Thorn & Maginnis v. Wallace, 74 So. 610

Thorn & Maginnis v. Wallace

74 So. 610 | Miss. | 1917

SteveNS, J.,

delivered the opinion of the court.

Appellants were made defendants to a bill exhibited by appellee as receiver of the Citizens’ Bank of Wil-*656Irinson County, the estate of which is being administered by the chancery court. They prosecute this appeal from a decree overruling their demurrer to the bill. The bill of complaint charges that Thorn & Ma-ginnis is a partnership composed of C. D. Thorn and W. T. Maginnis, nonresidents of the state of Mississippi, domiciled in the city of New Orleans and there engaged in the general business of buying and selling cotton futures; that the defendant S. Blumenthall is a resident citizen of Wilkinson county and is the agent or employee of said partnership, and as such accepts orders or contracts for futures and represents generally the interests of Thorn and Maginnis in said county of Wilkinson. The complainant charges that one Gr. C. MacLeod, during the years 1910, 1911, and 1912, was the cashier of the said Citizens’ Bank, and while such cashier unlawfully abstracted the funds of the bank to the amount of six thousand five hundred dollars, and invested the money so abstracted in cotton futures; that the individual members of said cotton brokerage firm, as well as their agent Blumenthall, induced and permitted MacLeod to speculate at cotton futures, and received from MacLeod the money unlawfully abstracted from the funds of the bank; that this money was received in the buying and selling of futures; that it was received with knowledge that MacLeod, the cashier, was a man without visible property, of limited means, and dependent upon his salary for a livelihood. The bill further charges that the said sum of six thousand five hundred dollars was received in various amounts and at various times, shown by a schedule to be filed later as an exhibit to the bill. The schedule referred to does not appear in the record of the- appeal. The strongest allegation in the bill as to the knowledge which the defendants had of the cashier’s peculations is as follows:

“That the said sum of six thousand five hundred dollars was paid to and received by said defendants *657through the felony of the said MacLeod after they had every reason to know and be informed of his inability to pay said sums of his own means and money, and was actually received by the said Thorn & Maginnis and the members thereof with the utmost bad faith.”

One D. W. Huff is made a party defendant on the theory that he was a customer of the said partnership of Thorn &■ Maginnis, and that he is indebted to the said firm on account of his dealings in futures. L. H. Dinkins and Mrs. E. J. Blumenthall were made parties defendant, on the theory that they hold the legal title to certain real estate in said county as trustees of Thorn and Maginnis and their agent Blumenthall. The prayer of the bill is for a decree against Thorn & Ma-ginnis and their agent, S. Blumenthall, for the total amount of moneys received by them from G-. C. Mac-Leod, and for an, attachment in chancery, to be levied upon their said real estate in Mississippi. A general demurrer was filed by all of the defendants, and also the separate demurrer of Thorn and Maginnis and D. W. Huff.

While it is true that the receiver succeeds to the right and title of the Citizens’ Bank, no statute of our state gives to the bank the right to sue for and recover losses sustained by its cashier, MacLeod, in gambling on “futures.” Neither MacLeod nor the members of his family are parties to this litigation. In fact, it is frankly conceded by counsel for appellee that this bill cannot be maintained upon the theory that the bank has a right to recover any money lost in gambling and in the buying of futures. It is contended, however, that the receiver has the right to recover moneys unlawfully embezzled or abstracted by the cashier and received by Thorn & Maginnis with knowledge that the moneys were stolen. The only question now before us is a question of pleading. Does the bill of complaint state a cause of action? We think not. The bill does not charge that either Thorn & Maginnis or their agent, *658Blumenthall, liad actual knowledge that any of the moneys received by them from MacLeod was the money of the Citizens’ Bank, or that it had been stolen from the bank. The bill does charge that the defendants had every reason to believe that MacLeod was unable to repay the said sums of money out of his own moneys, and it does' charge that the money was “received with the utmost bad faith.” The' bill does not state definitely and with precision that the defendants had actual knowledge of MacLeod’s felony, and aver-ments of this character, in our judgment, are necessary before the coinplainant has presented a good hill. It is to be noted that the complainant does not particularize as to the dates or circumstances under which the moneys were received. It does not show whether Mac-Leod paid these moneys directly to Blumenthall or transmitted them to Thorn & Maginnis, at New Orleans. It does not charge whether the moneys were paid in legal tender, by cashier’s checks, or by exchange. It does not present a case where the cashier has undertaken to pay his individual debts with the bank’s paper, or in such way as to disclose upon its face the bank’s ownership. It does not even charge that the defendants had actual knowledge that any of the moneys were stolen. We do not consider it our duty to point out or decide just what averments will be necessary. All we need to decide now is that the complainant has not presented a good bill. Certain it is that no right to recover is showh_ unless the bill expressly charges that the money was received with knowledge that it was stolen.

The fact that4 the defendants are general dealers in cotton futures is a mere incident, and can have little direct bearing upon this case. This fact may be a circumstance tending to prove bad faith on the part of MacLeod as well as the defendants themselves. But the bill of complaint should not be bottomed upon mere suspicion or circumstances that would create a suspicion. *659There should he clear and positive averments of knowledge and had faith; notice by implication is not sufficient. Money passes by delivery, and any one trading with MacLeod had the right to accept his money without an inquiry as to whether it was borrowed or stolen. A fair discussion of this exact question will be found in First National Bank v. Gibert, 123 La. 845, 49 So. 593, 25 L. R. A. (N. S.) 631, 131 Am. St. Rep. 382, and especially the case not L. R. A.

The decree of the learned chancellor will be reversed,' the general demurrer sustained, and the cause remanded, with leave to appellee to amend generally the bill of complaint within thirty days after receipt of mandate by the clerk of the court below.

Reversed and remanded.