69 Tenn. 101 | Tenn. | 1878
delivered the opinion of the court.
On the 1st of March, 1867, John R. Branner, as President of the East Tennessee and Virginia Railroad Company, loaned to his brother, the complainant, G. M. Branner, ten bonds of the State of Tennessee for $1,000 each, and complainant thereupon acknowledged in writing that he had “ borrowed of the E. T. & V. R. R. Co.” the said bonds, describing them as being “new issue bonds, issued under act of December 10, 1866,” and promising “to return them when called for.” John R. Branner died in February, 1869, having continued to be the president of the
The co-executors, in their answer, say that shortly after their qualification one of them, B. M. Branner, in examining the accounts of the testator with thn
The railroad company says that John R. Branner loaned the ten bonds to complainant, who executed therefor his obligation as above. It insists that John R. Branner, as its president, had no right or power to loan the bonds, and that in so doing he and the complainant were guilty of a conversion, and became jointly liable for the bonds. It knows nothing of the alleged payment by the complainant to John R. Branner, and says that the loan has never been repaid to the company. It concedes that the whole matter should be settled in one suit, and to this end files its answer as a cross-bill, and asks that the complainant and the executors of John R. Branner “be held jointly liable for the value of said bonds, and interest.”
It was agreed by the parties that the original bill and the answer of the co-executors thereto should be taken as answers to the cross-bill.
The deposition of G. M. Branner was taken on his own behalf, in which he states that the bonds were loaned to him by John R. Branner as president of the railroad company, and details the circumstances which led to the payment of the bonds to John R. Branner in New York, and deposes to the payment as alleged in his bill. There is testimony sustaining him in regard to the circumstances preceding the al
The original bill recognizes the company’s right to have satisfaction for its bonds, while it seeks to establish the payment to John B.. Branner. The co-executors, in their answer, recognize the fact that the object of the bill is to adjust the equities between the brothers, and admit the liability of their testator’s estate if the payment claimed is established. Without considering the rights of the estate as prejudiced by these admissions, it is clear that no issue is made by the pleadings touching the property of the railroad in the bonds borrowed, and the fact that the transaction was originally made between the brothers. The testimony of G. M. Branner is, moreover, clear upon these points, and is competent as between the company and the executors.
In this view the transaction was unauthorized, not merely because of the purposes impressed upon the bonds by the acts under which they were issued, but upon general principles. It was a loaning and box-rowing of the funds of the railroad company by the express terms of the obligation executed and received. It was so treated by the parties to it, the ' bonds received by the complainant having been used for his own purposes, and new bonds procured with which to replace them. Such a use of the bonds was in plain violation of the trust impressed upon them by the acts of the Legislature authorizing their issuance. And such a use by the president and a third person with knowledge, of even the ordinary funds of a corpora
Although G.’ M. Branner is a competent witness as between the complainant in the cross-bill and the executors of John R. Branner, he is incompetent, by the terms of the statute, in the litigation under the original bill, between himself and his brother’s estate. Code, sec. 3813d. There is no testimony, therefore, to establish the actual delivery of the bonds by him to John R. Branner about the 1st of July, 1868, as claimed.
AH that can be said of the other testimony is, that it is persuasive of the general truth of the narrative of the original bill. The gravamen of the statement, however, is that the bonds were procured for a specific purpose, namely, the payment of interest on the 1st of July, 1868. The bill concedes that no such payment was made, and that there is nothing to show the disposition of so large a fund by John R. Branner. It is obvious that if the object for calling in the loan was prevented, the payment
In the progress of this cause William M. Branner, upon his own application, was appointed by the Chancery Court special administrator of the estate of John R. Branner, and filed an answer. The proceeding was without authority of law, and void.
William M. Branner will be charged with all the costs incident to this action, and Gr. M. Branner will pay the residue of the costs.