Court Opinion

ID: 4003315
Source: CourtListenerOpinion
Date Created: 2016-07-06 11:04:45.040379+00
Date Added: 2024-06-11T14:19:03.072485
License: Public Domain

In my opinion, the amended bill is faulty in that it does not show that the pledge of the notes, aggregating thirty thousand dollars, was based upon a definite and enforcible contract between the Mound City Bank and Stamping Company. The bill alleges that the Bank was advised (by the plaintiff by implication) that Stamping Company had no authority to informally make the loan, but that if it made the loan it would have to be approved by the plaintiff's board of directors. Passing over the Bank's contention that, because the bill alleges that the plaintiff's charter empowered it to loan surplus funds *Page 198 
and fails to allege that the loan constituted funds of that kind, the transaction was ultra vires, we find that the bill alleges that on March 9, 1933, at the office of H. C. Ogden, one of the plaintiff's directors, those directors met and adopted the following resolution:
    "Upon motion duly seconded and carried, the President and Treasurer were authorized to loan the Mound City Bank, Moundsville, W. Va., Fifteen Thousand ($15,000.00) Dollars 4th Loan 4 1/4 Liberty Bonds, taking the bank's note for that amount bearing six (6%) per cent interest, endorsed personally by four bank directors; said note to be secured by collateral of two to one in trust deeds, with the understanding that note will be paid just as soon as bank obtains a loan from the Reconstruction Finance Corporation; payment to be made in bonds, the same as loaned."
The bill also alleges that on May 17, 1933, the receiver of the Bank furnished plaintiff what purported to be an undated copy of a "resolution" adopted by the Bank's board of directors which the bill sets forth verbatim as follows:
    "On motion of Mr. Henderson, seconded by Mr. McNinch that this bank borrow from the U.S. Stamping Co. $15,000.00 Liberty Bonds and that we secure this loan of bonds by putting up the following notes: Monroe County Lumber Co. $12,500.00, W. W. and J. W. Henderson $9,000.00 and J. E. Bloyd, Jr., $5,000.00.
    "This note was signed by Mound City Bank and endorsed by J. A. Bloyd, W. W. Henderson, F. A. McNinch and C. H. Hunter. These bonds were later to be used with the National Exchange Bank of Wheeling to secure $15,000.00 currency. No further business. Meeting adjourned."
The only other allegations of the bill bearing upon a contract entered into between Stamping Company and the Bank relate to what "was understood", "was represented", *Page 199 
and to the manner in which the Bank failed and refused to carry out its obligation under the contract; this despite the showing of the bill that, "The said Bank was advised that the plaintiff corporation had no authority informally to make said loan."
To my mind, the bill of complaint fails to allege a mutual agreement or, in the terminology of primary contract law, a "meeting of minds". According to the bill's allegations, it is unavoidable to treat the resolution of Stamping Company's board of directors as being the only authorized offer made by Stamping Company. Any contract or offer of this nature made by Stamping Company required the approval of that company's board of directors. There is no allegation contained in the bill that the board of Stamping Company ever approved a contract, the only allegation being that its directors did approve its unaccepted offer. The allegations of the bill plainly show that the Bank did not accept the offer of Stamping Company.
Attention has already been directed to the fact that the Bank's resolution materially varied in terms from that of Stamping Company. To my mind, the utmost that can be said is that the resolution of Stamping Company's board amounted to a proposal, and the only further substantial allegation is that the Bank made a counter proposal of equal dignity; this for the reason that both parties, according to the bill, knew that a formal agreement on the part of Stamping Company was required before either would be bound. There is no allegation that the directors of Stamping Company acted upon any counter proposal that the Bank made, nor that Stamping Company made any other than the one proposal, which the Bank, according to the bill's allegations, failed to accept. Based upon the allegations of the bill, there could, of course, be no binding contract concerning the collateral other than that which was entered into by express agreement.
Furthermore, Stamping Company, under the bill's averments, is to be regarded as an intended pledgee. Delivery *Page 200 
of possession of the property intended to be pledged was necessary in order to create a lien securing the loan.Williams v. Gillespie, Pt. 4 Syl., 30 W. Va. 586, 5 S.E. 210;First Nat. Bank v. Harkness, 42 W. Va. 156, 164, 24 S.E. 548, 32 L.R.A. 408; Downey v. Fire Insurance Co., 77 W. Va. 386,397, 87 S.E. 487. A chancery court will not apply the maxim which treats that as done which ought to have been done, when the rights of third persons have intervened. Jones on Collateral Securities (3d Ed.), sec. 28, p. 36, et seq. The appointment of the receiver for the Bank fixed the status of its creditors with the property which it is contended had been pledged still in the Bank's possession.
The term "unjust enrichment" is entirely too expansive and indefinite to be used in a clarifying sense. Therefore, I shall not undertake to comment upon it.
Reference to 44 West Virginia Law Quarterly 139 will make readily available both the Virginia and West Virginia cases bearing upon pledges.
Of course, Stamping Company, even though not treated as a pledgee, could still collect the note it accepted made by the Bank and endorsed by four of its directors. The allegations of the bill disclose a plain legal remedy and do not show that it has been pursued.
For these reasons, I cannot accord with the court's opinion.