Thompson v. Greeley

Decision Date02 December 1891
Citation107 Mo. 577,17 S.W. 962
CourtMissouri Supreme Court
PartiesTHOMPSON v. GREELEY et al.<SMALL><SUP>1</SUP></SMALL>

Appeal from circuit court, Adair county; ANDREW ELLISON, Judge.

Action by William H. Thompson, receiver of the Provident Savings Bank, against Charles B. Greeley, William E. Guy, and others, to enforce defendants' liability for violation of Rev. St. 1879, § 916, in loaning to the Anchor Milling Company money in excess of 25 per cent. of its capital stock. Defendants obtained judgment, and plaintiff appeals. Reversed.

Boyle, Adams & McKeighan, for appellant. Hough, Overall & Judson, for respondents.

MACFARLANE, J.

This suit was commenced in the circuit court of the city of St. Louis, and on application of defendants was transferred to the circuit court of Adair county by change of venue. The petition stated, in substance, the following facts: On the 21st day of January, 1884, the Provident Savings Bank was incorporated as a bank of deposit and discount under the banking and incorporation laws of the state of Missouri with a capital stock of $200,000, $191,000 of which had been paid in. That the bank commenced business under its charter, and continued the same until about July 14, 1886, when, in a suit pending in the circuit court of the city of St. Louis, in which one Carlos S. Greeley was plaintiff and the said bank and its directors and officers were the defendants, the plaintiff, William H. Thompson, was, by the judgment and consideration of said court, duly made and given, appointed temporary receiver of the property, effects, and demands of every kind and description of said bank. That at the October term, 1886, of said court, to-wit, October 7, 1886, by the final decree and judgment of said court in said cause, duly given and made, the said plaintiff was continued as receiver as aforesaid, and the title to the property of said bank, real and personal, and all claims and demands whatsoever belonging to it, were by said decree and judgment vested in said plaintiff, as receiver, as aforesaid, with directions to proceed with all convenient speed to collect all sums of money due said bank, and to sell and convert into money all of the real estate and other assets and property of said bank, for the benefit of the creditors of said bank whose claims might be allowed by the said court in said proceedings, and for the benefit of said stockholders, after payment of debts. Said directors and officers of said bank were by said judgment and decree enjoined and restrained from exercising any control over the assets of said bank, and were directed to deliver the same to the receiver. That said decree and judgment also provided that said plaintiff in his said capacity should have liberty to apply to the court for further instructions. That said court, in said case, on, to-wit, the 30th day of November, 1887, on application made to it by said plaintiff for instructions with reference to the matters hereinafter set forth, enlarged said decree and judgment so as specifically to invest this plaintiff with the cause of action thereinafter set forth, which, as alleged, had accrued to said bank before July 14, 1886, against said defendants, and directed this plaintiff to bring a suit or suits at law to enforce the demands thereinafter set forth. That the said receiver entered upon the duties of his office, and was duly qualified, and that there would not be enough money realized to pay the demands of the creditors allowed by said bank by at least $100,000. That before the incorporation of said bank there had been incorporated under the laws of the state of Missouri another banking corporation under the name of the "Provident Savings Institution," which was also a bank of deposit and discount, and which had been and was in business long before said 25th day of January, — the day of the incorporation of the said Provident Savings Bank. That the charter of the Provident Savings Institution was about to expire, whereupon said Provident Savings Bank was organized to purchase the property and effects of the said Provident Savings Institution. That in pursuance of said purpose the said Provident Savings Bank did on the 24th day of January, 1884, purchase the assets and property of every kind and description of the said Provident Savings Institution, and did take possession of and ever after enjoyed the same. That at the date of said sale and purchase the Anchor Milling Company was a corporation, formed to manufacture and sell flour in the city of St. Louis, and was a customer of, and kept an account with, the said Provident Savings Institution in the sum of $79,429.24 in various notes, unsecured by any collateral security or by any deed of trust or mortgage, which indebtedness was for money loaned and advanced by said Provident Savings Institution to said Anchor Milling Company; and likewise that said Anchor Milling Company was indebted at said date in the further sum of $10,569.74 by way of overdraft on its account for money loaned and advanced to it by said Provident Savings Institution, likewise unsecured by any collateral security, or by any deed of trust or mortgage, which said notes and overdraft account were part of said purchase by said Provident Savings Bank, and were transferred and delivered to it by said Provident Savings Institution. That ever afterwards said Anchor Milling Company recognized said Provident Savings Bank as its creditor with respect to said indebtedness, and paid interest to it on said notes down to July 14, 1886, — the date when the plaintiff herein was appointed receiver of said Provident Savings Bank. That said Provident Savings Bank, in said purchase of said notes and overdraft account, was in all things moved, controlled, and directed by its then board of directors, namely, the said defendants and two other directors, James S. Garland and Almon B. Thompson, who were at the time of the bringing of this suit out of the jurisdiction of this court. One of the directors, F. W. Kefferstein, had departed this life, and his legal representatives were made defendants. That when the said plaintiff, as receiver, took possession of the property and effects of the said Provident Savings Bank there remained on hand and unpaid of said notes so purchased three notes, namely: A note for $35,000, dated March 18, 1882, executed by said Anchor Milling Company, payable on demand, to said Provident Savings Institution; a note for $25,000, dated July 16, 1883, executed by said Anchor Milling Company to said Provident Savings Institution, payable on demand; also a note for $5,000, dated October 6, 1883, executed by said Anchor Milling Company, payable on demand, to said Provident Savings Institution. That the board of directors of said Provident Savings Bank, composed partly of the said respondents, on, to-wit, March 6, 1885, acting for and in behalf of said bank at the time when said Anchor Milling Company was indebted to the said Provident Savings Bank on said three notes aggregating $65,000, and on an overdraft on its bank-account for $37,072.11, permitted said Anchor Milling Company to become indebted to it, the said Provident Savings Bank, in the sum of $35,000 on a certain promissory note for that amount; the consideration of said note being money loaned by said bank to said milling company on or about the date thereof, through the action of the board of directors composed as aforesaid. And said note and money loaned as a consideration thereof was so loaned and advanced without a collateral security or deed of trust or mortgage upon real estate or personal property assessed or assessable at a valuation in excess of 10 per cent. of said loan and note above said limitation. That when the property and effects of said bank came into the hands of said plaintiff as receiver said note was a part of the assets, wholly unpaid, except as to interest thereon; and that said plaintiff had been unable and would be unable to collect anything on account of said note and indebtedness, the said Anchor Milling Company having become wholly insolvent, with no property of any kind out of which said note or indebtedness could be made; so that said note and money loaned as a consideration thereof were wholly lost to said bank and said plaintiff as receiver. That said defendants, directors as aforesaid, through and by their said action with respect to the said loan and indebtedness evidenced by said note, did willfully and knowingly violate the laws of the state of Missouri constituting its charter, and said directors and said bank, through their action, did thereby directly and indirectly loan to said Anchor Milling Company, and suffer and permit it to become indebted to said bank in a sum to the extent of said note, to-wit, $35,000, in excess of 25 per cent. of the capital stock of the bank actually...

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