Love v. Roebuck

• Decision Date: 12 October 1936
• Docket Number: 32232
• Citation: 177 Miss. 375,169 So. 827
• Court: Mississippi Supreme Court
• Parties: LOVE, SUPERINTENDENT OF BANKS, et al. v. ROEBUCK et al

169 So. 827

177 Miss. 375

LOVE, SUPERINTENDENT OF BANKS, et al. v. ROEBUCK et al

No. 32232

Supreme Court of Mississippi

October 12, 1936

Suggestion Of Error Overruled November 9, 1936.

(In Banc.)

1. BANKS AND BANKING.

Former state superintendent of banks and his liquidating agent who compromised claim against liquidating bank without court order, and upon wrtten consent of only part of stockholders, held liable for that portion of sum paid out which represented part payable to nonassenting stockholders and not liable to assenting stockholders, where all obligations of. liquidating bank had been satisfied, and stockholders were only remaining parties in interest.

2. BANKS AND BANKING.

Stockholders who assented to compromise of claim by liquidating agent for state superintendent of banks held bound by determination that they were not entitled to charge such items to superintendent and his agent, notwithstanding stockholders were not summoned in for hearing of exceptions to superintendent's account, since filing of accounts does not require new notice.

ETHRIDGE J., dissenting in part.

HON. A B. AMIS, SR., Chancellor.

APPEAL from the chancery court of Newton county HON. A. B. AMIS SR., Chancellor.

Proceeding in the matter of the liquidation of the Bank of Union wherein H. G. Graham had acted as liquidating agent, and J. S. Love as State Superintendent of Banks, filed his account, to which S. T. Roebuck, as liquidating agent, and another, filed exceptions. From the decree, J. S. Love and others appeal. Affirmed in part, reversed in part, and remanded, with directions.

Affirmed in part and reversed in part.

Flowers, Brown & Hester, of Jackson, or appellant, J. S. Love, Supt. of Banks.

A person innocent himself of fraud cannot hold property or an advantage gained for him by the fraud of another.

Planters Bank v. Neely, 7 H. 80, 40 Am. Dec. 51.

In deceit actions, while scienter must be alleged and proved, it is not necessary to prove that defendant knew the falsity of his representations; it being sufficient to show that they were made as of defendant's knowledge when in fact he had no knowledge, or when, because of his position, he should have known their truth or falsity.

Vincent v. Corbitt, 47 So. 641, 94 Miss. 46, 21 L.R.A. (N.S.) 85.

Fraud involves a breach of duty, trust, or confidence, and includes all acts, omissions, or concealments by which another is injured, or an undue and unconscientious advantage is taken.

Smith v. State, 107 Miss. 486, 65 So. 564.

To constitute fraud, it is unnecessary that a statement be made with the intention to deceive, if it is a statement of fact, or a statement purporting to be a fact, but not true as a matter of fact.

McNeer & Dodd v. Norfleet, 113 Miss. 611, 74 So. 577, Ann. Cas. 1918E, 436.

A bill of complaint was held to state a cause of suit for inducing plaintiff to accept notes indorsed to plaintiff without recourse in payment of price of property sold by plaintiff to defendants; the value of the notes having been fraudulently misrepresented.

Coast Realty & Colony Co. v. Security Trust Co., 79 So. 848, 118 Miss. 690.

Fraud consists of anything which is calculated to deceive, whether it be a single act or a combination of circumstances, or acts or words which amount to a suppression of the truth, or merely silence, or other artifice by which a person is deceived, but to constitute a ground for avoiding a sale of personal property, the seller must have been under obligation to speak, mere silence alone not being sufficient.

Salter v. Aviation Salvage Co., 129 Miss. 217, 91 So. 340, 26 A.L.R. 987.

If vendor's representation as to acreage of tract sold was false, action of deceit will lie, though representation was made in good faith.

Lundy v. Hazlett, 147 Miss. 808, 112 So. 591.

Fraud vitiates everything it enters into.

Hutson v. Miller, 148 Miss. 783, 114 So. 820; 12 R. C. L. 293, sec. 57.

While the settlement made between Graham and Peoples Bank of Union was made without court authority and against the advice of appellant Love, nevertheless, if Peoples Bank of Union had a valid claim against Bank of Union, in liquidation, and the settlement as made was for the best interest of the Bank of Union, in liquidation, and in accord with fairness and equity as between the two banks, credit should be allowed for the amount of the settlement in the final account of Love, Superintendent of Banks, and Graham, liquidating agent.

Woods v. Ridley, 27 Miss. 119; Tardy's Smith on Receivers, 1714.

We respectfully submit that the decree of the lower court should be reversed and the cause remanded for a new trial with proper directions to the lower court to permit the introduction of the evidence concerning the five thousand and forty-six dollars and seventy-five cent item and the allowance of proper credit for such amount thereof as the facts justify, and that the timber item should be reduced to the amount as shown by the testimony of Graham.

J. H. Currie, of Meridian, and Green, Green & Jackson, of Jackson, for appellants, Grady Graham and Peoples Bank.

Mary L. Cole, a stockholder, voluntarily, upon January 17, 1931, escaped double liability by her due under the statute, and specifically consented to that which she herein seeks to repudiate.

Where a stockholder recognizes the dissolution of a bank to obtain an advantage, he cannot later assert its invalidity.

7 C. J. 721; Wilde v. Oregon, etc., Bank, 59 Ore. 551, 117 P. 807; Broom's Legal Maxims, Volenti non fit injuria, page 395.

All causes of exception were vested in Union Bank and not assertible by succeeding receiver. The delivery having been made with the assurance of rectification in case of need, and the misrepresentations having developed, a stockholders' meeting was held whereat in January, 1931, that done by Graham was authorized, and from that date for nearly five years, the corporation therein acquiesced and held the notes to it delivered in virtue of the settlement made The corporation continued to exist as such.

3 Michie Banks & Banking, page 42, chapter 23.

The right to object was vested in the corporation.

Peach Co. v. Bonding & Surety Co., 279 Mo. 548; Freeman v. Winchester, 10 S. & M. 580.

The Peoples Bank having made the agreement is willing to stick by it, but if it is to be rescinded, then it will revive a right to rescind with a right to recover most substantial damages, but as stated, the corporation in whom the right to except was, acquiesced during four years, and having so done, the receiver has no higher rights, if he has any rights at all, which in the case of a receiver we expressly deny because he is not an interested party, and must be such before he may except.

2 Tardy's Smith on Receivers (2 Ed ) sec. 610, page 1709.

This contention does not mean that Graham, as a representative of the corporation, must not account, but his accounting is to be to the corporation and not to a receiver who has no standing as such.

The receiver having herein acted in good faith, that by him done being for the general welfare, no reason is stated in the exception for invalidation, and relief may not be had without a pleading whereon to predicate it.

53 C. J. 199; County v. Summers, 182 A. 279.

No judicial decree was requisite as corporate power of Union Bank was ample for that done.

Neely v. Planters National Bank, 48 F.2d 266; 3 Michie Banks & Banking, page 42, chapter 23; Earle v. Pennsylvania, 178 U.S. 449.

Liquidation of a bank through assumption by a solvent bank of liabilities, with a transfer of adequate assets is the preferred method for such proceedings as it avoids the expenses of liquidation, vouchsafes a more effective liquidation, and conserves the time of the court or other controversies.

Compare chapter 172, page 194, sec. 34, Laws Mississippi, 1918; Sec. 34, chapter 172, Laws 1922; Chapter 176, Laws 1924; Chapter 252, Laws 1926, sec. 1; Chapter 22, Laws 1930, sec. 4, page 25; Chapter 146, Laws 1934, sections 80, 82, 83, 90, 97, 100, 107.

7 C. J. 722; Wyman v. Wallace, 201 U.S. 230, 50 L.Ed. 738.

The Union Bank quit business; its directors resolved to liquidate; the statute vested power thus to do in them. In its exercise the stockholders have acquiesced; no one else may complain.

Sells v. Grocery Co., 72 Miss. 605; Overstreet v. Citizens Bank, 12 Okla. 383, 72 P. 379; First State Bank v. Lock, 113 Okla. 30, 237 P. 606.

Even if authorization were initially requisite, retention of consideration during five year period by those, if any, entitled to complain, operated as an estoppel.

Berry v. Broach, 65 Miss. 450; Bank v. Bank, 83 Miss. 610; Beecher v. Mill Co., 45 Mich. 103; Hardware Co. v. Phelan, 128 Pa. St. 110; Wood v. Water Works Co., 44 F. 146; Thomas V. R. R. Co., 104 Ill. 462; Barrett v. Pollark Co., 18 So. 620; Steel Works v. McKeever, 20 So. 88; Anderson v. Bank, 25 So. 528; Sells v. Grocery Co., 72 Miss. 605; Railroad v. Kittel, 52 F. 73; Ry. Co. v. Bridge Co., 131 U.S. 381; Martin v. Webb, 110 U.S. 7; Bank v. Perkins, 4 Bosw. 443; Davenport v. Stone, 104 Mich. 524, 62 N.W. 722; Ringling v. Kohn, 6 Mo.App. 333; Bank v. Stone, 106 Mich. 370; Caldwell v. Bank, 64 Barb. 342; Kelsey v. Bank, 69 Pa. St. 426; Wing v. Bank, 103 Mich. 565; Robinson v. Pealle, 20 Ga. 276; Bank v. Shumway, 49 Kan. 224; Jack v. Bank, 17 Okla. 430, 89 P. 220; McKinley v. Mining Co., 46 Wash. 162, 89 P. 496; First National Bank v. State Bank, 15 N.D. 594, 109 N.W. 65; Bell v. Glass Co., 106 Ky. 7, 50 S.W. 3; Blanchard v. Bank, 75 F. 253.

A bank cannot receive and retain the benefits arising from a contract made on its behalf by one of its officers or agents and at the same time repudiate the burden by denying his authority to act as its...