Warnock v. Fogle

• Citation: 186 N.E. 889,97 Ind.App. 357
• Decision Date: 19 September 1933
• Docket Number: No. 14857.,14857.
• Parties: WARNOCK v. FOGLE.
• Court: Court of Appeals of Indiana

97 Ind.App. 357

186 N.E. 889

WARNOCK

v.FOGLE.

No. 14857.

Appellate Court of Indiana, in Banc.

Sept. 19, 1933.

Appeal from Jay Circuit Court; Frank Gillespie, Judge.

Action by James L. Fogle against William Henan Warnock and others. From a judgment in favor of the plaintiff, the defendant named appeals.

Judgment affirmed.

Jacob F. Denney, of Fort Recovery, Ohio, for appellant.

James J. Moran and James R. Fleming, both of Portland, for appellee

CURTIS, Judge.

This was an action by the appellee, for himself and all others similarly situated, against the appellant and seventeen other stockholders of the Farmers' & Merchants' State Bank of Geneva, Ind., which was in the hands of a receiver, to recover what is commonly known as the double liability of stockholders in a banking institution under the Constitution of the state of Indiana, on the ground that the assets were insufficient to discharge the indebtedness thereof. The appellee alleged that he and the others for whom he brought the action were unpaid creditors.

The complaint was in one paragraph. To this complaint the appellant, together with the seventeen other defendants, filed a separate and several partial answer in two paragraphs. The first paragraph of answer admitted all of the allegations of the complaint, but by way of confession and avoidance allegedin substance that, at the time said bank was closed and before any receiver was appointed, the banking commissioner of Indiana, in conjunction with the officers and directors of said defunct institution, levied an assessment on the stockholders of said bank of 60 per cent. of the par value of the capital stock of each of said stockholders for the purpose of restoring the capital stock of said bank which had been partially dissipated, and to pay the debts and liabilities of said institution, and each of the said stockholders, including appellant, paid to the cashier of said defunct bank 60 per cent. of the par value of their said stock.

That said money so paid to said cashier was by him applied to the discharge of debts and obligations owed by said bank. That appellant admits owing the 40 per cent. of said capital stock and offers to confess judgment therefor, together with costs and accruing costs.

The second paragraph of answer set up the same facts as the first, except that it alleges that, instead of applying said money so paid in to the payment of said obligations of said bank, it charges that, in violation of said trust, the officers of said bank diverted the same and converted it to the purpose of running and still further operating said bank.

To these answers, the appellee replied in general denial.

The cause was submitted for trial to a jury, who returned a verdict against the appellant in the sum of $714.30. Judgment was entered upon the verdict. The appellant filed a motion for a new trial, which was overruled, and an exception taken and this appeal prayed and perfected. The only error assigned and relied upon is the ruling of the court on said motion.

The causes stated in the motion for a new trial are: That the verdict of the jury is contrary to law; that it is not sustained by sufficient evidence; that there is error in the amount of recovery, in that it is too large; that the court erred in giving to the jury of its own motion instruction No. 1, and in refusing to give instruction No. 1 requested by the defendant. The appellant in his brief says that each of the causes in the motion for a new trial raises the same question, and he treats them as one. They will be so considered by the court. The instruction given by the trial court and referred to in the motion for a new trial as instruction No. 1 given by the court on its own motion was a peremptory instruction to the jury to return a verdict in favor of the appellee. The appellant's instruction which was refused was based upon his theory that he was entitled to a credit of 60 per cent. of his liability in accordance with the facts set up in his said answer above abstracted.

The following facts were stipulated:

“No. 1. That the Farmers and Merchants State Bank of Geneva, Indiana was organized as a banking corporation under the laws of the State of Indiana several years prior to Nov. 20, 1928.

“No 2. That on Nov. 13, 1928, it closed its doors and ceased to transact business on account of its insolvency.

“No. 3. That on account of its insolvency, it was placed in the hands of a receiver on Nov. 20th, 1928, and has ever since been and now is in the hands of a receiver for liquidation, and is in the process of liquidation.

“No. 4. That at the time it closed its doors for liquidation, each of the answering defendants in his cause were the holders and owners of the number of shares of the capital stock as set forth in the plaintiff's complaint, and of the par value as mentioned therein.

“No. 5. That there were a great number of depositors and customers who were the owners of checking accounts and certificates of deposit against said banking institution, at the time it closed its doors for liquidation and that they have been paid the sum of 58% of their claims and that said banking institution does not have sufficient assets out of which to discharge its indebtedness, in the event all of the stockholders are required to pay an amount equal to the par value of their stock.

“No. 6. That the amount still due the creditors of said banking institution is approximately $85,000.00. That the plaintiff is one of the said creditors of said banking institution to the amount of approximately $2100.00 and that he sues for numerous other creditors of said banking institution...