Ferry v. Ramsey
Ferry v. Ramsey
Opinion of the Court
delivered - the opinion of the Coúrt.
These writs of error are brought by Ferry, formerly a director of the Butler County State Bank, of Kansas,, and by the execiitor of a deceased director/ to set aside judgments against them in suits by depositors im the bank, on the ground that the statutes of: Kansas purporting to establish the directors’ liability were contrary to the Fourteenth Amendment of the Constitution of the United States. The statutes were upheld by the State Court. 122 Kans. 675. Ibid. 691.
The plaintiffs, (the defendants in error,) made deposits in the. bank at a time when it was insolvent but had not' closed its doors. The statutes under which the directors were held liable to depositors and which are attacked here are Revised Statutes of Kansas, 1923, Chapter 9, ¶¶ 163, 164; The former of these makes it unlawful for any director to assent to the reception of deposits by his bank after he shall have had knowledge of the fact that it is insolvent. The law makes it the duty of the directors to examine into thé affairs of the bank, and, if possible, to know its condition, and in case of his failure to do as required, he is to be held to have had knowledge of the insolvency of the bank, and is made ‘ individually responsible for such deposits so received.’ By. 9-164, in suits for deposits against officers “ the fact that such banking institution was so insolvent or in failing., circumstances at the time of the reception of the deposit charged to have been so received . . . shall be prima facie evidence of such knowledge and assent to such deposit ... on the part of such officer . . • so charged therewith,” It is said that 163 denies due pro
It is said that the liability is founded by the statute upon the directors’ assent to the deposit and that when this is the ground the assent cannot be proved by artificial presumptions that have no warrant from experience. But the short answer is that the statute might have made the directors personally hable to depositors in every case, if it had been so minded, and that if it had purported to do so, whoever accepted the office would assume the risk. The statute in short imposed a liability that was less than might have been imposed, and that being so, the thing to be considered is the result reached, not the possibly inartificial or clumsy way of reaching it. If without any mention of assent or presumptions or prima facie evidence the statute had said: ‘Every director of a bank shall be personally liable to depositors for every deposit accepted by the bank after it has become insolvent,’ all objections would be met by the answer, ‘You took the office on those terms.’ The statute would be none the worse if it allowed a defence in the single case of the defendants having made an honest examination and having been led to believe that the bank was solvent. The mention of assent and evidence of knowledge cannot be pressed to conclusions that the statute manifestly does
The Supreme Court of Kansas affirmed judgments against Ferry and reversed judgments in favor of the executor of Kramer based on Kramer’s incapacity to know of or assent to the deposits in' question and ordered judgments against him. In so doing it violated no provision of the Constitution of the United States.
Judgments affirmed.
Dissenting Opinion
dissenting.
In respect of the prima facie presumption created by § 9-164 of the Kansas statute, I am unable to agree with the opinion of the Court insofar as that section affects the cases against Harris, Executor of the Will of Kramer, deceased. The evidence shows very clearly that, at the: time the deposits in question were made and for a long time prior thereto, Kramer was physically incapable of investigating and ascertaining the condition of the bank, Or of assenting to the reception of deposits by the bank, because of his serious illness which resulted in his death after undergoing a major surgical operation. It was substantially so found by-the jury in one of the cases and by the trial court in the others. Under these circumstances,
“ It is ‘ essential -that there shall be some rational connection between the fact proved and the ultimate fact pre-. sumed, and that thé inference of one fact from proof of another shall not be sq unreasonable.as to be a purely arbitrary mandate.’ ”•
To me it seems dear that there, is no rational relation between the fact of insolvency and the fact here presumed, namely,- assent to the reception of a. particular deposit. Rather, thé rational presumption is the other way, since •the law itself requires that an insolvent bank shall not receive deposits; and' the assent of the director thereto would be ah assent to a violation of law. I do not quarrel with the suggestion that it was within the constitutional power of the state to create ah -absolute liability against a director if, while insolvent, tlié bank of which he is a director receive a deposit. But this the state did not do.
Reference
- Full Case Name
- FERRY v. RAMSEY Et Al.; HARRIS, EXECUTOR, v. RAMSEY Et Al.
- Cited By
- 31 cases
- Status
- Published