State ex rel. Arndt v. Cox

• Decision Date: 21 May 1931
• Docket Number: 30169
• Citation: 38 S.W.2d 1079,327 Mo. 790
• Parties: The State ex rel. A. F. Arndt and Olivia Arndt v. Argus Cox et al., Judges of Springfield Court of Appeals
• Court: Missouri Supreme Court

38 S.W.2d 1079

327 Mo. 790

The State ex rel. A. F. Arndt and Olivia Arndt v. Argus Cox et al., Judges of Springfield Court of Appeals

No. 30169

Supreme Court of Missouri

May 21, 1931

Certiorari to Springfield Court of Appeals.

Writ quashed.

F. W Barrett for relator.

(1) The finding of the court in a law case is equivalent to a verdict by a jury, and if there is any evidence to support the same the appellate court will not interfere. Maxwell v Dunham, 297 S.W. 94. (2) Sec. 11764, R. S. 1919, makes the reception of a deposit, while a bank is insolvent or in failing condition, prima-facie evidence that the officer receiving or consenting to the reception of such deposit, knew of its insolvent or failing condition. White v. Poole, 272 S.W. 1028; State v. Salmon, 216 Mo. 525. (3) The good faith of the defendant and his honest belief in the bank's solvency is not a defense, when the evidence shows that the defendant knew the bank was in a failing condition. White v. Poole, 272 S.W. 1028; Utley v. Hill, 155 Mo. 232. Knowledge under the statute means what the defendant knew or should have reasonably known about the bank's condition, and may be inferred from facts and circumstances. State v. Darrah, 152 Mo. 522; Bank v. Hill, 148 Mo. 380. Insolvency under this section is inability to pay debts, regardless of the cause, in the usual and ordinary course of business. State v. Lively, 297 S.W. 80. That the bank owed $ 11,000 for several years, which was renewed from time to time by the defendant, is a fact which shows knowledge of insolvency. State v. Lively, 279 S.W. 76; White v. Poole, 272 S.W. 1028. Criticism of the bank's notes and debts by the Department of Finance in its reports and letters to the defendant shows guilty knowledge. State v. Salmon, 216 Mo. 525; State v. Lively, 279 S.W. 76.

Farrington & Curtis for respondents.

(1) To authorize a recovery of bank deposits by virtue of Secs. 11763, 11764, R. S. 1919, the proof must show actual knowledge of insolvency by the officer at the time the deposits were made. Akin v. Hull, 9 S.W.2d 688; Utley v. Hill, 155 Mo. 232. (2) Section 11764, does not provide that the failure of a bank makes a prima-facie showing of knowledge by the officer of the bank that the bank was insolvent when the deposits were made, but provides that proof of "the fact that such bank was so insolvent or in failing circumstances at the time of the reception of the deposit charged to have been so received, shall be prima-facie evidence of such knowledge," etc. Sec. 11764, R. S. 1919. (3) Sec. 3365, R. S. 1919, the criminal statute, which provides for prosecution of a bank officer who receives or assents to the reception of a deposit, knowing the bank at such time to be insolvent or in failing circumstances, differs from the civil statute, Section 11764, in that it provides, "that the failure of any such bank or banking institution or trust company or institution shall be prima-facie evidence of knowledge on the part of such officer or person that the same was insolvent or in failing circumstances when the money or property was received on deposit." (4) In a criminal prosecution, the state cannot make a case by a mere showing of a deposit and the subsequent closing of the bank; it must go further and show actual knowledge of insolvency, this because the presumption of innocence will overthrow the prima-facie case made by the statute. Under the civil statute, a mere showing of a deposit and subsequent failure of the bank does not make out a case for the plaintiff, because the plaintiff must go further and show insolvency at the time the deposit was made, hence the result is the same. Under both statutes mere proof of deposit and closing of bank does not make out a case and the opinion of the Court of Appeals as to this question is not in conflict with any opinion of this court or any appellate court. Utley v. Hill, 155 Mo. 232; State v. Buck, 120 Mo. 495; State v. Sanford, 297 S.W. 79. (5) On certiorari on ground of conflict of decisions, the Supreme Court will take the evidentiary facts in the opinion for the facts in the case. State ex rel. v. Reynolds, 233 S.W. 219. (6) On certiorari it is not the province of the Supreme Court to determine whether the Court of Appeals erred in its application of rules of law to the facts stated in its opinion, but only whether upon those facts it announced some conclusion of law contrary to the last previous ruling of the Supreme Court of the same or a similar state of facts. It is likewise not concerned with conflict which may exist between the courts of appeals. Neither is it within the scope of the Supreme Court's duty or prerogative to decide whether the holding of the Court of Appeals was right or wrong, such court having jurisdiction to decide wrong as well as right, nor is it material what the Supreme Court may think of the case as an original proposition. The judgment and opinion of the Court of Appeals can only be quashed when there is found to be a conflict as to the law between such opinion and an opinion of the Supreme Court on similar facts. State ex rel. Winter v. Trimble, 290 S.W. 115; State ex rel. Greer v. Cox, 274 S.W. 373; State ex rel. Bradley v. Trimble, 289 S.W. 922; State ex rel. Ins. Co. v. Trimble, 300 S.W. 812; State ex rel. Ins. Co. v. Cox, 9 S.W.2d 953; State ex rel. Ammonia Co. v. Daues, 10 S.W.2d 931; State ex rel. Utilities Co. v. Cox, 298 Mo. 427; State ex rel. Life Ins. Co. v. Allen, 243 S.W. 839; State ex rel. Ins. Co. v. Allen, 242 S.W. 77; State ex rel. Calhoun v. Reynolds, 233 S.W. 483; State ex rel. Packing Co. v. Reynolds, 287 Mo. 697; State ex rel. Seminary v. Ellison, 216 S.W. 967; State ex rel. Boatmen's Bank v. Reynolds, 218 S.W. 337.

Sturgis, C. Ferguson and Hyde, CC., concur.

OPINION

STURGIS

This is an original proceeding in this court by certiorari for the purpose of having this court quash the opinion and judgment of the Springfield Court of Appeals in the case of Arndt v. Frye, 20 S.W.2d 920. The case in question was a suit brought by plaintiffs Arndt as depositors in the failed Bank of Battlefield against the defendant William Frye, the president of the failed bank, to collect from him the amount of the deposit lost to such plaintiffs by reason of the bank's failure. That suit was brought and tried in the Circuit Court of Greene county and was based on the provisions of Sections 11763 and 11764, Revised Statutes 1919 (now Secs. 5381, 5382, R. S. 1929). The first one of these sections forbids the president or other officer of a state bank to receive or assent to the reception of a deposit in such bank "after he shall have knowledge of the fact that it is insolvent or in failing circumstances," and makes the officer violating such provisions of the statute individually responsible in a civil action for the deposit so received. The second one of the sections mentioned provides for the joint and several liability of the officers and agents of the bank charged with assenting to the reception of such deposit, with the further provision that "the fact that such bank was so insolvent or in failing circumstances at the time of the reception of the deposit charged to have been so received shall be prima-facie evidence of such knowledge and assent to such deposit on the part of the officer so charged therewith."

That case was tried in the circuit court on a proper petition and answer raising the issues of whether or not the bank was in fact insolvent or in failing circumstances at the time the deposit was received, and if so, whether the defendant had knowledge of such condition and assented to the deposit with such knowledge. The trial court, sitting as a jury, found for plaintiffs and held the defendant liable, but on an appeal duly taken the Springfield Court of Appeals reversed such judgment without remanding it, holding that under the law and facts proven the defendant was not liable. The decision of the Court of Appeals in this case of Arndt v. Frye, now called in question, reported in 20 S.W.2d 920, is referred to here instead of copying the same in full. In the present proceeding the relators are the plaintiffs in that suit and the respondents are the honorable judges of the Court of Appeals, whose opinion and judgment are here for review.

The relators do not controvert the correctness of the rule that in certiorari cases calling in question a decision of the Court of Appeals as being in conflict with a controlling decision of this court, this court in such review will treat as correct the evidentiary facts as found and stated by the Court of Appeals and will not search out the record filed in the Court of Appeals to ascertain if the evidentiary facts are correctly stated in the opinion. State ex rel. v. Reynolds, 289 Mo. 479, 233 S.W. 219, where the court said: "Under our rule, we take the evidentiary facts in the opinion for the facts in the case."

Without going into lengthy detail, we will say that the evidence shows that the Bank of Battlefield was a small country bank with a capital of $ 10,000. The bank failed and went into the hands of the Commissioner of Finance on August 25, 1925. Roy Neff was cashier, in active charge, and tended to all the detail business of the bank, including keeping the books making the financial statements, etc. The board of directors, of which defendant Frye was president, met once a month, but did little more than review the loans made by the cashier. Defendant Frye was a well-to-do farmer, owned five shares of stock in the bank, was its president, but was at the bank only occasionally, took no part in its active management, and was without knowledge of bookkeeping and had no experience in active banking. He was one of the largest depositors when the bank failed and had recently...