Charter v. Doddridge County Bank

188 S.E. 486, 117 W. Va. 742, 1936 W. Va. LEXIS 147
CourtWest Virginia Supreme Court
DecidedOctober 6, 1936
Docket8426
StatusPublished
Cited by3 cases

This text of 188 S.E. 486 (Charter v. Doddridge County Bank) is published on Counsel Stack Legal Research, covering West Virginia Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Charter v. Doddridge County Bank, 188 S.E. 486, 117 W. Va. 742, 1936 W. Va. LEXIS 147 (W. Va. 1936).

Opinion

Kenna, Judge:

From a decree of the Circuit Court of Doddridge County sustaining a demurrer to his bill of complaint, James G. Charter prosecutes this appeal.

From the bill and its accompanying exhibits, it appears that the plaintiff was elected president of the Dod-dridge County Bank on the 4th day of January, 1930, and that from that day he acted as president and also devoted his full time to the active management of the bank in the capacity of cashier until the 8th day of July, 1933, when he resigned both positions, and the bond given by him was released from further liability. It appears from the minutes of the directors’ meeting of July 8, 1933, that the bank was in financial difficulties at this time, that it was rediscounting heavily and that new deposits subsequent to July 3, 1933, were to be treated *744 as trust funds. It further appears that at a meeting of the board of directors held on the 15th day of July, 1933, the board passed a resolution reciting the services of the plaintiff as president and cashier of the bank from January, 1930, until July 8, 1933, and the fact that during that period he gave his entire time to the active management of of the bank and proceeded to award him a salary equivalent to $200.00 a month for forty-two months, with interest upon the full amount until paid, “said salary being the same as that allowed for these positions for many years past.” The bill alleges that no part of this sum has been paid, nor has any interest been paid thereon in accordance with the resolution of the board of directors, and that as of December 18, 1935, the principal sum, together with interest, amounted to $10,479.00; that on the 13th day of January, 1934, plaintiff filed his claim with the defendant, E. A. Rinehart, receiver of the Doddridge County Bank and that it was then disallowed by Rinehart, either as an unsecured claim or as a preferred claim. The bill alleges the appointment of E. A. Rinehart as receiver of the bank on July-, 1933. The prayer of the bill is that the claim may be established as a valid claim and decreed to be a lien against all of the property and assets of the Doddridge County Bank on the 8th day of July, 1933, and for general relief.

The points urged by the appellees against reversing the decree which sustained the demurrer to the plaintiff’s bill depend upon four propositions: (1) that the bill of complaint is insufficient as a bill to assert a lien; (2) that the plaintiff’s claim, being based upon services rendered to the bank as its executive officer, either as president or as cashier, is invalid because such services are not compensable unless made so in advance by the action of the stockholders of the corporation; (3) that the statute providing for liens against the properties of corporations for those performing services for them should be restricted to those doing manual work; and (4) that in the event all the foregoing points should be decided against the position of appellees, still, under Code, 38-2-32, plaintiff has no lien because the bill of complaint shows that *745 he ceased to work for the corporation on July 8, 1933, and fails to show that he filed a notice of lien as required by statute within ninety day from that date.

We see no merit in the first proposition advanced by the appellees as ground of demurrer to the bill of complaint. Under the facts alleged there is no adequate remedy at law, the plaintiff’s bill seeking, not merely a recovery, but in addition asserting that under the facts alleged he is entitled to a preferential lien, denied by the receiver, to secure the amount owed him. The question whether the alleged facts actually entitle the plaintiff to a statutory lien is not involved on this point, the question now being merely whether equity is a proper tribunal to give him a hearing on the subject matter. We think that it clearly is.

Under the second point, the appellees stress the fact that the plaintiff below served as president of the bank from his election to that office in January, 1930, to the time of his resignation on July 8, 1933, and that the settled law of this state is to the effect that the president of a corporation, in order to be entitled to draw compensation as such, must be employed in advance by the stockholders under an understanding to pay for his services, and that otherwise, the fixed presumption is that his services were not intended to be compensated. This undoubtedly is the law in this state, but it appears from the bill of complaint that the plaintiff was employed also as cashier of the Doddridge County Bank and devoted his entire time to the bank’s affairs. The appellees argue that the rule applicable to the president of a bank would apply as well to the cashier and since there was no advance authorization of remuneration for the plaintiff’s services either as president or cashier, he cannot now claim compensation. With this contention, we cannot agree. The case of Shore v. United Auto Supply Co., 107 W. Va. 66, 146 S. E. 890, is authority for the proposition that the services of a general manager of a corporation are lienable under this statute, and further, for the holding that merely because the general manager happened also *746 to be a director and stockholder of the corporation and his services as director would not be lienable, that fact does not prevent his claiming a lien for his services in the capacity of general manager. It would seem from our examination of the cases that the rule in question is applicable to the usual and ordinary officers of all corporations, that is to say, the president, vice-president, secretary, treasurer and directors, and that if any of these officers are to be compensated for their services to the corporation as such, there must be a contractual understanding in advance of the performance of the services. Otherwise, they are not to be compensated. This seems to be so regardless of the extent of the services that they perform as such officers. We think that there is a close analogy in the nature of the services to be performed by the general manager of an ordinary corporation to those of a cashier of a bank. At all events, we see no basis upon' which a valid distinction between the two in this connection can be drawn. The appellee urges that the amount voted was allowed as compensation for “these positions” and therefore that the amount allowed as cashier cannot be separated from the amount that must have been allowed as president, and therefore, that neither amount Is lienable. We cannot agree with this contention because the rule invoked rests upon the fact that ordinarily the officers of private corporations perform only slight and perfunctory services. The cashier of a bank, on the other hand, is not such an officer and usually devotes his entire time to the affairs of the bank. We are therefore of the opinion that the only fair construction to place upon the allegations of the bill is that the compensation is attributable to the position in which the plaintiff performed compensable services, and not to the position in which he may have performed nominal duties not compensable.

Under this same heading, it is urged that from the bill and exhibits it is apparent that the order of the directors of the bank, entered on the 8th day of July, 1933, was entered when the bank was actually insolvent and *747

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Farley v. Zapata Coal Corp.
281 S.E.2d 238 (West Virginia Supreme Court, 1981)
Felsenheld v. Bloch Bros. Tobacco Co.
192 S.E. 545 (West Virginia Supreme Court, 1937)

Cite This Page — Counsel Stack

Bluebook (online)
188 S.E. 486, 117 W. Va. 742, 1936 W. Va. LEXIS 147, Counsel Stack Legal Research, https://law.counselstack.com/opinion/charter-v-doddridge-county-bank-wva-1936.