Court Opinion

ID: 3411001
Source: CourtListenerOpinion
Date Created: 2016-07-05 19:28:47.911037+00
Date Added: 2024-06-11T13:51:06.566359
License: Public Domain

Appellants complain that the court in its opinion made certain misstatements of facts, to wit: that in speaking of appellant company, the court stated: "Its stockholders were the stockholders of the bank." The court did not so declare, the opinion reading: "Its stockholders were stockholders of the bank." J. Paul Evans testified that various members of the Evans family "were all the stockholders" of the bank. Aside from his father and himself, L.L. Evans, Jr., testified that the other stockholders of the company were "all children" of L.L. Evans. The company's stock-book introduced as Intervenor, Evans', Exhibit 15, shows every share issued to be standing in the name of some member of the Evans family.
L.L. Evans, Jr., did testify that some 199 shares of the company stock had been delivered to Ireland  Company as collateral; and the stock-book shows such a pledge of 159 shares, but it shows no transfer, and the witness testified that Ireland did not wish to take his stock direct. That the family controlled both bank and company is abundantly evidenced by the testimony of J. Paul Evans above cited, together with the further testimony of L.L. Evans, Jr., that he actively managed the company in consultation with his father and brother.
It is insisted that at the time the surety bond was signed, L.L. Evans and L.L. Evans, Jr., were not officers of the First National Bank. Such is not the fact disclosed by the record. L.L. Evans, Jr., testified that his father and himself became respectively president and vice-president upon *Page 171 
the consolidation. This consolidation took place on April 26, 1922. The bond in question was signed on May 1st, five days later. And it is nowhere shown or even suggested that such officers had ceased to function.
Finally, it is urged that respondent county did not rely upon the validity of the company's undertaking, but knew within an hour after its execution that the obligation was ultra vires.
The only testimony on this point is that of L.L. Evans, Jr., who testified generally that he had been advised by the depositing units that the bond was ultra vires. Pinned down to individual instances, he was unable to name any person whom the record shows to have been a member of a unit board.
[4] Counsel earnestly insist that, respondent was fixed with a duty to inquire into the company's authority to sign the bond. We do not think so. The company by its board of directors had solemnly declared such action to be in the furtherance of its business; and the county had a right to rely upon the truth and good faith of that declaration.
The petition for rehearing is denied.
Givens and Taylor, JJ., concur.
Wm. E. Lee, C.J., dissents.