Merch.s Bank v. Jeffries

• Decision Date: 21 April 1888
• Citation: 21 W.Va. 504
• Court: West Virginia Supreme Court
• Parties: Merchants Bank v. Jeffries, Am'x.

21 W.Va. 504

Merchants Bank

v.Jeffries, Am'x.

Supreme Court of Appeals of West Virginia.

Submitted January 25, 1883

Decided April 21, 1888.

1. The cashier of a bank, intrusted with the control and custody of its funds, will in a court of equity be held as a trustee for said bank and may be sued by it in such court, and compelled to account for and pay any loss sustained by it, which was caused by any negligence or wrongful conversion or by any misapplication or use of any of its funds by such cashier in violation of the duties of his said trust, (p. 507.)

2. Where a bill filed by a bank against its cashier for a settlement of his accounts as such only alleges, that the defendant was such cashier; "that during his term as cashier he lent sundry sums of money to sundry irresponsible persons without the consent of the board of directors of said bank, for which lie is liable personally; and that the books and papers and cash-items show a large deficiency in the assets of said bank during the said cashier's term" of office; and said bill contains no averments, that said bank sustained any loss by such unauthorized loans; or that the moneys so lent have not been repaid; or that said deficiency in its assets was caused by any act or negligence of such cashier, it is clearly insufficient; and a demurrer thereto ought to be sustained, because it presents no cause of action against said defendant, (p. 508.)

Appeal from and supersedeas to a, decree of the circuit court of the county of Kanawha, rendered on the 9th day ot January, 1878, in a cause in said court then pending, wherein the Merchants Bank of Charleston was plaintiff, and Marie L. Jeffries, administratrix of George Jeffries, deceased, was defendant, allowed upon the petition of said Jeffries.

Hon. Homer A. Holt, judge of the eighth judicial circuit, rendered the decree appealed from.

Woods, Judge, furnishes the following statement of the case:

This was a bill filed in the circuit court of Kanawha county against George Jeffries by the Merchants Bank of Charleston, which after excluding the caption thereof was in the following words; "That several years ago, said defendant was appoined its cashier, and entered upon the discharge oi his duties as such; that he was requested and required to give bond as such cashier as required by law, but failed to do so; that during the time he was such cashier, he lent sundry sums of money of said bank funds to sundry irresponsible persons without the consent of the board of directors for which he is personally liable; that the books and papers and cash items show a large deficiency in the assets of the bank during his term as cashier;" and then " prays that these matters he enquired into by a commissioner; that he be held liable therefor, that he be decreed to pay the same," and for general relief, &c. At August rules, 1872, the bill was taken for confessed; said Jeffries died, and at the June term of said court, 1873, his death was suggested, and the cause was then revived against Marie L. Jeffries, wdio qualified as his administratrix, who thereupon appeared and demurred to said bill and assigned tbe following causes of demurred:

"1st, A court of equity has no jurisdiction for any misfeasance committed by George Jeffries as cashier of the Merchants bank.

"2d, The complainant's bill is too vague and indefinite.

"3d. It does not give the names of the parties to whom Jeffries unlawfully loaned money, the amount of the money loaned nor the date of the loan.

"4th, It does not point out the items of deficiency in the books of the bank.

"5th. The bill gives no notice by which & defense could be made, nor would the defendant be protected by the record from another suit for the same subject matter.

"6th. Courts of equity do not take cognizanze of torts.

"7th. Because tbe accounts are all on one side and no discovery is sought or required."

The court overruled the demurrer and referred the cause to a commissioner to take and report an account showing the amount loaned out or disposed of to irresponsible persons by said Jeffries, while acting as such cashier; 2d. Any other loss, which the said plaintiff has sustained by the unauthorized acts of said Jeffries in misappropriating the plaintiff's funds; 3d. Any other pertinent matter, &c.

A report was made by the commissioner, to whom this cause was referred, which was excepted to by both parties, as appears by the final decree; neither the commissioner's report nor the exceptions thereto nor any of the testimony taken in the case appears in this record.

On the 9th of January, 1878, the said court rendered a final decree in said cause in favor of said plaintiff for nine hundred and sixty-nine dollars and thirty-seven cents with interest and costs against the said administratrix, out of the assets in her hands to be administered.

From this decree the said administratrix obtained an appeal and supersedeas to this Court.

A. Biirlew for appellant cited the following authorities: Mitt. & Tyl. PI. 204; Id. 305, 306 and notes; Story Eq. Juris. §§ 451, 459; Id. § 359; Towle v. In treason, 5 Pet.

J. H. & J. F. Brown for appellee cited the following authorities: 2 Story Eq. Juris. §§ 462, 463; 4 Leigh 223; 19 Gratt. 62; 21 Gratt. 263; 31 Gratt. 212.

Payne $ Green, for appellee, cited the following authorities: 1 Barton Chy. Pr. 67; 19 Gratt, 62; 9 Jur.N. S. 1124: 11 Jur. N. S. 215*-Story Eq. Juris. § 459 a; 21 Gratt. 263; 31 Gratt. 212; 4 Leigh 223; 15 W. Va. 547.

Woods, Judge, announced the opinion of the Court:

As neither the report of said eomnissioner, nor the evidence supporting the same, nor any of the exceptions thereto, nor any evidence taken in the progress of tbe cause appears in this record, the court cannot determine, whether the said exceptions ought to have been sustained or not; but as all things done by the court are presumed to be rightly done, until the contrary is made to appear, it must in the absence of such proof be presumed, that the said exceptions to said commissioner's report were rightly disposed of. Callaghan v. Kippers, 7 Leigh 608; Harris v. Lewis, 5 W. Va. 575. In considering the questions of law presented by the defendant's demurrer to the plaintiff's bill it will be well to examine the grounds, upon which courts of equity have assumed to exercise jurisdiction over matters of account. A court of equity is said to have "jurisdiction in cases of rights recognized and protected by the municipal jurisprudence, where a plain, adequate and complete remedy cannot be had in the courts of common law." Story's Eq. Juris. § 33. One of the most important methods of equity is, that it addresses itself to the conscience of the defendant and requires him to answer upon his oath the matters of fact stated in the bill, if they be within his knowledge; and he is compelled to give a full account of all such facts with all their circumstances, without evasion or equivocation. (Id. 31.) And the right of a party to the aid of a court of equity, to obtain from a defendant a discovery of the facts within his knowledge, necessary to sustain the plaintiff's demand against him, is of itself the source of jurisdiction in many cases, not otherwise cognizable therein; for it is...