Opinion
No. 35437.
October 25, 1943. Suggestion of Error Sustained in Part December 6, 1943.
1. BANKS AND BANKING.
Where oil, gas, and mineral lease and written instructions with remittances of rentals to depository bank contemplated a deposit to lessor's credit and bank accepted the remittances under the lease and receipted for them under the instructions, bank became a party to the lease and instructions and they were binding upon bank.
2. LIMITATION OF ACTIONS.
The three year limitation statute does not begin to run against a cause of action against a bank to recover a deposit until the depositor has made demand on the bank for the money by check, order, draft, or other writing (Code 1930, sec. 2299).
3. LIMITATION OF ACTIONS.
Where lessor, her administrator, and her heirs' grantees had not demanded of depository bank five years' rental deposited by lessee's assignee to lessor's credit and bank had paid such rentals on forged receipts after lessor's death and some six years had elapsed after the first year's rental was so paid, action against bank was not as to three years' rentals barred by the three-year limitation statute (Code 1930, sec. 2299).
4. EQUITY.
Where lessor died intestate and her heirs conveyed leased realty in two tracts, bill by lessor's administrator and grantees against depository bank for rentals deposited by lessee's assignee to lessor's credit and paid out on forged receipts after lessor's death was not "multifarious" since the rights of the parties flowed from a common source.
ON SUGGESTION OF ERROR. (In Banc. Dec. 6, 1943.) [15 So.2d 774. No. 35437.]BANKS AND BANKING.
Where bank in which rentals under oil, gas and mineral lease were deposited was chargeable with interest thereon, it should begin as of date demand was made upon bank for payment of the money.
APPEAL from chancery court of Harrison county, HON. D.M. RUSSELL, Chancellor.
J.F. Galloway, of Gulfport, for appellants.
It is submitted that either the six or ten year statute of limitations applies in this case rather than the three year statute, for the reason that everything about this transaction was in writing. The lease was in writing, signed by the parties. The checks or drafts were in writing, signed by the Texas Company, and receipted for by the bank. The funds were not deposited to the account of Mrs. B.T. Ladnier, but were held by the bank under the escrow agreement set out in paragraph four of the lease. The payment of the money under the forged endorsement was also in writing.
Code of 1930, Secs. 2292, 2299, 2316.
The bank acted in accordance with the trust agreement contained in the lease, to be applied specially in payment of the rentals due on the lease. The bank treated these payments to it as a special deposit and not a general deposit, because it kept it separate from the funds of the bank, did not deposit it to the credit of anyone whatsoever, and when called upon by the forger for payment paid it without any investigation whatever. It therefore appears that the bank held these funds in trust for the use and benefit of Mrs. B.T. Ladnier, her heirs or successors in title, and not otherwise. And it was an express trust, also, all of the terms of which were in writing and acted under.
Sawyer v. Conner, 114 Miss. 363, 75 So. 131; Johnson, Bank Examiner, v. Johnson, 134 Miss. 729, 99 So. 369; Mitchell v. Bank of Indianola, 98 Miss. 658, 54 So. 87; Milam v. Paxton, 160 Miss. 562, 134 So. 171; Fowlkes v. Lea, 84 Miss. 509, 36 So. 1036; Cock v. Abernathy, 77 Miss. 872, 28 So. 18; Washington v. Soria, 73 Miss. 665, 19 So. 485; Masonic Ben. Ass'n of Stringer Grand Lodge v. First State Bank of Columbus, 99 Miss. 610, 55 So. 408; Love v. Little, 167 Miss. 105, 148 So. 646; Code of 1930, Sec. 2315; 2 Michie on Banks Banking, p. 1291; 3 R.C.L. 519, "Banks".
The administrator of Mrs. B.T. Ladnier's estate was entitled to the rents for the year of her death. The sale to Letts of one-half of the property was made on February 8, 1935. The sale to E.U. Ladnier was on August 11, 1937, of the other half of the property. The lease covered the whole property, and was an interest in the property itself, as the courts have so often held, that is, it was not personal property. Under the conditions above stated, there was a privity of interest between the parties arising out of the original lease. Any rights they had arose from this lease, and each was entitled to their proportionate share therein, arising from their respective deeds. Their situation with regard to one another is like that of a number of bond holders secured by a mortgage or trust deed. Each could sue separately or together, as best suited their interest. The courts favor a combination of such holders of interest arising from one instrument, it prevents a multiplicity of suits, saves time of the parties and the courts, as well as a great deal of costs.
Geo. R. Smith, of Gulfport, for appellee.
The suit is governed by the three year statute of limitations.
Federal Land Bank of New Orleans v. Collins, 156 Miss. 893, 127 So. 570; Foote v. Farmer, 71 Miss. 148, 14 So. 445; Wally v. L.N. Dantzler Lumber Co., 119 Miss. 700, 81 So. 489; First National Bank of Laurel v. Johnson, 177 Miss. 634, 171 So. 11; Gulf Refining Co. v. Bagby, 200 La. 258, 7 So.2d 903; Conner v. Sawyer, 114 Miss. 363, 75 So. 131; Love v. Little, 167 Miss. 105, 148 So. 646; Johnson, Bank Examiner, v. Johnson, 134 Miss. 729, 99 So. 369; Minor v. McDowell (Miss.), 113 So. 576; Code of 1930, Sec. 2299; 34 Am. Jur. 71.
The decree of the lower court should be reversed, for the reason that there is clearly a misjoinder, both as to parties and causes of action.
Board of Mayor and Aldermen of Town of Louisville v. Armstrong et al., 113 Miss. 385, 74 So. 285; Newton Oil Mfg. Co. v. Sessums et al., 102 Miss. 181, 59 So. 9; Griffith's Mississippi Chancery Practice, Sec. 138.
Appellants acquired no rights in lease money by failing to give notice of acquisition of such rights as required by lease.
Sims et al. v. Mitchell et al. (Tex.), 44 S.W.2d 1056.
Appellants are barred by laches and estoppel.
Matteson v. Bank of Italy, 275 P. 998; 9 C.J.S. 348. Geo. R. Smith, of Gulfport, for appellee, on suggestion of error.
No interest could have accrued on said sums until demand for payment was made upon the bank by the appellants and cross-appellees and such demand was refused.
Citizens' State Bank v. Webster-Choctaw Drainage District, 153 Miss. 793, 121 So. 826; 9 C.J.S. 599; 7 Am. Jur. 286.
If the bank should pay interest on said sums from the date the sums were received it would be violating the express regulations of the State Banking Department adopted under authority of Chapter 146, Laws of 1934, and Chapter 165, Laws of 1936, and subject the bank to penalties.
This appeal involves the questions (1) whether the three year statute of limitations applies, and (2) whether the bill is multifarious.
On August 2, 1934, Mrs. B.T. Ladnier, a widow, executed to Geo. D. Hunt an oil, gas and mineral lease on 320 acres of land in Harrison County, Mississippi.
It is the usual lease of this character and contains this recital: ". . . this lease shall terminate as to both parties, unless on or before such anniversary date Lessee shall pay or tender to Lessor or to Lessor's credit in Hancock County Bank at Gulfport, Mississippi, (which bank and its successors are Lessor's agent, and shall continue as depository for rentals payable hereunder, regardless of the changes of ownership of said land or the rentals) . . ." the sum of eighty dollars as rentals. It further provides that such payments may be made by lessee's check or draft mailed, or delivered to, lessor, or to said bank. It also states that the contract may be assigned, in whole or in part, by either party, their heirs, successors and assigns, and that no change in the ownership of the land, rentals or royalties, however accomplished, shall enlarge or diminish the rights of lessee, and no change in ownership is binding upon lessee for any purpose until the lessee is furnished a certified copy of the recorded instrument, or other legally authenticated written evidence of such change of ownership. The lease was duly recorded.
On October 20, 1934, Hunt assigned this lease to the Texas Company.
Mrs. Ladnier, the lessor, died November 19, 1934, intestate. Willard R. Ladnier, one of appellants, was appointed administrator of her estate.
On February 8, 1935, the heirs of Mrs. B.T. Ladnier conveyed by warranty deed to Percy Letts, one of appellants, 160 acres of the land.
On August 11, 1937, said heirs, by warranty deed, conveyed the remainder of the land to appellant, E.U. Ladnier, who was also one of the heirs of Mrs. B.T. Ladnier, deceased. Both deeds were recorded. Neither of said deeds mentioned the foregoing lease; but no contention is made that they did not convey to the grantees therein all interest and right of the lessor in the lease.
On each anniversary of the lease, beginning August 2, 1935, to and including August 2, 1939, the Texas Company, by check payable to the Hancock County Bank, remitted to that bank the annual rentals, aggregating $400. This law suit is over those rentals. The remittances were accompanied by a writing which stipulated they were "for a deposit to the credit of . . ." Mrs. B.T. Ladnier, made under the above mentioned lease for annual extensions thereof for the year named in the writing. This written remittance instructed the Hancock Bank to "show credit on your books accordingly."
The Texas Company also mailed to the lessor, in due time, to the address given by her in the lease, notice that it was making these remittances to the Hancock Bank according to the provisions of the lease.
These notices were received by a Mrs. Elvenia Ladnier, a daughter-in-law of Mrs. B.T. Ladnier, who, each year, personally presented the notices to the Hancock Bank; represented herself to be Mrs. B.T. Ladnier, demanded, and was paid, the money, whereupon she forged the name of Mrs. B.T. Ladnier to receipts therefor.
The rentals due August 2, 1940, were paid to Letts and E.U. Ladnier, grantees in the two foregoing deeds, and no question is here raised about that. Neither the administrator nor the grantees in the deeds had actual knowledge of the existence of said lease until the latter part of 1939, when they made demand on the Texas Company for the rentals which Mrs. Elvenia Ladnier had received.
Until that time neither the Texas Company nor the bank had any actual notice of the death of Mrs. B.T. Ladnier, although it is contended the circumstances were such as to charge the bank with constructive notice of the death of Mrs. Ladnier, which becomes unimportant in view of the conclusion we have reached.
Willard Ladnier, as administrator of the estate of Mrs. B.T. Ladnier, and Letts and E.U. Ladnier, grantees in the two deeds, brought this suit against the Hancock Bank and the Texas Company to recover the four hundred dollars, with interest, which the bank had paid to Mrs. Elvenia Ladnier.
The chancellor held that there was no liability on the part of the Texas Company; that the bank was liable but that Section 2299, Mississippi Code 1930, requiring actions on open accounts and unwritten contracts to be brought within three years after the cause of action accrues, was applicable, and, the bill having been filed in November, 1940, that the statute precluded any recovery against the bank for payments made prior to August 2, 1938; that, therefore, the administrator was not entitled to recover anything and that Letts and E.U. Ladnier were entitled to recover each one half of the payments of 1938 and 1939, with legal interest on each from August 2nd of the year in which the payments were made. A decree was entered accordingly, from which the administrator and Letts and E.U. Ladnier prosecute a direct, and the bank a cross, appeal.
No serious contention is made here that the chancellor was in error on the fundamental proposition of liability of the bank for paying out the money on these forgeries, and the cross-bill of the bank presents no reason for changing or modifying that liability in this case.
On the question of limitation of action, while it is contended by appellants that the bank was a trustee and that its liability rested upon written instruments, it is certain that this lease and the written instructions with the remittances contemplated a deposit, either special or general, to the credit of Mrs. B.T. Ladnier in the bank. It is so expressly stated in both. In addition to the provisions of these documents above set out, the remittance instructions told the bank to date its receipts for the rentals the day it received them "and not the date of actual entry," and that "Endorsement of the check by the parties to whose account it is to be deposited is neither necessary nor desired." The bank accepted the money under the terms of the lease and receipted for it under the terms of the remittance instructions. It thereby became a party to both and the provisions of both were binding upon it in so far as they affected its duties and liability. Treating them as general deposits is the most favorable position for the bank which can be assumed under this arrangement. Even as to general deposits, there is a difference of authority as to whether the three or the six year statute applies to actions for their recovery. But assuming these were general deposits and that the three year statute applies, the bank is not thereby relieved of the duty to pay this money, for the reason that the statute does not begin to run until the depositor has made demand on the bank for the money by check, order, draft or other writing. 7 Am. Jur., pp. 348 and 349, secs. 488 and 489; Anno. 19 Am. Dec. 420; Masonic Ben. Ass'n v. First State Bank, 99 Miss. 610, 55 So. 408. No such demand was made here either by Mrs. B.T. Ladnier, her administrator, or the grantees in the deeds.
The bill is not multifarious. The rights of the parties flow from a common source.
It follows that appellant Letts is entitled to one-half of the rentals paid during the years 1935 to 1939, with legal interest thereon from August 2nd in each respective year; that appellant Willard Ladnier, administrator of the estate of Mrs. B.T. Ladnier, deceased, is entitled to recover one-half of such rentals for the years 1935 and 1936 and 1937, with like interest, and that appellant E.U. Ladnier is entitled to one-half of such rentals for the years 1938 and 1939, with like interest, and judgment will be entered here accordingly.
So ordered.
The judgment herein charged appellee bank with legal interest from the respective dates the rentals were received by it from the Texas Company. It is now suggested that if the bank is chargeable with interest, it should begin December 11, 1939, the date demand was made upon the bank for payment of the money. This point was not argued on the original appeal, but we think the contention is well taken. The suggestion of error is sustained to that extent, and the judgment will be modified so as to charge appellee with interest from above date.
Suggestion of error sustained in part.