Case Name: Thane v. Merchants' & Farmers' Bank of Dumas
Court: Arkansas Supreme Court
Jurisdiction: Arkansas
Decision Date: 1928-02-20
Citations: 177 Ark. 66
Docket Number: 
Parties: Thane v. Merchants’ & Farmers’ Bank of Dumas.
Judges: Hart, C.J., and Kirby, J., dissent.
Reporter: Arkansas Reports
Volume: 177
Pages: 66–79

Head Matter:
Thane v. Merchants’ & Farmers’ Bank of Dumas.
Opinion delivered February 20, 1928.
E. E. Hopson and Coleman .& RiddicJc, for appellant.
Palmer Danaher and Mike Danaher, for appellee.

Opinion:
Kirby, J.,
(after stating the facts). It being conceded, as well as shown by the undisputed testimony, that the stock of the appellee bank owned by appellant was turned over to the bank and sold and the proceeds thereof deposited in the bank, to which appellant was in no wise indebted, the burden of proof was upon the bank to show that it was not indebted to or liable for the payment to the appellant, the owner of the stock, for the amount realized from the sale thereof and received by the bank.
The testimony discloses that there was no intention on the part of appellant to make a gift or donation of his stock or its proceeds to the directors of the bank or to the bank itself, and that the transaction did not constitute a gift or donation to either the directors or the bank, as the chancellor correctly held.
While there is no conflict in the testimony as to what was actually done so far as the stock being turned over to the Bank Commissioner, the sale thereof for the par value, aiid the deposit in the bank of the proceeds realized therefrom, are concerned, the evidence is in sharp conflict as to the intention of the parties in'concluding the transaction.
The other directors apparently had in mind the intention not to attempt to rehabilitate the bank or restore its reserve so long as appellant, to whom some of them were unfriendly, was connected therewith in an official capacity. They refused to assist appellant in borrowing any money to restore the reserve, well knowing that he had exhausted his credit and resources in procuring funds to keep the other banks, which he had organized and been connected with, in operation. They insisted that he surrender his stock to the bank, and told the Commissioner, and through him the appellant, that, unless it was done, they would make no effort to keep the bank open and in operation, and that it would be closed by the Commissioner, as he had notified them would be done. They also knew that the appellant had refused to turn over his stock to the Commissioner or the bank as a gift or donation, or to consider the proposal of one of the directors, made at the Dumas meeting, that hé might be allowed fifty per cent, of the value of the stock upon compliance with this request or demand of the directors.
Appellant states lie never bad any intention of making a gift or donation of Ms stock or its proceeds to either the bank or the other directors, and that, in surrendering it for sale that the proceeds might he used in restoring the reserve for the continued operation of the •bank, he made no such gift or donation, and that the bank was liable for the repayment to him of the value of the proceeds of his stock deposited therein.
The directors contend, on the other hand, that but for their understanding that the stock was surrendered to be sold and the proceeds deposited in the profit and loss account for the bank's benefit, without any liability on its part for the repayment of the value thereof to appellant, the owner of the stock, all of which was known to appellant, they would not have sold or purchased it and continued the operation of the bank, and that appellant is estopped by his conduct about the transaction to claim any liability against the bank for payment of the proceeds realized from the sale of his stock.
There is sharp conflict in the testimony about the intention of the parties, but, as already said, the burden of proof was upon appellee, having received the proceeds of the sale of appellant's stock in its bank, to show that it was done under such conditions as relieved it from liability therefor, or to return the amount thereof to appellant. It cannot be said that it has discharged such burden. After the negotiations had proceeded to the point of delivery of the stock to the Bank Commissioner, upon agreement to be sold at not less than par and the proceeds deposited in the bank, increasing the reserve' to the legal requirement, one of the directors insisted that the agreement be reduced to writing, which was done by the Bank Commissioner, and signed by the appellant.
The other directors claimed that the Bank Commissioner was their agent, or represented them as well as the bank, in his negotiations with the appellant for the delivery of the stock, and the transfer thereof was written by him at their request, and signed and executed by the appellant in their presence. This writing, under the usual rule, should he construed most strongly against the party by whom it was prepared, and, in any event, it must be held to contain the agreement of the parties aibout the transfer.
The claim of the officers of the bank and the bank itself that the proceeds of the stock sold should be deposited in the bank in the profit and loss account, without liability for its repayment, is certainly not supported by the written memorandum or assignment, which appears to be complete and free from ambiguity, and the parol testimony should not have been heard to engraft a condition upon such a writing not expressed therein. In any event the finding of the chancellor that the agreement was made by appellant to allow the proceeds of the sale of his stock to be deposited to the profit and loss account, without liability on its part to the owner of the stock, and that the conduct of appellant in making the transfer of the stock under the conditions was such as to mislead the -appellee bank and its officers and estop appellant from claiming any of the proceeds from the sale of his stock deposited in the bank, is contrary to the preponderance of the testimony.
Appellant's continued refusal to agree to any terms by which his -stock was to be used as a gift or donation to the bank or its directors, his statement that no such agreement was made, and the written memorandum or assignment of the stock in accordance with the agreement, shows a preponderance of the testimony in appellant's favor, in our opinion.
The chancellor erred in holding otherwise, and the decree is reversed, and the cause remanded with directions to enter a decree for appellant in accordance with this opinion.