Venner v. Cox

• Decision Date: 05 November 1895
• Citation: 35 S.W. 769
• Parties: VENNER v. COX.
• Court: Tennessee Supreme Court

35 S.W. 769

VENNER v. COX.

Court of Chancery Appeals of Tennessee.

November 5, 1895.

Appeal from Chancery court, Washington county; John P. Smith, Chancellor.

Bill by G. W. Venner against John I. Cox, receiver, to recover a certain sum, as a preferred creditor, out of the assets of the First National Bank of Johnson City. There was a decree for defendant, and complainant appeals. Affirmed.

Isaac Harr and Barrow Bros., for appellant. Faw & Cox, for appellee.

WILSON, J.

This bill was filed March 12, 1895, against Cox, receiver of the First National Bank of Johnson City, Tenn., to recover the sum of $1,800, as a preferred creditor, out of the assets of the insolvent bank, on the ground that he had been induced to allow his money to remain on deposit in said bank, when it was hopelessly insolvent, — he believing it to be entirely solvent, — on the false and fraudulent representations of its president and acting cashier. There was a demurrer to the bill, which was sustained, and the complainant appealed.

The facts averred in the bill are these: First. That said bank, prior to noon of November 12, 1894, had been doing a general banking business in the town of Johnson City, Tenn., when, under the order of the comptroller of the currency of the United States, its doors were closed, and its assets placed in the hands of a bank examiner, and that soon thereafter Cox was appointed its receiver. Second. That for months prior to its close it had been under the complete control and dominion of its president, J. E. Crandall, who was also a director thereof, and also acted as cashier, although Miss Shortridge was its nominal cashier. Third. That complainant had from January 1, 1894, down to its failure, been a depositor in said bank and at the time of its failure, November 7, 1894, had on deposit with it the sum of $1,957.70. Fourth. That November 7, 1894, hearing reports affecting the credit of said bank, he, to save himself from loss, went to said bank, and presented his personal check for $1,800 payable to himself, to Miss Shortridge, acting cashier, and demanded payment, and was informed that he would have to wait until Mr. Crandall, the president, returned from dinner. That he did wait, and when said Crandall returned he again presented his said check for $1,800, and demanded payment. Said check was passed through the cashier's window, and taken in hand by the president of the bank, Mr. Crandall, and examined by him, and recognized as a demand upon the bank, on account of his deposit, for the sum of $1,800. Fifth. That when Crandall examined the check he hesitated, and asked if New York exchange would answer, and was told that it would not. After some further conversation said Crandall asked him if he was in actual need of the money, and was told that he (complainant) could use the money in paying some debts, but that his particular reason for wanting it was that he had heard rumors in regard to the solvency of the bank. Sixth. That thereupon said Crandall gave him the most positive assurance that the bank was entirely solvent, and an eminently safe institution in which to leave his money. He showed him its last government report, its loans and discounts, and informed him of its surplus. In short, he made divers and sundry, and all sorts of, glowing statements to complainant as to the sound financial status of the concern, all of which were false and fraudulent, and known to be so by said Crandall at the time, and by these false and fraudulent representations he quieted the apprehensions of complainant, and induced him to destroy his said check, drawn by him and presented as aforesaid, and to let his money remain in said bank. Seventh. That but for said false and fraudulent statements, representations, and assurances of said Crandall, he would have pressed the payment of his check, and got his money. Eighth. That said bank was hopelessly and irretrievably insolvent on said November 7, 1894, and had been so, to the knowledge of its president, and unknown to complainant, as far back as January 1, 1894. Ninth. That by virtue of the false and fraudulent statements of said Crandall and the unlawful deception practiced upon him, the said bank did not become the owner of his money, and was not its owner after November 7, 1894, and that after November 7, 1894, it held the sum of $1,800 in trust for complainant. Tenth. That when his said check was presented, and when, by the false and fraudulent statements and assurances of its president, he was induced to recall or hold back, and tear up, his said check, the said bank...