Court Opinion

ID: 3980124
Source: CourtListenerOpinion
Date Created: 2016-07-06 10:37:07.0848+00
Date Added: 2024-06-11T14:18:07.719198
License: Public Domain

On Appellants' Motion for Rehearing.
In compliance with appellants' request, the following corrections and explanations are made in the recitals appearing in the former opinion by Associate Justice DUNKLIN, with additions thereto.
The fifty-seven checks on which the cross-action was based were all drawn on the appellee City National Bank, and on the reverse side of each check was a notation indicating that there was attached thereto a voucher describing the purposes for which the checks were drawn, including payments to the bank upon obligations of the Royalty Company; purchase and improvement of the Marlboro addition; and purchase of oil royalties. And, according to vouchers which had been attached thereto originally, but detached before the checks were presented to the bank, and the books and records found in Peckham's office, the oil royalties, for which checks were so given, had theretofore been purchased in Peckham's name and with his own funds, and some of them he did not in fact own at that time. The further statement that one check was given for purchase of W. H. Peckham's interest in the Marlboro addition should have read that it was given for Geo. W. Peckham's interest in that addition. All the checks were deposited to the account of Geo. W. Peckham, but made payable to the bank itself.
The statement that "on April 10, 1926, Geo. W. Peckham conveyed his one-half interest to the Wichita Royalty Company, subject to the debts outstanding against it," was not intended as a finding that by that instrument the title passed to the Royalty Company and that the company assumed the outstanding indebtedness against the property. In subsequent portions of the opinion, it clearly appears that the instrument was never delivered to any one in behalf of the company, but was kept and concealed by Scannell under instructions from the trustee Peckham until after Peckham's death, and the stockholders never knew of it until after the institution of this suit.
Another statement in the opinion reads as follows: "Peckham also received credit on his personal account for $6,000 realized from oil investments belonging to the Royalty Company which had theretofore been deposited to his personal credit in the Security National Bank."
The testimony bearing on that statement is exceedingly involved, but the following statement in the motion with reference thereto will be accepted as correct: "One of the checks was for $6,000.00 to the Security National Bank where Peckham received personal credit without accounting therefor in any manner upon the record. Another and a totally different item of $6,000.00 was evidenced by a $6,000.00 cashier's check issued by the Wichita State Bank  Trust Company and represented the proceeds of a royalty sale by the trust, but which $6,000.00 was *Page 683 
deposited to Peckham's private account with the City National Bank and unaccounted for to any extent whatever. Other items totalling $6,048.00 for which Peckham received personal credit with the appellee bank and made no account thereof whatsoever were obtained by Peckham from the appellee bank as escrow agent in the trust's sale of a royalty, checks by the purchaser being deposited with the escrow contract in the bank, the checks being made payable to Wichita Royalty Company and Peckham, the bank delivered to the purchaser the deed of assignment to the royalty interest, the check totalling $6,048.00 payable to the trust was delivered to Peckham and personal credit given him therefor."
The further statement that Scannell "had charge of the office" of the Royalty Company in Wichita Falls is withdrawn. It is manifest from other portions of the opinion that Geo. W. Peckham was sole trustee of the company with supreme control of its affairs and the office of the company in Wichita Falls, and also its books and records kept by him in that office. Scannell was employed by Peckham as secretary and treasurer of the company, and, as testified to by him, he "kept books, records, and did detail work for the Wichita Royalty Company" under supervision and direction of Peckham. Scannell was not a stockholder during that period, and Peckham's appointment of him as secretary and treasurer was therefore in violation of the provisions of the declaration of trust under which Peckham acted as trustee. And Scannell further testified that all he did was under Peckham's instructions, one of which was that the books and records were to be kept in a safe, and that no one was to be allowed to see them. The statement that Scannell "also made monthly reports to the 1,300 stockholders" was incorrect, since, according to his uncontroverted testimony, reports to the stockholders were made annually and not monthly, and were prepared by Peckham and mailed out by Scannell under his directions.
Complaint is made of this further statement in the opinion:
"Nor have appellants presented any complaint in behalf of the stockholders that the failure of Scannell to sooner seek recovery of damages claimed in the cross-action was prompted by fraud on his part and participated in by the bank."
That statement had reference to the cross-action filed by Scannell for and in behalf of the Royalty Company, which, in the opinion of the writer, did not seem to embody any charge of fraud on his own part in his failure sooner to seek a recovery of damages claimed in the cross-action. However, counsel for appellants have cited his testimony that, after George W. Peckham's death, he joined with W. H. Peckham, brother of George W. Peckham, and with Harrell's assent thereto, in an agreement to conceal from the stockholders the fraud theretofore practiced by George W. Peckham, to the end that his estate might not suffer from the demands of the stockholders for damages based thereon.
The motion for rehearing also contains a request for additional findings. The additional findings so requested cover several typewritten pages, many of which are reflected in the findings in the opinion already filed. As shown in that opinion, the facts recited were ample to sustain a finding by the jury that a fraud was practiced by Geo. W. Peckham upon the stockholders he represented, to their injury. The opinion also embodied a recital of what was thought to be the principal facts on which appellants relied to show that the bank through its duly authorized officers and Harrell, individually, were guilty of fraudulent participation in the fraud of the trustee Peckham. The additional findings sought include a recital of evidence of numerous transactions in detail by Peckham, all tending to show fraud practiced by him on the stockholders of the Royalty Company. That evidence further shows that those transactions were consummated through deposits in and withdrawals from the appellant bank; and the action of the bank in accepting such deposits and honoring Peckham's checks thereon is relied on in further support of the charge made of fraudulent collusion by the bank through its duly authorized officers and Harrell, individually, with Peckham in his fraud. But the majority of this court are of the opinion that such additional evidence, at all events, is of no greater weight to sustain the conclusion sought than the facts recited in the former opinion; and that all the evidence on that issue, taken as a whole, is insufficient of itself to establish a prima facie case of liability on the part of appellees. And a recital in these conclusions of the additional evidence set out in the motion would unduly extend this opinion, and is unnecessary, since that evidence appears in the statement of facts and therefore none the less available for consideration by the Supreme Court in its final determination of this appeal.
After due consideration, the motion for rehearing is overruled by the majority of this court; Associate Justice LATTIMORE dissenting, as before. *Page 684