McIlroy Banking Co. v. Dickson

• Court: Arkansas Supreme Court
• Writing for the Court: Bunn
• Citation: McIlroy Banking Co. v. Dickson, 50 S.W. 868, 66 Ark. 327 (Ark. 1899)
• Decision Date: 08 April 1899
• Parties: McILROY BANKING CO. v. DICKSON et al.

50 S.W. 868

McILROY BANKING CO. v. DICKSON et al.

Supreme Court of Arkansas.

April 8, 1899.

Cross appeals from Washington chancery court; Edward S. McDaniel, Chancellor.

Bill by the McIlroy Banking Company against Lelia Dickson and others. From a decree in part for each party, both appeal. Affirmed.

J. D. Walker, Walker & Walker, and O. W. Watkins, for appellant. L. W. Gregg and B. R. Davidson, for appellee.

BUNN, C. J.

This is a bill in equity against the widow, heir, and executrix of a deceased cashier of the plaintiff bank, and against his bondsmen as such cashier, and seeking to subject certain property of which he died seised to the satisfaction of such decree as might be rendered against his estate. Decree in part for plaintiff and in part for defendants, as will appear in the statement of facts and the opinion, and both parties appealed.

The findings of fact by the court were to the effect that the deceased was owing the bank, as shortage in his account, something over $18,000; that he had $3,500 worth of paid-up stock in the bank, and that this was subject to his said indebtedness, and was so appropriated; that the homestead of deceased was not bound for any of said shortage; that the claim was not authenticated, as required by statute, so as to authorize a judgment against the estate. The statute requires that all claims against estates of deceased persons, capable of being asserted either in a court of law or equity, shall be authenticated by affidavits of the claimants to the effect that the claims are just, and have not been paid, in whole or in part, as the case may be. Ryan v. Lemon, 7 Ark. 78; Bernie v. Imboden, 14 Ark. 237; Saunders v. Rudd, 21 Ark. 519; Walker v. Byer, 14 Ark. 247; Bennett v. Dawson, 18 Ark. 334; Alter v. Kinsworthy, 30 Ark. 756; Wilkerson v. Gordon, 48 Ark. 360, 3 S. W. 183. And this affidavit is necessary to authenticate a claim arising out of an alleged breach of trust. Green v. Brooks, 25 Ark. 318. The affidavit is necessary to authenticate the claim for the amount of a defalcation, like the one in suit. But there are exceptions to the rule, as in the cases of mortgages and the like, and it is contended by the plaintiff that its prayer to subject the bank stock and the homestead to the payment of this defalcation is properly among the exceptions. The statute gives the bank a lien on all stock of a debtor to the bank for the amount of his indebtedness; and not only so, but specifically provides for the enforcement of this lien. Sand. & H. Dig. §§ 1342, 1352-1354. And the law is even stronger in favor of the bank when we take into consideration the fact that the stockholder really has no power to control or dispose of his stock while so indebted, except by the consent of the bank; for no transfer of stock is available except it be made on the books of the bank. This being the case, there was no necessity for an authentication of the claim, in order to subject this stock to the payment of the debt pro tanto; for the bank, in effect, had the possession of the stock.

There is some uncertainty as to whether the plaintiff means to include the $1,801.50 expended by the deceased in erecting his residence, as his homestead, in the $18,000 defalcation decreed, or that it is a separate and additional misappropriation of its funds by the deceased; but we infer that it is a part of the former, as the decree for that amount seems to be for the balance of accounts generally. But this is really not material.

It is contended by plaintiff that this indebtedness of the deceased is for an express trust fund for which he has failed to account, and therefore, under section 3, art. 9, of the constitution, the homestead is...