184 Mo. 61 | Mo. | 1904
In 1888, the Central Bank of Kansas City'was doing a banking buisifiess, as a Missouri corporation, with a capital stock of $100,000. The defendant George E. Thayer, having acquired stock in the bank, was on September 7, 1888, elected vice-president of the bank, and on December 5,1888, elected as its cashier, and continued to act in that capacity until the bank ceased to do business on the fifth of March, 1891, when, by the action of its stockholders, the bank went into liquidation, and turned over all of its assets to the defendant Thayer for the purpose of winding up its affairs. He accepted the trust and entered upon the discharge of his duties and from that time on continued to do so until the appointment of Mr. Strother as receiver on December 5, 1898. On September 16, 1899, this suit was instituted.
The petition alleges:
“That on, to-w-it, the fifth day of December, 1888, the said defendant was, by the board of directors of the plaintiff bank, elected cashier of the plaintiff bank, and thereupon entered upon the duties of such office and continued to act as such cashier continuously thereafter
The answer of the defendant Thayer in respect to the same matter states:
“This defendant admits that he was elected cashier of said bank December 5, 1888, and was such cashier until the appointment of said Strother as receiver as above stated . . . and this defendant avers and says that on December 5, 1888, he was duly and legally elected cashier of plaintiff bank at a salary of $150 per month; that the amount of the salary of the cashier of said bank had theretofore been fixed-and provided for by the board of directors of the said bank; that up to and including the time the said bank went into voluntary liquidation this defendant had been paid and received his salary as said cashier; that by the by-laws of
The answer contains the following further allegations :
“And defendant avers and says, that sometime in March, 1891, plaintiff bank, by a vote of a majority of its stockholders, decided to cease its operations as a bank, and to go into voluntary liquidation; that at that time this defendant was its cashier, duly elected, qualified and acting; that at said time said bank was paying as rent for the office in which it did its business, the sum of $250 per month; that the books, papers, assets, property and effects of said bank were at said time, by its board of directors and managing officers, placed in the custody, charge, control and management of this defendant, as cashier, for the purpose of collecting the assets, winding up the business, and transacting all necessary and needful work in closing up the affairs of said bank; that to save said money, and to reduce its expenses, this defendant moved the assets, property and effects of said bank from the expensive offices theretofore occupied and used by it to the office of the Thayer
The petition contains seven counts, and after issue was joined thereon by answer and reply, the trial court, on motion of the defendant, Thayer, duly appointed R. E. Ball, of the Kansas City Bar, referee “to hear and decide the issues both of law and fact herein.”
The hearing before the referee began on April 13, 1900, and continued from day to day and time to time until February 25, 1901, when the referee filed his report.
The referee found the issues for the plaintiff on the first, second, fifth and sixth counts of the petition, and for the defendant on the other three counts.
On May .28,1891, whilst Thayer was acting as trustee for the bank in winding up its affairs, the bank, through Thayer, bought at trustee’s sale some real estate in Kansas City, Missouri, known in the evidence as the “Morley property.” The bank bought in this Morley property at the trustee’s sale because it was interested therein as the holder of a junior mortgage. The bank took title by trustee’s deed to the Morley property, subject, however, to the lien of a prior deed of trust for $2,500. Immediately upon the purchase of this property by the bank, Thayer, as the trustee of the bank in winding up its affairs, took possession, management and control of the property. About that time Thayer bought the $2,500 note which was secured by the first mortgage on the property. . Tie paid for this note out of his own funds. Sometime afterwards, in March, 1§92, the circuit court of St. Louis rendered judgment against
Afterwards, on July 17 of the same year, 1893, Thayer caused an alias execution to be issued on this Hilliard judgment, and levied on the Morley property then owned by the bank subject to the $2,500' deed of trust then held by Thayer. On October 11, .1893, the sheriff sold the property under this alias writ, and Thayer bid it in in the name of one Isaac Niles. Niles was a distant relative of the defendant, and lived in Massachusetts. He knew nothing of the purchase of this property in his name and in fact did not buy it.
About two years after the sheriff ’s sale of the Morley property, and after the delivery of-the Niles deed to the defendant, Kansas City passed an ordinance condemning this Morley property for park purposes, and on September 28, 1896, the value of this Morley property was assessed by a condemnation jury at $7,913. A few days after the confirmation of this verdict, to-wit, on December 26, 1896, the defendant caused the trustee under the deed of trust securing the $2,500 note which he held against this property to sell the property under the said deed of trust, -and at the sale the defendant bid in the property and caused a trustee’s deed to be made to E. F. Swinney, who was president of a bank which held the $2,500 note as collateral to a note of defendant, and who knew nothing of'defendant’s practices.
Afterwards, on July 20, 1898, the city paid to Mr. Swinney the assessed value of this property, viz., $7,913, and the money was applied to- the use of the defendant by the satisfaction of his individual debts which were due to the bank of which Mr. Swinney was president.
After the sale of the Morley property under the Hilliard judgment and the conveying of it by the sheriff to Niles, the defendant Thayer collected all of the rents arising from this Morley property and used the same for his own purposes. The amount of rents that he collected aggregated $2,100.
The referee found that this Morley property belonged to the bank continuously after its purchase thereof in May, 1891, and that the attempts of the defendant Thayer, to buy the same under the Hilliard judgment and under the prior deed of trust which he had bought up,'were fraudulent and void as to the bank, and that he, Thayer, neither acquired title, to the property nor any rights to the rents arising therefrom, and after giv
The finding of the referee and the judgment of the trial court thereon against the defendant on the fifth and sixth counts of the petition are the things now complained of and brought here for review.
The fifth count of the petition, after alleging at length the cashiership of the defendant and the fiduciary position occupied by him, and his duty arising therefrom to protect the bank and all its property for the benefit of creditors and stockholders, proceeds to charge:
“That on the thirty-first day of January, 1890, and prior to that time, the defendant was'the owner of twenty-five shares of the capital stock of the plaintiff bank of the par value of one hundred dollars per share; and on said last-mentioned day, in violation of his duty as'the cashier of the plaintiff bank and in breach of his trust as an officer of the plaintiff bank, and without the knowledge or consent of the plaintiff bank or any of its officers, directors or stockholders said defendant unlawfully, wrongfully and fraudulently took out of the moneys and property of the plaintiff bank the sum of two thousand five hundred and fifty dollars and deposited the same to his individual account with the plaintiff bank and converted the same to his own use; that said defendant took and converted said money of the plaintiff bank to his own use under color of a pretended sale or transfer to the plaintiff bank of twenty-five shares of the capital stock of the plaintiff bank theretofore owned by him, which said pretended sale was made by defendant, from himself as.an individual, to himself as cashier of the plaintiff bank, purporting to act for and on behalf of the plaintiff bank, but which pretended sale
The petition then alleges the making of an offer to return to the defendant the twenty-five shares of stock, and a demand for a return of the money converted by him to his own use and renews such offer to return the stock, and asks judgment for the $2,550 of money which he was alleged to have, taken out under pretense of the sale of the stock. .
The sixth count of the petition after setting out the fiduciary relation which'the defendant bore to the bank, and his duties to the bank and its creditors and stockholders to faithfully protect the interests of the bank in respect of all its property, effects and assets, proceeds to charge:
“That, on, to-wit, the thirty-first day of January, 1890, and prior thereto, one J. W. Sponable was the owner of twenty-five shares of the capital stock of the plaintiff bank of the par value of $100 per share; that on said day said defendant, in violation of his duty as cashier of plaintiff bank, and as a trustee for the plaintiff bank and the stockholders thereof, fraudulently and wrongfully took from the assets, moneys and property of the plaintiff bank the sum of $2,550, and deposited the same to the credit of said J. W. Sponable in his -individual deposit account with the plaintiff bank; and that thereafter said sum was by said Sponable converted to his own use and wholly lost to the plaintiff bank; that said defendant took said money and depos
The petition then alleges the demand for the repayment of the money so delivered to Sponable and prays judgment therefor.
The answer treats the causes of action set up in the fifth and sixth counts of the petition as one and the same transaction, and in general terms denies that the defendant ever owned the said twenty-five shares of stock in the bank, and denies that J. W. Sponable ever owned the said twenty-five shares in the bank referred to in the sixth count, and denies the pretended sale thereof to the bank, as alleged in the petition, and then proceeds to state as follows:
“Defendant avers and alleges the fact to be that on or about the seventh day of November, 1888, one Parnell C. Cowling was indebted to said plaintiff bank in the sum of $5,100; that to secure said indebtedness the said Cowling had pledged to said bank, as collateral security, $5,000 of the capital stock of said bank; that said indebtedness was past due and the said Cowling was unable to pay the same; that said bank at that time was much in need of money due from Cowling; that
The answer then proceeds to allege that the whole transaction was fully known to, understood by and acquiesced in by the bank, its president and directors, and further that everything which the defendant did “in and about advancing of said money to be applied upon the debt of said Cowling and in the payment and reimbursement to said Sponable and himself of said money, and the surrender and delivery to said bank of said capital stock of said Cowling,” was known to said bank and to its president and board of directors more than five years before the commencement of this action, and pleads the statute of limitations in bar.
It will be noticed from the pleadings as to the fifth and sixth counts, that the petition alleges that Thayer and Sponable each ownedi twenty-five shares of the
The parties went to trial upon the issue so presented, viz., as to whether the defendant and Sponable were the owners of this stock and fraudulently unloaded it on the bank and took out enough money from the bank to pay them at the rate of $102 per share for the stock, or whether they did what the answer alleges that they did, viz., reimbursed themselves for the loan previously made to the bank, and returned the Cowling stock which they held as security therefor.
The referee found this issue for the plaintiff.
Thomas R. McClintock, who was a creditor of P. C. Cowling, brought a suit against Cowling, by attachment and attached Cowling’s stock in this bank, obtained judgment and the sheriff sold the stock, and Mc-Clintock bought it at the sale. He afterwards demanded a certificate from the bank for the fifty shares of Cowling stock, and the bank refused to give it, and McClintock sued the bank for the conversion of the fifty shares of stock. The bank filed an answer to the suit, in which it alleged, among other things, that the ..bank held Cow
Upon the trial of said McClintock case said Thayer, the appellant, was a witness and testified as follows:
“Q. Did Mr. Cowling, in the course of this conversation, agree that the property in these bank shares should be sold for $102 per share to be credited on his note? A. Yes, sir.
“ Q. To whom was the sale of that stock made ? A. It was made to me.
“Q. And that amount of money was paid into the assets of the bank? A. It was. . . .
“Q. How did you pay that money, in cash or draft? A. I am not certain, but I think I paid it by a draft on the Miami National Bank of Paola. I thiuk half of it was draft, and it may have been all draft, or, possibly part was cash, I can’t tell.
‘ ‘ Q. What was the value of that stock at that time ? A. I don’t know.
“ Q. You considered it worth $5,100 ? A. I wanted it at $5,100 or I should not have paid that amount for it.
“ Q. Do you recollect when that transaction was ? A. It was in September, 1888.
“Q. To whose order was the draft made for the purchase-money? A. The Central Bank, I think. The money was paid — at least the bank received the proceeds of the sale of the stock.
“Q. How much was that draft? A. -"We paid $5,100 for the stock. I don’t remember just in what manner we paid it, whether by draft or part by check. . . .
“Q. Did you casually meet Mr. Cowling on the street, or did you make an appointment with him? A. I made no appointment with him. I think I met him without appointment.
“Q. Did you buy other stock at that time? A. I was buying other stock at that time, yes, sir.
“Q. How many shares did you own at that time? A. About $11,000 worth.
“Q. The Central Bank has gone out of business? A. Yes, sir.
“Q. When did the bank go out of business? A. Last January.
‘ ‘ Q. What was the capital stock when it went out of business? A. One hundred thousand dollars.
“Q. How many shares of that stock do you own? A. One hundred and eleven, and a fraction, I think. . .
“Q. What was the dividend declared by the bank since you became a stockholder — the'annual dividend? A. There never was but one dividend declared, and that was three per cent.
“Q. When was that? A. In the fall of 1888, about the time I became connected with the bank.....
“Q. Why did they declare that dividend of three percent? A. I had nothing to do with that.. That was before I was cashier. If I had been cashier it would not have been declared. -
“Q. How do you know it was declared? A. Because I received it on some shares I had. . . .
“Q. How do you know it was after? A. Because I know I had the stock and had paid for it. '• :
“ Q. How is it that you can’t fix the date previous to that in the other matters ? A. Probably there was not as much money at stake as there is in this. A man will remember stock that he has $5,000 interest in.”
There was no evidence whatever to contradict the proof that Thayer and Sponable bought and were the owners of this stock.
Thayer testified that this transaction was entered upon the books of the bank, and that it was known to the officers of the bank, but when required to name the officers of the bank who knew about it, he named Mr. Ridge, the president, F. T. Sponable, the bookkeeper, ■and himself, George E. Thayer, the cashier. Thayer ’a testimony upon that subject is as follows:
“Q. Was the transaction entered upon the books of the bank? A. It was.
■ “Q. State whether or' not it was known to the officers of the bank? A. It was.
“Q. What officers of the bank knew of it? A. They all knew of it.
“Q. Name them? A. Mr. Ridge, P. T. Sponable and George E. Thayer.”
Mr. Ridge was president of the respondent bank at the time and for some time afterwards. He resigned in the fall of 1891. If the evidence showed that Ridge knew of the transaction it might be that his knowledge was the bank’s knowledge as he had no interest in permitting the fraud to stand. But Mr. Ridge, as the evi- ■ deuce shows, was not active in the management of the business and his testimony is clear and positive that he knew nothing of this transaction, as the following extract from his testimony will show
■ “Q. Mr. Ridge, do you know anything about a
“Q. Never had anything to do with that transaction? A. No, sir.
“Q. Was it not reported to you? A. No, sir.
“Q. Did you ever approve of it? A. No, sir.
“Q. Did you ever see anything on the books that indicated such a transaction had taken place? A. No, sir. . . .
“Q. Who was in the active management of this bank while you were president? A. Mr. Hamilton was first and Mr. Thayer was subsequently.
“Q. Cashier? A. Yes, sir.
“ Q. I understood you to say, so far as this transaction of replacing this Cowling stock in the bank in January, 1890, is concerned, you knew nothing about it? A. No, I did not know anything about it.”
Thayer’s testimony given in the McC'lintock case on that point is as follows:
‘ ‘ Q. What were, the assets of the bank at that time and of what did they consist? A. Notes, bills receivable and some stock. I do not know whether they had any real estate at that time or not.
“Q. Do you know what they would aggregate? A. I do not remember now.
“Q. What did thé assets of the bank consist of at the time they went out of business? A. Real estate and bills receivable.
“Q. Had they any money? A. Yes, sir.
“Q. How much? A. We had money enough so that we paid our depositors one hundred cents on the dollar.
“ Q. How much was left? A. I think about $60,000.
“Q. Cash? A. Yes, sir.
‘ ‘ Q. Did that' represent the earnings of the bank since September, 1888? A. No, sir.
££Q. Did it represent any portion of the earnings of the bank? A. No, I think not. I don’t think the hank ever made any money.
££Q. Will yon swear the bank didn’t make any money daring that time? A. No, I wouldn’t swear to it; I only give my opinion.
££ Q. Don’t you Jmow that it did? A. I know from the outcome it did not, because when they come to wind up they are way behind.
££Q. Why did they declare that dividend of three per cent? A. I had nothing to do with that. That was before I was cashier. If I had been cashier it would not have been declared!’-’
The report of the referee leaving off the formal parts is as follows: . -
££1. On the issues made by the first count of the petition, and the answer, and reply, I find for the plaintiff, and find that the property described in the first count being owned by the Morleys as stated in the petition, they gave a deed of trust on the same January 28, 1886, to secure a note for $2,500, due five years after date, payable to Chas. P. Emery. On August 10, 1886, the Morleys gave a second deed of trust to said Emery to secure a note for $1,000 due three years after date. Up to this time, the plaintiff, Central Bank, had no interest in the property, but on September 8, 1890, while the bank was still in business, the Morleys, for value, gave a third- deed of trust to secure to the Central Bank their note for $4,500. In December, 1891, the-bank went into voluntary liquidation, and by action of its stockholders turned over to defendant for collection and proper distribution, all of its assets and effects, and committed to the defendant the duty of winding up its business, which duty was assumed and carried on by defendant until the appointment of A. R. Strother as receiver of the bank, on December 5, 1898.
“On July 17, 1893, defendant caused an alias execution to be issued on the Hilliard judgment and levied on the Morley property, then owned by the.Central Bank, subject to the $2,500 deed of trust then held by Thayer. On October 11, 1893, the sheriff sold the property under this alias writ, and defendant bid it in for $775 in the name of one Isaac Niles. In fact, Niles did not buy it, and so far as the evidence shows, knew nothing of the matter, but the attempt at purchase was by defendant for his own benefit. The sheriff’s deed to Niles was made and delivered to defendant October 14, 1893. It was withheld from record for many years, and until January, 1899. On September 11, 1895, the city passed an ordinance for the condemnation of this Morley property, among other property, for park purposes. The condemnation verdict was rendered September 28,. 1896, and was confirmed December 21; 1896, assessing the value of this property at $7,913. At this time and for some time prior, the Emery note and deed of trust for $2,500, which, as stated, had been taken up by the defendant about April, 1891, -was held by the First National Bank of Kansas City as collateral to indebtedness to the bank owing by defendant Thayer and the Thayer Commission Company on their joint obligations. A few days after the confirmation of the verdict assessing this property at the value stated and on December 26, 1896, defendant had the trustee sell it again
“On July 20, 1898, the city paid Mr. Swinney $7,-913 for the property, in accordance with the verdict and judgment, and the money was applied to the use of the defendant in satisfaction of his individual debts to the bank. *
“I find that from the date of the sale made to the Central Bank in May, 1891, under the Emery second deed of trust for $1,000 until the payment to the First National Bank of $7,913 in consummation of the judgment of condemnation, the Morley property belonged to the Central Bank; that during that time defendant, as trustee of the hank, was in possession and control of the property; that in taking up the Hilliard judgment he simply, as trustee, advanced the necessary funds to pay it, as he himself regarded it by charging to the bank the amount paid; that in having that judgment in form assigned and under alias execution causing the property to be sold and buying it in the name of Niles, he attempted to deprive his principal of the beneficial ownership of the property; that he attempted the same thing when,, after the condemnation verdict had been confirmed, valuing this property at, $7,913 and virtually disposing of it to the city for that amount, he caused the sale to be made under the first deed of trust; and that as far as the bank, or the plaintiff receiver, is concerned, these maneuvers were futile and void, and the sum of $7,913 received by Swinney, and applied as stated, was the money of the bank. The defendant should have credit for the amount of his advances with six per cent to the date of the receipt of the condemnation money, and should be charged with the balance with interest at six per cent from that date to the date of filing this report.
“I, therefore, find and state the account on the issues made on the first count of the petition as follows:
Defendant is credited, July 21, 1898:
By $2,624.25, with 6 per cent interest, from April 1, 1891 .-.....$3,775.55
By amount paid repairs.......... 56.15
By amount paid insurance...... . 150.60
By ainount paid counsel and witness fees in condemnation case____ 277.08
By amount paid title.certificate ... 55.00
By amount paid paving tax ....... 98.20
By amount paid general taxes____ 221.14
. $4,633.72 4,633.72
Balance due July 21, 1898 ........ 3,279.28
To interest from July 21, 1898, to
February 25, 1901 ......... 510.43
Total.................. ...... .$3,789.71
“2. I find the issues on the second count of the petition for the plaintiff. Inasmuch as I have already found that the Morley property continued to be the property of the Central Bank after the making of the sheriff’s deed to Niles October 14, 1893, and until the payment by the city of its assessed value on July 20, 1898, it follows that the rents collected by defendant from the date of the sheriff’s deed to Niles to August 1,1898, belonged to the bank and not to the defendant. He collected and used during this time the sum of $2,-100. • He did not charge himself with these rents, because he assumed that the property was his and, therefore, that its income was his. I hold that the rents mentioned must be accounted for to plaintiff. I, therefore, find -that plaintiff is entitled to recover on the second count the sum of $2,100, with interest at six per cent per annum from December 1,1898, to the date to which the defendant’s account was balanced on the books of the bank before their delivery to the receiver.
“4. The fourth count of the petition seéks to recover the sum of $2,975 for which the defendant has charged the bank as salary for looking after its affairs after July 1, 1891, I do not hesitate to hold and find that if the compensation claimed related to the defendant’s pay for services in the matter of the Morley property or in relation to the Cowling stock transaction, involved in subsequent counts of the petition, then he should not be allowed any pay, and should be held to have forfeited his right to any; hut it must be remembered that the duties devolved upon and discharged by defendant in winding up the affairs of the bank were various and extensive; that he collected a large amount of. the assets, and except in some of the instances chai
“5. The fifth and sixth counts may be considered, together. In September, 1888-, one Cowling was .heavily indebted to plaintiff bank and was the owner of fifty shares of its capital stock, evidenced by two certificates for twenty-five shares each. On September 24, 1888,
“On the fifth count of the petition, I find the issues for the plaintiff and that the plaintiff is entitled to re- ■ cover thereon $2,550 with interest at six per cent per annum from J.anuary 31, 1890, to date. On the sixth count of the petition, I find the issues for the plaintiff, and that he is entitled to recover on said count the sum of $2,550 with interest at six per cent per annum from January 31, 1890, to date.
“6. On the issues made by the seventh count of the petition and the answer and reply, I find for the defendant. The matters involved in the other counts of the petition, except the third and fourth counts, are not
“I therefore, on this general account, find in favor of defendant in the sum of $2,560.96, with interest from December 1,1898, at the rate or six per cent per annum to date.
‘ ‘ 7. Hence, on all the issues made by the pleadings,I find that the defendant should be charged and credited as follows':
To amount due plaintiff-on first count .. . .$ 3,789.71
To amount due plaintiff on-second count .. 2,381.75
To amount due plaintiff on fifth count .... 4,243.00
To amount due plaintiff on sixth count ... 4,243.00
. Total.................,..........$14,657.46
By amount due defendant on seventh count .. 2,904.53
To balance.........................$11,752.93
“I find for plaintiff in the total sum of $11,752.93 as the amount which he is entitled to recover from defendant this twenty-fifth day of February, 1901, and recommend judgment therefor.”
Defendant in due time filed exceptions to the report of the referee which were overruled, and he excepted.
.Thereupon the court rendered judgment for plaintiffs for $11,752.93.
Defendant’s -first insistence is that a corporation has authority of law to buy its own stock, but we do not understand that any such question is involved in this controversy. Plaintiff’s position is that the' bank did not undertake to buy any of its own stock, but that its cashier, the defendant, abstracted from its treasury five thousand one hundred dollars under a pretended sale,of fifty shares of its capital, attempted to be made by himself as an individual to himself as cashier. -The issue made by the pleadings and tried below was whether defendant had abstracted five thousand one hundred dollars from the bank’s treasury under the pretended sale of stock, or whether he had taken that five thousand one hundred dollars from the bank’s treasury in repayment of money advanced or loaned by him and Sponable to the bank; and the referee found the issue for plaintiffs.
It is argued by defendant, however, that there was no evidence to support the finding of the referee that defendant abstracted the sum of five thousand one hundred dollars from the funds of the bank without the knowledge of the managing officers of the bank; that the president of the bank was the only managing officer who denied knowledge of this transaction, and this in the face of his sworn statements made to the Secretary of State in which this stock is shown as an 0asset of the .bank.
It is true that Fred. T. Sponable, one of the directors who examined the statements of the bank, made in September, 1890, knew of the transaction when it was made, and made the entries of the same upon the books of the bank at the time the transaction occurred. And Thomas S. Ridge, F. T. Sponable and L. Gf. A. Copely, directors- of the bank, attested the sworn statement made, but Ridge testified that he rarely ever examined them, did not make them up, but that that was
About that time or shortly afterwards, twenty-five shares of this stock were transferred to J. W. Sponable and he and defendant held the stock for over a year and collected at least one dividend on it. Soon thereafter Thayer was elected cashier and entered upon his duties as such and was practically infull control of the assets of ■the bank. He and' Sponable held this stock a year and four months without- any further dividends being declared or paid thereon. During this time defendant became thoroughly familiar' with the business of the bank, and its financial condition, saw that it was not making •but losing money, that he had paid too much for tliis stock, which was about to be sold as the property of Cowling, and under these conditions some five days before the day fixed for the sheriff’s-sale, defendant of his own volition without consulting anybody caused the money which he had paid for the stock to be returned to him and Sponable.
It is true that F. T. Sponable was at the time of the transaction in question a director and one of the bookkeepers in the bank, and made the entries necessary to place the five thousand one hundred dollars, one-half to the credit of Thayer, and the other half to the credit of J. W. Sponable, his father. He testified in effect that he knew but little about the transaction except that the stock was turned back to the bank and the money placed to the credit of his father and Thayer, by the direction of Thayer. There is of course no question but that these two officers of the bank knew all about these entries. It is said that Ridge also must have known of these entries, because he was president of the bank
But Ridge testified that he knew nothing about the matter and nothing about what was included in said report. F. T. Sponable was the son of J. W. Sponable, who claimed one-half of the stock in question, while Thayer owned the balance. P. T. Sponable was, therefore, indirectly, and Thayer directly, interested in the transaction, and while having full knowledge of the transaction they never, it seems, imparted to other officers or stockholders any information in regard to it. Under these circumstances their knowledge should not be held knowledge of the bank.
■ The defendant’s next contention is, that the transaction having occurred more than five years before the institution of any suit, the action is barred by the statute of limitations; because the transaction was open, visible and unconcealed, and was put upon the books of the bank at the time the transaction occurred, and the books were open to the inspection of the officers and stockholders of the bank. As a general rule the statute of limitations begins to run in favor of a person who commits a fraud as soon as committed, unless it be concealed from the plaintiff or party complaining, or which is of such a character as necessarily implies concealment. The defendant while acting in the capacity of director and cashier for the bank was an implied trustee or agent for it. [Landis v. Saxton, 105 Mo. 486; Kane v. Bloodgood, 7 John. Ch. 90; Williams v. Halliard, 38 N. J. Eq. 373; Cooper v. Hill, 94 Fed. 586; Hayden v. Thompson, 36 U. S. App. 361, 71 Fed. 60; Briggs v. Spaulding, 141 U. S. 132; Spering’s Appeal, 71 Pa. St. 11; Wallace v. Bank, 89 Tenn. 630; Hughes v. Brown, 88 Tenn. 578; Allen v. Curtis, 26 Conn. 456; Ryan v. Railroad, 21 Kan. 365; Commissioners v. Reynold, 44 Ind. 509; Company v. Gibb, L. R. 5 H. L. 480.] And
But if the defendant was guilty of fraud in concealing this transaction so that the bank did not discover it until the receiver was appointed, a different rule prevails, and he can not avail himself of the statute of limitation, unless the plaintiff corporation was in possession of or had notice of the main facts constituting the fraud.
The burden of proof was upon the plaintiff to.establish the exception to the general rule" and to establish the fraud. [Shelby County v. Bragg, 135 Mo. 291; Callan v. Callan, supra.]
No officers of the bank other than those named had any notice whatever of the transaction in question, except what is shown upon the books of the bank. -Thayer never sáid a word to any of them about dt, and Ridge, who was president of the bank at the' time, testified that he had nothing to do with it, and knew nothing about it. It is true that Thayer testified that all the officers of the bank knew about it, but when asked to name them he answered, Mr. Ridge, P. T. Sponable and George E. Thayer. ^ With respect to this matter the referee found that “the whole transaction of abstracting this money was a fraud oh the rights of the bank and was unknown and unapproved by any of its stockholders and officers, except the parties interested and the bookkeeper, who at defendant’s direction passed the funds to the credit of defendant and Sponable as stated. ’ ’ This finding is
We come now to the question of concealment of the fraud by defendant.
The entries which were made upon the books of the bank, evei^ if they had been seen by the other officers, would not have disclosed to them the fact that Thayer was selling this stock to the bank. The entries which Thayer caused young Sponable, the bookkeeper, to make upon the books of the bank are as follows:
First. On the general journal .of the bank at page 296, there is the following entry:
“January 31, 1890-Stocks and Bonds, 50 shares of stock, P. 0. Cowling, $5,100.”
Second. On the general ledger of the bank at page 209, under head of “Stocks and Bonds,” are the following (the first of which entries is also here given so as to explain the latter one, which alone has any reference ■ to this transaction):
“STOCKS AND BONDS.
“May 3,1889,10 shares Oen. Bank Stock, $ 840.”
“January 31, 1890, “50”
P. O. Cowling, 5,100.”
•Third. In a book known as the “general ledger and balance book No. 3,” which book shows,the individual accounts between the bank and its depositors, are found the following entries:
In the individual account of George E. Thayer, under date of January 31,1890, Thayer is credited with $2,550. There is nothing in this entry to show why the credit was given. It is the same entry that would have
In the individual account between tbe bank and J. W. Sponable, under date of January 31, 1890, Sponable’s account is given credit for $2,550. There is nothing in this entry to show why tbe credit was given, but tbe entry is of tbe same character as would have been made if Sponable bad that day brought in $2,550 and deposited it in tbe bank.
There is nothing upon tbe books or records of tbe bank which of themselves would show tbe facts of tbe fraud complained of, viz., that Tbayer bad himself individually sold to himself as cashier this fifty shares of stock, and bad taken tbe money out of tbe bank and put half of it to bis credit, and tbe other half of it to Sponable ’s credit. In fact, when tbe. receiver coupled these entries up with other things and charged Tbayer with making this pretended fraudulent sale, Tbayer denied it, and stated, as alleged in bis answer, that it was not a sale of tbe stock; that be and Sponable bad never, owned the stock; that they bad merely loaned to tbe bank $5,100 and taken this Cowling stock as collateral security; and that tbe entries upon tbe books of tbe bank merely meant that be bad demanded and received tbe return of'the money which hé and Sponable bad loaned tbe bank, and bad returned tbe collateral which they held as security therefor.
We may ask what more could defendant have done in order to have concealed this fraudulent transaction from tbe other officers of tbe bank other than Sponable, the'bookkeeper, who did as directed by him, and who, it does not appear, ever said anything to tbe officers of tbe bank about it, than be did do, unless it would have been an omission from tbe books "entirely of any entry in respect to tbe matter? He was tbe confidential agent of the bank and in full control of all its assets at tbe time of bis perpetration of tbe fraud, and until Strother was
It is said for defendant that the court erred in re- . fusing to permit Thayer to testify under what arrangements he purchased the stock in question in 1888, because the plaintiff had introduced his testimony taken in another case covering the very transaction in question, and having introduced that testimony waived the right to object to Thayer’s testifying on the ground that Hamilton, the cashier, was dead.
The authorities relied upon by defendant in support of his position are: Tomlinson v. Ellison, 104 Mo. 105; Ess v. Griffith, 139 Mo. 322; In re Estate of Soulard, 141 Mo. 642; Borgess Inv. Co. v. Vette, 142 Mo. 560. But they do not do so, for in all those cases the questions were whether or not a party by taking the deposition of a witness otherwise incompetent under the statute waived his' right to object to the incompetency by taking and filing the deposition of such witness. The question before us is whether or not a party to a suit can testify as to any contract or arrangement that he may have made with the opposite party who is dead,
Nor was there error in excluding thg deposition of P. C. Cowling which was offered by defendant, and for several reasons. In the first place the deposition was taken in another case where the parties were not the same as in this, nor were the issues the same.
In the second place the deposition was not filed in this case and no notice ever given by the defendant that he desired or expected to read said deposition. [Leslie v. Rich Hill Coal Mining Co., 110 Mo. 31; Borders v. Barber, 81 Mo. 636.]
Our conclusion is that the judgment-is for the right party and should he affirmed. It is so ordered.