May, Sanders McLaurin, for appellants.
Appellees' motion challenged the correctness of the chancellor's action in permitting an amendment of the pleadings. It is unnecessary to discuss separately the several grounds of the motion to dismiss as every question has been definitely settled adversely to the contentions of defendants by the statutes and supreme court decisions of our own state. See section 558, Hemingway's Code (section 775, Code of 1906). These statutes were given due and proper consideration in allowing the amendment of the pleadings in the form of the subsequent pleading called "supplemental bill." Adams v. Lucedale Commercial Co., 113 Miss. 608 .
It was expressly held in the early case of Dyer v. Brittan, 53 Miss. 270 : "An amendment can be made, changing the form of action." See also Haines v. Haines, 98 Miss. 83 ; Middleton
v. Davis, 105 Miss. 152 , 62 So. 164. If it shall be argued that a supplemental pleading should be stricken out, upon the ground that the old technical rule required an amended bill to be filed within the time allowed for amendments and a supplemental bill after time for amendment has elapsed, a complete answer to such contention is found in the statutes and supreme court decisions above cited. 21 Ency. Pl. Pr., pages 13, 14; McCuller v. Mink, 121 Miss. 829 , 83 So. 907.
The complainant's theory presented to the court formerly was that she became the purchaser and owner of the note sued on and was, therefore, entitled to proceed against the makers and indorsers of said paper. The court held that the facts proved were insufficient to
warrant the finding that the defendants received the money paid by complainant and having received it and given nothing for it, they are now responsible to complainant and accountable for the money so received. It was also admitted that the funds paid were trust funds, as evidenced by the check in payment, which was signed by Mrs. M.M. Rice, as administratrix. The defendants (appellees) are, therefore, liable also to account for these funds as trust funds and to restore them to the proper custodian; namely, the administratrix and guardian, being one and the same person. Bank v. McPherson, 102 Miss. 852 , 59 So. 934.
The Peoples Bank, through its cashier, B.T. Roland, as agent for defendants (appellees) knew that it was accepting trust funds in exchange for the notes involved, and its knowledge is imputed to its principal, the defendants (appellees). Wilcox v. Routh, 2 S. M. 476; Ross v. Houston, 25 Miss. 591 , 59 Am. Dec. 231; Edwards v. Hillier, 70 Miss. 803 , 13 Sol. 692; Allen v. Pool, 54 Miss. 323 ; Cameron v. Lewis, 56 Miss. 76 .
R.C. McBee, for appellees.
The bill filed by Mrs. Rice is named "Supplemental Bill," and nowhere is it spoken of as an amendment to her original bill. It attempts to aver matters and things that existed at the time of the filing of the original bill and is, therefore, hopeless as a supplemental bill. "A supplemental bill is an addition to, or rather a continuation of, the original bill and its proper office is to allege material facts which have occurred since the filing of the original bill." Griffith's Miss. Ch. Practice, 428; Wright v. Frank, 61 Miss. 32 .
Counsel in their brief seem to abandon the idea that their supplemental bill, denominated by them as such at the time of the filing, is one in fact and treat it as an amendment. We concur in this conclusion, but Carter v. Kimbrough, 122 Miss. 543 . The making of a
supplemental bill into an amendment is, however, a total abandonment of the case made in the lower court, and is in itself a sufficient reason for sustaining the motion to strike. It has long since been decided by this court that this is the proper procedure. Moss v. Davidson, 1 S. M. 112; Walker v. Gilbert, 7 S. M. 456.
We have never taken the position that merely because the case was reversed, that the bill was not subject to amendment, nor that the court below has not full power "to allow any amendment to be made to the pleadings, which it had power to allow before the judgment or decree appealed from was rendered." This is the rule laid down in the case of Haines v. Haines, 98 Miss. 830 , 54 So. 433, but the point we do insist upon is that, treating this bill as an amendment, it was never proper to make it.
The supplemental bill fails to show that Webb and Rice knew that trust funds were being used by the bank. Counsel have cited Bank v. McPherson, 102 Miss. 852 , as being the law governing the wrongful use of trust funds. From quotations adopted by them, it appears that "whenever a trustee has been guilty of a breach of trust, and has transferred the property, by sale or otherwise, to any third person, the cestui que trust has full and perfect right to follow such property into the hands of such third person unless he stands in the position of a bona fide purchaser for valuable consideration without notice." This case, however, does not sustain the supplemental bill, because the suit is not brought by the cestui que trust in the present instance, and Webb and Jennings "stand in the position of a bona-fide
purchaser for value without notice." For all that appears in the supplemental bill, there is not an intimation that Webb and Jennings knew anything about the transaction between Mrs. Rice and Roland, acting for the bank. This knowledge must appear. It must be both alleged and proved. Perry v. Oarman, 15 L.R.A. (N.S.) 310; 129 Am. St. Rep. 1020; 26 R.C.L. 1362. Notice is necessary,
and until there is notice, no case is made against such persons.
While counsel seek a reversal upon the theory that their supplemental bill is an amended bill, they cannot complain in this court, because the lower court took them at their word in calling this pleading a supplemental bill and refused to consider it as an amendment. This pleading was presented as a supplemental bill, and as such was stricken from the files. It is hopeless as a supplemental bill, and for that reason, if for no other, the decision of the lower court should be affirmed.
Mrs. Rice, having elected to proceed on the theory that she had purchased the note, cannot now recover the trust funds.
Confessedly, Mrs. Rice, acting as administratrix of the estate, sought to make an investment of the trust funds, which was outside of the scope of her right and duty as administratrix, and for which she obtained no order of the court. She pleaded her wrongful and unlawful act in the supplemental bill. Meyer v. Meyer, 106 Miss. 638 -652. And when an administrator so acts, he acts at his peril, is liable to be charged with all losses, is not permitted to make any profits, and is chargeable with compound interest. 18 Cyc. 241; Gully v. Dunlap, 24 Miss. 410 ; Crowder v. Shackleford, 35 Miss. 321 ; French v. Davis, 38 Miss. 167 ; Meyer v. Meyer, 106 Miss. 638 -652.
Mrs. Rice, by bringing the suit originally against the maker and indorsers of the note, elected thereby to take the proceeds of the property. By her first suit, she got all that she was able to obtain under the law, and that was a judgment against Givens. She cannot now, even in the same suit, or by different suit, having obtained this judgment, keep it and keep the note, and at the same time, sue to recover the trust funds. 39 Cyc. 534-535.
This case should be affirmed.
Argued orally by Geo. W. May, for appellant, and R.C. McBee, for appellees.