National Bank of Commerce v. Shumway

• Decision Date: 08 July 1892
• Citation: 30 P. 411,49 Kan. 224
• Parties: THE NATIONAL BANK OF COMMERCE et al. v. R. B. SHUMWAY, as Assignee of the Bank of Lyons
• Court: Kansas Supreme Court

30 P. 411

49 Kan. 224

THE NATIONAL BANK OF COMMERCE et al. v. R. B. SHUMWAY, as Assignee of the Bank of Lyons

Supreme Court of Kansas

July 8, 1892

Original Proceeding in Mandamus.

ON the 16th day of September, 1891, in accordance with a resolution of a majority of the board of directors of the Bank of Lyons of Lyons, Rice county, the bank, through its president and secretary, executed and delivered to W. T. Nichols its general deed of assignment for the benefit of all its creditors. The deed of assignment was filed in the office of the register of deeds of Rice county. W. T. Nichols accepted the trust, and took possession of the property and assets of the bank, and held the same until the election of the general assignee, R. B. Shumway. He qualified as assignee, and immediately entered upon the discharge of the duties of his trust. Subsequently, the National Bank of Commerce, and other creditors, had their claims adjusted and allowed for large amounts, but, after the adjustment and allowance of these claims, Shumway, the assignee, without any good or sufficient reason, declined and refused to exhibit to the National Bank of Commerce and to other creditors the condition of the assets of the Bank of Lyons, and refuses to permit them to make any examination of the assets, books, records, etc. An alternative writ of mandamus was issued on April 29, 1892 requiring Shumway, as such assignee, to proceed to the discharge of his duties, and to compel him to exhibit to the creditors the condition of the assets, under the assignment and to permit the creditors to make an examination of the books, records, etc., or to show cause for his refusing so to do.

On May 5, 1892, R. B. Shumway, the assignee, filed his return to the alternative writ, claiming, among other things, that the deed of assignment was null and void, because no notice was given to all of the directors of the bank of the called meeting of the 16th of September, 1891, at which meeting the officers of the bank were directed to make the assignment, and also because the deed of assignment was never subsequently authorized, ratified or confirmed by any lawful meeting of the board of directors of the bank. To the return of the assignee, the plaintiffs filed a demurrer. Other facts are stated in the opinion herein, handed down during the session of the court in July, 1892.

Demurrer sustained.

Jones & Jones, and Elijah Robinson, for plaintiffs.

No brief on file.

A. M. Lasley, and C. F. Foley, for defendant.

No brief on file.

HORTON, C. J. All the Justices concurring.

OPINION

HORTON, C. J.:

The charter of the Bank of Lyons provided for seven directors, and those who had been elected directors were Bell, Porter, Deupree, Stiner, (all residents of the state,) Grey, Webb, and Slatten. Slatten lived in Missouri, and sold his stock in 1888 or 1889, and had nothing to do with the bank subsequent to that time. Grey was, at the time of the assignment, traveling in New Jersey, his whereabouts not being known. Webb lived on a farm, some distance from Bethany, in Harrison county, Missouri, and had not been in the state of Kansas or participated in the management of the bank since 1888. Bell, as president, and Porter, as cashier, had had the exclusive management of the affairs of the bank for two or three years, and this with the knowledge and presumably with the consent of the board of directors. The four resident directors, namely, Bell, the president, Porter, the cashier, Deupree, and Stiner, met together on the afternoon of the 16th of September, 1891, at the request of the cashier, for the purpose of discussing the condition of the bank and determining what should be done. The bank was then insolvent. Seeing that any further efforts to conduct the business of the bank would be futile, they unanimously adopted a resolution directing the president and secretary to make the deed of assignment, which they did, executing the same in due form and attesting it by the common seal of the corporation. No notice of the meeting was given to Webb, Grey, or Slatten, but both Webb and Grey subsequently participated in the meeting of creditors and the election of R. B. Shumway as assignee.

The principal question for determination in this case is, whether the deed of assignment executed by the president and secretary of the Bank of Lyons to R. B. Shumway for the benefit of its creditors...