Sav. Bank of Hannibal v. Hunt

• Decision Date: 31 October 1880
• Citation: 72 Mo. 597
• Parties: THE SAVINGS BANK OF HANNIBAL, Plaintiff in Error, v. HUNT.
• Court: Missouri Supreme Court

72 Mo. 597

THE SAVINGS BANK OF HANNIBAL, Plaintiff in Error,

v.HUNT.

Supreme Court of Missouri.

October Term, 1880.

Error to Hannibal Court of Common Pleas.--HON. JOHN T. REDD, Judge.

AFFIRMED.

James Carr and J. L. Robards for plaintiff in error.

1. The bond was intended to secure the plaintiff in the faithful performance of the duties of the office of cashior so long as Hunt should hold that office. Sparks v. Farmers Bank, 9 Am. L. Reg. (N. S.) 365; Treasurers v. Lang, 2 Bailey (S. C.) 430; Daly v. Commonwealth, 75 Pa. St. 331; Oswald v. Mayor of Berwick, 5 H. L. Cases 856; Butler v. State, 20 Ind. 169; State v. Berg, 50 Ind. 496; Akers v. State, 8 Ind. 484; Spencer v. Champion, 9 Conn. 536; Thompson v. State, 37 Miss. 518; Middlesex Man. Co. v. Lawrence, 1 Allen 339; Dedham Bank v. Chickering, 3 Pick. 335; Mayor, etc., of Berwick v. Oswald, 3 El. & Bl. 653; Amherst Bank v.Root, 2 Met. 522; Placer Co. v. Dickerson, 45 Cal. 12; Chairman of Com. Schools v. Daniel, 6 Jones (N. C. L.) 444; Supervisors v. Kaime, 39 Wis. 474.

2. The bond is sufficient under the 3rd section of the 6th article of chapter 37 of Wagner's Statutes, page 330, to hold the surety bound, so long as there was no successor to Hunt, properly qualified. It expressly provides that the president, cashier and secretary “shall hold their office for one year, and until their successors are duly elected and qualified.” There was no successor ever elected and qualified by giving bond as required by the by-law. His election by the directors of the plaintiff in 1872, and again in 1873, did not vest him with the office. It was a mere offer on one side. It should have been accepted on the other side by qualifying as the by-law required. This never was done. State v. Lusk, 18 Mo. 333; State v. Auditor, 38 Mo. 192; State v. Hixon, 41 Mo. 211; State v. Jenkins, 43 Mo. 261; Commonwealth v. Hanley, 9 Barr 513; Butler v. State, 20 Ind. 169; State v. Berg, 50 Ind. 496.

3. The by-law requiring the cashier to give bond “conditioned for the faithful performance and discharge of the duties of his office,” was valid and binding upon the surety. The taking of the bond in question was only exercising the power conferred on the board of directors. Wag. Stat., § 3, p. 330. It was not necessary that the stockholders should, at a stockholders' meeting, called for that purpose, ordain and establish, or even ratify this by-law in order to give it validity.

Harrison & Foreman for defendant in error.

We think it clear that the sureties on the bond were only bound by its terms for the year 1871, for which said Hunt was elected, and for a reasonable length of time after his re-election in 1872 to enable him to give a new bond. This is the fullest extent to which the authorities go. But in this case the defalcation did not occur until after the second re-election, thus making a whole term intervene between the time for which the bond was given, and the one in which the defalcation occurred. Suppose some other person had been elected for the second year and served without giving bond, and then Hunt had been elected and served for the year 1873, and defaulted without a bond, it would not be claimed that the sureties in the bond in suit would be bound for such defalcation, and yet where would be the legal difference between the obligations of the sureties on the bond in the case at bar and the one supposed? Harris v. Babbitt, 4 Dill. 185; Moss v. State, 10 Mo. 338; Bigelow v. Bridge, 8 Mass. 275; Chelmsford Co. v. Demarest, 7 Gray 1; Inhabitants of Rochester v. Randall, 105 Mass. 295; s. c., 7 Am. 519 and note; Mayor, etc., of Rahway v. Crowell, 40 N. J. L. 207 ; s. c., 29 Am. 224; Citizens Loan Association v. Nugent, 40 N. J. L. 215; s. c., 29 Am. 230; Dover v. Twombly, 42 N. H. 59; Welch v. Seymour, 28 Conn. 387; Mutual Loan & Bldg. Asso. v. Price, 16 Fla. 204; s. c., 26 Am. 703.

HENRY, J.

This is a suit on a bond executed by William A. Hunt, as principal, and C. O. Godfrey and Josiah Hunt, as his securities. In January, 1871, William A. Hunt was appointed, by plaintiff's board of directors, cashier of the bank, for the term of one year, and until his successor should be duly elected and qualified. The bond was required, not by the act under which the company was incorporated, but by a by-law of the company. The penalty of the bond was $20,000, and the condition was for the faithful discharge of his duties by Hunt, as cashier.

The bond was silent as to the term of office, and as to the period of time for which the obligors were to be liable thereon. Hunt was a defaulter, and his defalcations occurred between January, 1872, and the 6th day of January, 1874, after the expiration of one year from the date of his first appointment. The answer of the administrator was a general denial, and Godfrey pleaded his discharge in bankruptcy. A jury was waived, and on a trial by the court, there was a verdict and judgment for defendants, from which plaintiff has appealed.

Except with respect to the appointment of a successor to Wm. A. Hunt, as cashier, after one year from the 3rd day of April, 1871, the allegations of the petition were proved as alleged, and on that point the evidence was to the effect, that in January, 1872, said Hunt was re-appointed cashier, and again in January, 1873, but never gave any bond as such, except the one in suit, and continued to act as such from the date of his first appointment until the 6th day of January, 1874. The instructions were numerous, but without inserting them, it may be stated briefly, that on the facts the court held that the securities were not liable, and that is the only question to be considered. Section 3 of the article in relation to savings banks, Wagner's Statutes, 330, under which plaintiff was incorporated, provides that: “The affairs and business of any such association shall be managed and controlled by a board of directors, not less than five nor more than thirteen in number, from whom there shall be designated by themselves a president, cashier and secretary, who shall hold their office for one year, and until their successors are duly elected and qualified.” No qualifications of cashier, except membership in the board are prescribed in that chapter, but they are to be found in the by-laws of the company.

1. SAVINGS BANKS: power to require cashier to give bond.

By the 6th clause of section 1, Wagner's Statutes, 289, every corporation has power to make by-laws, not inconsistent with existing law, for the management of its property, the regulating of its affairs and the transfer of its stock. The 4th by-law of the plaintiff was as follows: “The cashier shall be responsible for all the money, funds and valuables of the bank, and shall be custodian thereof, and shall give bond with security, in the sum of $20,000, to be approved by the board, conditioned for the faithful discharge of the duties of his office,” etc. This by-law is reasonable, and within the scope of the power conferred by section 1, supra.

2. CASHIER'S BOND: non-liability of sureties after reelection.

The doctrine now well settled in this State is, that an officer elected or appointed to hold for a definite period of time and until his successor shall be duly elected and qualified, holds his office for the specified term, and if no successor be elected or appointed at the expiration of the time, his term of office continues until such appointment or election, and that the time during which he holds, after that specified time has expired and until a successor is elected and qualified, is as much a part of his term of office as the preceding time. State v. Lusk, 18 Mo. 333; State v. The Auditor, 38 Mo. 193. The bond being silent on the subject, reference must be had to the law under which Hunt was appointed, to ascertain the liability of the sureties with respect to the...