Court Opinion

ID: 3520701
Source: CourtListenerOpinion
Date Created: 2016-07-05 22:32:24.938276+00
Date Added: 2024-06-11T13:26:10.599148
License: Public Domain

ON SUGGESTION OF ERROR.
This case was affirmed on a former day of the court, and the appellants now suggest that we erred in affirming the action of the court below in disallowing a portion of its set-off claimed under the trust agreement referred to in the original opinion. In this they are correct; and that portion of the opinion will be withdrawn in so far as it affects this case, or as a precedent for future cases.
The error in the original opinion was one of fact, and will be hereinafter made to appear. The facts on which the claim to this set-off is based are substantially as follows: On the 12th day of June, 1928, more than two years before the bank was taken over by the appellee, the board of directors adopted a resolution (which is set out in 151 So. 367). Pursuant to this resolution some of the appellants paid the bank in money, and others gave it their promissory notes, which, together, aggregated one hundred thirteen thousand seven hundred ten dollars and ninety-eight cents. The bank delivered to *Page 238 
the trustees, under the trust agreement, notes and securities, the par value of which aggregated one hundred seventy-eight thousand four hundred seventy-nine dollars and twenty-seven cents. The trustees thereafter collected a part of the amount due on a large number of these notes. They paid a small portion thereof to the appellants and deposited the other in the bank as collected. When the first collections were made, the money realized therefrom was deposited to the credit of the trustees, but this continued for only a short time when the account, with the consent of the trustees, was changed and thereafter designated on the bank's books as "directors' account," and was not thereafter checked on by the trustees. It constituted what is designated as a revolving account, and the greater part, if not all, of the money deposited therein seems to have been used by the bank to retire other paper due the bank. The error in the former opinion was in stating that this deposit continued in the name of the trustees at all times subject to their check. Some time after these notes were delivered to the trustees, all of whom were officers of the bank, one of them, without consultation with the others, or with any other person, separated them into two portions, one containing notes aggregating one hundred thirteen thousand seven hundred ten dollars and ninety-eight cents, and mentally allocated them to the purposes of the trust. The court below held that only the notes allocated by the trustee to the purposes of the trust became subject thereto, allowed the appellants' claim to a set-off to the extent of the collections on these notes, but disallowed it as to collections on the other notes.
The appellee's main contention seems to be that it was the intention of the bank in delivering these notes to subject only a sufficient part of them to aggregate at their face value the amount of money paid to the bank by the stockholders under the trust agreement, and that *Page 239 
the trustee had the right to allocate them accordingly. This, as hereinbefore stated, was the theory on which the court below acted, but it is not supported by the evidence; for it is clear therefrom that all the notes were turned over to the trustees under the trust agreement. It is true that the bank was under no obligation to deliver to the trustees notes in excess of the par value of the amount paid it by the appellants under the trust agreement; but it had the right to do so, and, when it did, the notes became subject to the terms of the trust.
It may be that to the extent of the notes of par value in excess of the amount paid the bank by the appellants, the trust was voluntary; but, if so, the bank was nevertheless bound thereby, had no right thereafter to revoke it without the consent of the trust beneficiaries, and the trustees could deal with it only in accordance with the terms of the trust, for the rule is: "Unless a power to revoke or modify is expressly reserved, or the creation of the trust is affected by fraud, duress, or mistake, the settlor has no power to revoke or modify the trust, even though it was created without consideration." Bogert on Trusts, p. 248; 1 Perry on Trusts (7 Ed.), sec. 104 p. 132; 26 R.C.L. 1207; 65 C.J. 340; Nelson v. Ratliff, 72 Miss. 656, 18 So. 487. When the bank received from the trustees the money collected by them under the trust, as hereinbefore set forth, it held it under the terms of the trust subject thereto.
This brings us to the question of the appellants' right to set off the amount due them by the bank under this trust against their liability to the appellee, under section 3815, Code 1930, to the amount of their stock in bank. In answering this question we will confine ourselves strictly to the contentions of the appellee, and will not inquire into other matters that might relate thereto. The appellee admits the appellants' right of set-off as to the collections on the notes allocated to the trust by the trustees, and contends that the remainder *Page 240 
of the notes did not become subject thereto. This contention, as hereinbefore set forth, is not maintainable; and, if that is the only reason why the set-off should not be allowed, then the appellants are entitled to it. The former judgment herein will be set aside in so far as it disallows the set-off here claimed, the decree of the court below reversed, and decree will be rendered here in accordance with this opinion.
So ordered.