised by special demurrer (Code 1930, section 3792).

HON. R. W. CUTRER, Chancellor.

APPEAL from chancery court of Adams county HON. R. W. CUTRER, Chancellor.

Suit by J. S. Love, Superintendent of Banks, against E. B. Robinson and others. From an order sustaining a demurrer to the bill, plaintiff appeals. Reversed and remanded. See, also, 137 So. 501.

Reversed and remanded.

F. W. Bradshaw and Flowers, Brown & Hester, all of Jackson, and Brandon & Brandon, of Natchez, for appellant.

The right to collect the double liability of stockholders of failed banks, under section 3815 of the Code of 1930, accrues when it becomes reasonably apparent that the assets of the failed bank will be insufficient to pay the depositors in full, and the liability under this statute is primary and not secondary.

Pate v. Bank of Newton, 116 Miss. 666, 77 So. 601; Bank Examiners v. Grenada Bank, 136 Miss. 142, 99 So. 903; Kent v. Love, 141 Miss. 523, 106 So. 772; Abbey v. Delta Bank & Trust Co., 139 Miss. 36, 103 So. 801.

Whenever the superintendent shall have paid any dividend to the depositors of any failed bank out of the bank depositors guaranty fund, then all claims and rights of action of such depositors so paid shall revert to the superintendent for the benefit of said bank depositors' guaranty fund, until such fund shall have been fully reimbursed for payments made on account of such failed bank, with interest at four per cent per annum.

Sec. 3792, Code 1930.

The State Banking Department, upon making payment to city after failure of municipal depository, was subrogated to the rights of the city against the depository bond and sureties.

Perkins v. State, 130 Miss. 512, 94 So. 460.

The doctrine of subrogation is the offspring of natural justice, and courts should rather incline to extend than to restrict the operation of a principle so elevated and pure. It applies, in general, wherever any person, other than a mere volunteer pays a debt or demand which in equity or in good conscience should have been satisfied by another, or where a liability of one person is discharged out of the fund belonging to another, and where one person is compelled for his own protection, or that of some interest which he represents, to pay a debt for which another is primarily liable, or wherever a denial of the right would be contrary to equity and good conscience. And "whenever a party has such an interest in property as makes it incumbent on him to get in an outstanding claim or equity for its protection, good conscience dictates that he shall have all the rights which the holder of the equity had."

Staples v. Fox, 45 Miss. 667; Robinson v. Sullivan, 102 Miss. 581, 59 So. 846; Prestridge v. Lazar, 132 Miss. 168, 95 So. 837; Grenada Bank v. Young, 139 Miss. 448, 104 So. 146.

The Superintendent of Banks, in making the fifty thousand dollars advancement to pay the depositors of the Bank of Commerce, was not a volunteer. He was not a volunteer, but was officially in charge of the liquidation of the affairs of the bank, charged with the duty under the banking laws to liquidate the affairs of the bank so as to pay the depositors thereof in full, if possible, and save any balance for the benefit of the stockholders. On principles of natural right and equity, since he has discharged an obligation to the depositors which would otherwise have had to be discharged by the appellees, should not the Superintendent of Banks be subrogated to the rights of the depositors as against the stockholders.

Jones & Stockett, of Woodville, for appellees.

Two separate funds are created, the first being a maintenance fund and to be used solely for the maintenance of the State Banking Department, and the second, being a guaranty fund and maintained solely for the benefit of depositors of failed, guaranteed banks. Over neither of these funds has the appellant the exclusive charge and control; each of these funds shall be deposited in and held by the state treasury, and no money can be paid out of either except in the manner and for the purposes authorized by the statute.

Sections 3783, 3791, Code 1930.

This alleged advance of fifty thousand dollars could not have been advanced legally, either from the maintenance fund or the guaranty fund.

Depositors in failed banks should be paid out of the guaranty fund in order of liquidation; and if the guaranty fund should not be sufficient to pay all guaranteed deposits then the Superintendent of Banks should pay depositors pro rata in order of liquidation.

Sec. 3792, Code of 1930.

Section 3815, Code 1930, is in derogation of the common law, it is in effect a penal statute and must be strictly construed.

Mellott v. Love, 152 Miss. 860, 119 So. 913.

The depositors have been paid in full, the state cares everything that the salutary principles of public policy embodied in the banking laws of the State shall be faithfully and fearlessly carried out, so as to prevent graft of every sort, misapplication of the funds of the banking department, diversion of the guaranty fund, or undue preference of some depositors and creditors, and is keenly interested in securing the honest, faithful, legal and clean administration of the affairs of the banking department and of failed banks of the State.

Noxubee County Hardware Co. v. City of Macon, 90 Miss. 636.

He who seeks equity must do equity, and, also, he who comes into equity must come with clean hands. The latter maxim is much stronger and much more efficient in its operation. It says that "Whenever a party, who, as actor, seeks to set the judicial machinery in motion and obtain some remedy, has violated conscience or good faith or other equitable principles in its prior conduct, then the doors of the court will be shut against him in limine; the court will refuse to interfere in his behalf to acknowledge his right or to award him any remedy."

Moss v. Miss. Livestock Sanitary Board, 154 Miss. 765, 783.

The maxim that he who comes into equity must come with clean hands is one of general application and equity will not lend its aid in securing to the litigant rights, where the litigant complainant has not performed or discharged the duties required by law, but would leave the litigant as it finds her.

4 A. L. R. 1 to 44; Mullins v. Taylor, 132 Miss. 551, 97 So. 5.

Subrogation applies whenever any person, other than a mere volunteer pays a debt or demand which in equity or good conscience should have been satisfied by another, or when one person finds it necessary for his own protection...