Baker v. Ashe

• Decision Date: 24 March 1891
• Court: Texas Supreme Court
• Parties: BAKER <I>et al.</I> v. ASHE.

16 S.W. 36

BAKER et al. v. ASHE.

Supreme Court of Texas.

March 24, 1891.

Appeal from district court, Harris county.

Goldthwaite & Ewing, for appellants. Brashear & Ashe, for appellee.

GAINES, J.

This is a companion case to that of Seale v. Baker, reported in 70 Tex. 283, and 7 S. W. Rep. 742, and of Giddings v. Baker, ante, 33, (decided at a former day of this term.) The appellee, a depositor in the City Bank of Houston, sued the appellants, as directors, alleging that he had been induced by false representations made by the defendants to deposit moneys in the bank, which by reason of its insolvency had been lost. The allegations in the petition are substantially the same as those in the case of Seale v. Baker, supra.

We think there was error in the proceedings of the court below which requires a reversal of the judgment, and therefore, in disposing of this appeal, we will consider only such questions as may arise upon another trial. It appeared during the course of the trial that, when a receiver was appointed for the bank, the plaintiff proved up his indebtedness against it, and that at the time of the trial he had received dividends amounting to 37½ per cent. of his claim; and there was evidence tending to show that the assets, if properly administered, would pay a large portion of the debt, in addition to the dividends previously paid. Such being the evidence, the court instructed the jury that, in the event they found for plaintiff, the measure of his damages was the amount of the principal of his debt, less the dividends paid him. Both parties assign this charge as error. The appellant contends, in effect, that the plaintiff was entitled to strict compensation for his loss only, and that this was properly measured by the amount of the deposit, less the dividends paid, and also the value of the balance of the claim against the estate in the hands of the receiver. The appellee claims that he is entitled to interest upon the amount of his deposit as a part of his damages. We think the court erred as is claimed by both appellants and the appellee in their respective assignments. The defendants, if they made themselves liable by reason of the alleged representations, did not make themselves liable as sureties or guarantors of the plaintiff's debt. They were wrongdoers, and were liable only to make good his loss. That loss was the difference between the amount of his deposit and the value of his claim after the bank had closed its doors. Peek v. Derry, 21 Amer. & Eng. Corp. Cas. 272; Whittier v. Collins, 15 R. I. 90. Consequently, in our opinion, the defendants were entitled to have the value of the claim subtracted from the amount of the deposit. A difficulty suggests itself. At what time ought the value of the claim against the bank to be assessed? In Peek v. Derry, supra, it is held that it ought to be assessed at the time the loss accrues, which in this case would be when the bank closed its doors. We think, however, where collections have been made, a more accurate and satisfactory measure of the damage is to deduct the payments, and then the value of the claim at the time of the trial. The plaintiff's compensation will not be full without the allowance of interest, and we are of opinion that interest should be allowed as a part of the damages.

The appellants also present the following assignments of error: "(7) The court erred in its general charge, in instructing the jury that the defendants were liable if by their acts, or by false representations generally, or to the plaintiff, to the effect that the bank was a sound financial institution, able to carry on and conduct the banking business, when, in fact, it was not, and was known so to be by the directors, or ought to have been known to them, and would have been known to them, had they have exercised the care and diligence they could have and should have exercised in reference to the affairs of such bank." "(11) The court erred in giving the special charge No. 2 asked by the plaintiff, which declares the law to be that the plaintiff is entitled to the verdict, and that defendants are liable to him, if they knowingly made, with intent to defraud the public generally, false representations of the solvency of the City Bank, without regard to whether plaintiff ever relied or acted upon such representations, and without...