Carothers v. Love

152 So. 483, 169 Miss. 250, 1934 Miss. LEXIS 8

• Court: Mississippi Supreme Court
• Decided: February 5, 1934
• Docket: No. 30963.
• Status: Published

Opinions

Appellee instituted suit against a number of stockholders of the Booneville Banking Company, a state bank in liquidation, and, from the decree in his favor, five of them or their personal representatives have appealed. The record is involved in such a multitude of facts that we have concluded that to attempt to make an accurate and detailed statement thereof and to discuss the many points of law raised by the parties would produce an opinion too lengthy to be of practical value. Therefore, except as to the law point covered in the last paragraph of this opinion, we shall confine ourselves to a resume of our conclusions:

(a) In the matter of the Sanders' estate: The main contention here has been ruled adversely to appellant in Anderson v. Love (Miss.), 151 So. 366, and, since the decree was against the representative as such, and was not a personal decree, the other objections disappear.

(b) In the matter of Carothers: Looking through the form to the substance, the margin account created by, and credited for, the fifteen thousand dollars note and deed of trust, was equivalent to an original deposit of that amount against which is to be deducted the overdraft account of thirteen thousand one hundred two dollars and twenty-one cents, thus leaving the balance as an original deposit. This cannot be set off against the stock liability, as was held in Anderson v. Love, supra. For more than one reason, the arrangement said to have been made with Creekmore, former liquidator, cannot be availed of here.

(c) In the matter of the Whitesides' estates: There is and can be no objection to the decree as to the fifteen shares originally owned by W.R. Whitesides. As to the fifteen shares which he inherited from his son, the objections are not maintained, because the testimony shows that, aside from those shares, he actually received from his son's estate more than the one thousand five hundred dollars represented by those shares, and that he so dealt with the said fifteen shares and with the son's estate as to fasten upon him the status of a voluntary stockholder in relation to the last-mentioned fifteen shares. But the evidence is not sufficient in these respects as to Mrs. Alice Jordan Whitesides, and her estate is to be held only for what she actually received from or through the estate of her deceased son up to, but not more than, one thousand five hundred dollars.

The decree will be affirmed as to all the appellants except the personal representative of Mrs. Alice Jordan Whitesides, and will be reversed and remanded as to that particular estate, the cost of the appeal to be taxed against the other appellants.

The objection that the demand against the Whitesides' estates was not properly probated is immaterial. The death of all three of the Whitesides, whose estates are involved here, occurred before the bank closed its doors and went into liquidation. At the time of their deaths, their stockholders' liability had not ripened into a claim. The double liability of a voluntary stockholder in a bank, although rooted into and a part of his express or implied contract of subscription to the stock, remains inchoate and immature until the bank closes its doors, goes into liquidation, and it thereupon reasonably appears that the assets of the bank will be insufficient to pay its depositors. Gift v. Love, 164 Miss. 442, 144 So. 562, 86 A.L.R. 63; Anderson v. Love, supra. Until that time, it has no ascertained, enforceable existence, and therefore has been contingent and not absolute — until that time it was a liability and not a claim. Harris v. Hutcheson, 65 Miss. 9, 3 So. 34; Robinett v. Starling, 72 Miss. 652, 18 So. 421. It follows that it is not necessary to probate a demand for stockholder's liability when the stockholder has died before the closing of the bank. This was conceded in Board of Bank Examiners v. Grenada Bank, 135 Miss. 243, 99 So. 903, and is sustained by the authorities where the identical question has been ruled upon, as, for instance, in Hirning v. Kurle, 54 S.D. 334, 223 N.W. 212, Miller Lux v. Katz, 10 Cal.App. 576, 102 P. 946. If it were not so held, the result would be brought about that, where the closing of the bank occurred more than six months after the publication for probate of claims against the estate of a deceased stockholder, the estate would escape liability altogether.

Affirmed in part, and reversed in part.