Hook v. Bank of Leland

Anderson, J., delivered the opinion of the court. Appellant, J. H. Hook, filed his bill in the chancery court of Washington county against appellees, Bank of Leland and Mrs. Maggie S. Helm, to have surrendered and canceled a certificate of stock in said bank standing in her name, the beneficial interest in which belonged to ap — 190 — pellant by inheritance from his deceased wife, Mrs. Sallie Hook, and to have said bank to reissue to appellant a certificate in his name for said stock and in default of such surrender, cancellation, and reissuance to recover of appellee bank the value of the shares of stock represented by said certificate with accumulations thereon including dividends. The cause was tried on an agreed state of facts and a decree rendered dismissing appellant’s bill, from which he prosecutes this appeal. The sole question in the case is whether the six-year statute or the ten-year statute of limitations applies. If the former, it is barred; if the latter, it is net. Appellees contend that there was concurrent jurisdiction of this cause in the courts of common law and in the courts of equity, and therefore under section 3124, Code of 1906 (Hemingway’s Code, section 2488), applying in such cases the statute of limitations governing in the courts of law to the courts of equity — the six years’ statute — appellant is barred. On the other hand, appellant argues that his cause of action and remedy are purely and exclusively equitable, and therefore the ten-year statute of limitations, section 3125, Code of 1906 (section 2489, Hemingway’s Code), governing equity causes is applicable. The controlling facts necessary to be understood are as follows: M. B. Smith was vice president, cashier, and had the active management of appellee Bank of Leland. At the same time he was guardian of the estate of bis daughter, a'minor, the wife of appellant J. H. Hook. Appellant claims the stock in question by inheritance from his said wife, she having died intestate leaving him surviving as her sole heir. The beneficial interest in said stock belonged to the estate of his said daughter, who had died when the bill in this case was filed, but the certificate stood in the name of her said father as guardian and so appeared on the books of appellee bank. In 1909 the said M. B. Smith had a final settlement as such guardian — 191 — for appellant’s said wife, and was discharged as snch by the chancery court. He continued after her death, however, to hold the title to said stock in his name as her guardian until March 18,1914, when without any authority of law, while so in charge of the affairs of appellee ■bank, he caused said stock to be transferred on the books of said bank to appellee, his other daughter, Mrs. Maggie S. Helm, and had a certificate of stock in said bank issued to her for sixteen shares, which included the eight shares which had theretofore stood in his name as guardian for the said Mrs. Helm. The bill in this case was filed within ten years after such cancellation and transfer of said stock on the books of appellee bank, but more than six years thereafter. The gravamen of appellant’s bill is that a corporation whose stock is transferable only on its books is the custodian of the shares therein of its shareholders and that the relation of trustee and cestui que trust exists between it and its shareholders, and as such trustee it is the duty of the corporation to protect its shareholders against a wrongful transfer of their stock, and a shareholder whose stock has been wrongfully transferred to another on the books of the corporation with the knowledge and consent of such corporation may maintain a suit in equity against such corporation to have.his stock restored to him, and in default thereof to recover its value with accumulations. The principles upon which appellant’s cause is based are well established. M. & O. R. R. Co. v. Humphries (Miss.), 7 So. 522, not officially reported; Ann. Cas. 1913E, note 1175; Western Union Tel. Co. v. Davenport, 97 U. S. 369, 24 L. Ed. 1047; Perry on Trustees, section 242; Pomeroy’s Equity Jurisprudence, vol. 3, sections 1411, 1412. If the relationship which existed between appellant and appellee Bank of Leland constituted a trust “not — 192 — cognizable by the courts of common law,” then by its express provision section 3125, Code of 1906 (section 2849, Hemingway’s Code), is the statute of limitations applicable. That statute provides, among other things: “Bills for relief, in case of the existence of a trust not cognizable by the courts of common law and in all other cases not herein provided for, shall be filed within ten years after the cause thereof shall accrue and not after.” This statute applies to. either express or implied trusts. Stanton v. Helm, 87 Miss. 287, 39 So. 457; Mitchell v. Bank, 98 Miss. 658, 54 So. 87. Under the authorities first above cited the relationship existing between appellant’s wife and appellee, said Bank of Leland constituted a “trust not cognizable by the courts of common law.” The legal title to the stock was in Mrs. Hook’s father, her guardian, M. B. Smith, the vice president, cashier, and manager of appellee bank. Mrs. Hook had only the beneficial or equitable interest in the stock. Appellee Bank of Leland was the trustee under the principles laid down in said authorities, for its shareholders to prevent a wrongful transfer and cancellation of their shares of stock. It is argued by appellees that Mrs. Hook, and after her death her husband, appellant, had a remedy at law by mandamus to force appellee Bank of Leland to cancel said certificate of stock standing in the name cf M. B. Smith, as guardian for Mrs. Hook, and reissue the same in the name of the beneficial owner, or sue appellee bank in trover for the wrongful conversion of said stock and recover its value with accumulations. And ha ving a remedy at law the six-year statute of limitations applies. In considering this question it should be borne In mind that Mrs. Hook had nothing whatever except an equitable interest in said stock. She never owned it in the sense of owning the legal title thereto; thai was ifi her father. — 193 — In other words, she had only an equitable estate in said shares of stock. It is settled by the authorities as it appears without dissent that mandamus will not lie to enforce equitable rights. 26 Cyc. 155 and 319; Foote v. Noxubee County, 67 Miss. 156, 6 So. 612. And the same is true of the remedy of trover for wrongful conversion. An equitable title alone is not sufficient foundation of the remedy of trover. 38 Cyc. 2049. . It is argued by appellees that appellant’s cause of action accrued in 1909 when his wife reached her majority, and when her father, M. B. Smith, as her guardian, made his final settlement and was discharged as such by the chancery court, and that the applicable statute of limitations is section 3098, Code of 1906 (Hemingway’s Code, section 2462), providing that all actions against guardians and the sureties on their bonds by wards shall be commenced within five years next after their majority. The certificate of stock in question stood in the name of M. B. Smith as guardian until March 18, 1914,. when it was canceled and other stock reissued in its place to his daughter, the appellee Mrs. Helm. The bill was filed within ten years of that date. There, of course, existed between the wife of appellant and .her guardian, her father, M. B. Smith, a relation of trust. As such guardian he was trustee and she was cestui que trust. Notwithstanding the final settlement of said guardianship in 1909 the statute of limitations did not begin to run against Mrs. Hook in favor of her father until their interest became-adverse. The relationship between them was an express subsisting acknowledged trust. As to such a trust the statute of limitations does not begin to run as long as the trust is acknowledged. In order to set the statute in motion there must be some express declaration or act by the trustee adverse to the rights of the cestid que trust. Cooper v. Cooper, 61 Miss. 676; Stanton v. Helm, 87 Miss. 287, 39 — 194 — So. 457. Until the contrary is shown, the presumption is that the fact that Mrs. Hook’s guardian, her father, held this stock in his name until it was canceled and other stock issued to appellee Mrs. Helm was the result of her permission. In other words, in subordination to the rights of Mrs. Hook. We hold, therefore, that no cause of action arose until there was a breach of trust on the part of said guardian and appellee bank which took place on March 18, 1914, consisting in the cancellation and reissuance of said stock to the other daughter, appellee Mrs. Helm. The five-year statute, section 3098, Code of 1906 (Hemingway’s Code, section 2462), has no application to this cause. This is not an action by a ward against a guardian and the sureties on his bond. The guardian had made his final settlement and had been discharged some years before the wrongful transfer of the stock in question. The guardian simply continued in subordination to the rights of the ward to hold the title to this stock until he breached his trust by said wrongful transfer. No statute of limitations was set in motion until then. We hold therefore that the ten-year statute of limitations, section 3125, Code of 1906 (Hemingway’s Code, section 2489), governs. Reversed and remanded.