Cinco Exploration Co. v. American Bank of Commerce

• Court: Texas Civil Court of Appeals
• Writing for the Court: MOORE; McKAY
• Citation: Cinco Exploration Co. v. American Bank of Commerce, 529 S.W.2d 852 (Tex. Ct. App. 1975)
• Decision Date: 13 November 1975
• Docket Number: No. 853,853
• Parties: CINCO EXPLORATION COMPANY, Appellant, v. AMERICAN BANK OF COMMERCE et al., Appellees.

Page 852

529 S.W.2d 852

CINCO EXPLORATION COMPANY, Appellant, v. AMERICAN BANK OF COMMERCE et al., Appellees.

No. 853.

Court of Civil Appeals of Texas Tyler.

Nov. 13, 1975.

Rehearing Denied Dec. 4, 1975.

Brantly Harris, Prappas, Caldwell & Moncure, Houston, F. Wilbert Laster, Potter, Lasater, Guinn, Minton & Knight, Tyler, for appellant.

Clarence N. Stevenson, Fly, Moeller & Stevenson, Victoria, Mike Hatchell, Ramey Flock, Hutchins, Grainger & Jeffus, Tyler, for appellees.

MOORE, Justice.

This is an appeal from a summary judgment. Appellant, Cinco Exploration Company (Cinco), brought suit against American Bank of Commerce of Victoria (American) and Citizens First National Bank of Tyler (Citizens) for the sum of $30,000.00 which Citizens allegedly wrongfully disbursed contrary to Cinco's written instructions. While American was originally a party defendant, the trial court rendered judgment in its favor from which no appeal was taken and therefore further mention of the issue between American and Cinco is unnecessary. Citizens answered the suit with a general denial. ¹ Thereafter, Cinco and Citizens both filed motions for summary judgment under Rule 166--A, Texas Rules of Civil Procedure. After a hearing the trial court granted Citizens' motion for summary judgment ane entered a take nothing judgment against Cinco.

We reverse and remand for a trial on the merits.

The material facts are not in dispute. On November 9, 1973, Cinco Exploration Company entered into a letter agreement with Paul B. Goodgame and S. Harry Bergman by which Goodgame and Bergman agreed to assign an oil and gas lease to Cinco. In substance the agreement provided that Goodgame and Bergman would use their best efforts to obtain two amendments to the lease to be executed by the lessors. The instrument provided that upon receipt of satisfactory evidence of acceptance of the lease amendments by the landowners, Cinco would pay Goodgame and Bergman the $30,000.00. The letter agreement further provided that the agreement would terminate if for any reason the $30,000.00 was not paid on or before November 18, 1973. ² Goodgame and Bergman executed the lease assignment assigning the lease to Cinco and attached it to a documentary draft for $30,000.00 which they placed with Citizens First National Bank of Tyler, Texas, on November 16, 1973, for collection. Citizens forwarded the draft to its correspondent American Bank of Commerce of Victoria, Texas, for presentment and collection. American received the documentary draft on November 19, 1973, and presented the draft to Cinco for payment. Cinco advised American that the draft was not in compliance with the letter agreement because the two lease amendments were not enclosed and that Cinco had not received any other evidence that the amendments had been accepted by the lessors. The following day, acting pursuant to Cinco's instructions, with funds supplied by Cinco, American wrote a letter to Citizens enclosing a cashier's check payable to Citizens in the sum of $30,000.00, together with a copy of the letter agreement relating to the assignment of the oil and gas lease. The assignment was not returned. Omitting the formal parts, the letter stated 'Enclosed is a Cashier's Check for payment of your site draft dated November 16, 1973 payable to Mr. Paul B. Goodgame and Mr. S. Harry Bergman pursuant to article eight of the letter agreement dated November 9, 1973 between Mr. Goodgame, Mr. Bergman and Cinco Exploration Company (copy enclosed). Your payment is contingent upon performance of all other articles of the letter agreement and will constitute an unreserved acceptance of the lease assignment upon performance of all articles in the subject letter agreement, including, but not limited to the execution of the lease amendments A and B indicated in article four of the letter.'

Upon receipt of the letter and cashier's check Citizens inquired of Bergman whether he had done everything he should do; upon an affirmative answer, Citizens deposited the $30,000.00 to the account of Goodgame and Bergman. Thereafter, on January 18, 1974, American's attorney wrote Citizens stating that it had been advised by Cinco that the provisions of the agreement had not been performed by Bergman and Goodgame. American's attorney returned the assignment executed by Bergman and Goodgame and demanded return of the $30,000.00 to American. When Citizens refused, Cinco instituted the present suit against Citizens on March 27, 1974.

Appellant seeks a reversal of the summary judgment on the ground the Citizens' summary judgment proof fails to establish that no material issue of disputed fact remained to be determined by the court or jury.

A summary judgment is appropriate only if the summary judgment record establishes a right thereto as a matter of law. Thus, it is well established that a defendant moving for a summary judgment assumes the negative burden of showing as a matter of law that the plaintiff had no cause of action against him. Gaddis v. Smith, 417 S.W.2d 577, 582 (Tex.1967); Neigut v. McFadden, 257 S.W.2d 864, 868 (Tex.Civ.App.--El Paso 1953, writ ref'd n.r.e.). Where a summary judgment is granted upon the motion of the defendant, as here, the question is whether the summary judgment proof establishes as a matter of law that there is no genuine issue of fact as to one or more of the essential elements of the plaintiff's cause of action. Gibbs v. General Motors Corporation, 450 S.W.2d 827 (Tex.1970).

Cinco contends that when Citizens accepted the $30,000.00 cashier's check and undertook disbursement in accordance with American's letter of transmittal, Citizens became the agent of Cinco as a matter of law. Based on this premise, Cinco contends that as its agent, Citizens had a duty to follow the instructions contained in American's letter of November 23, 1973. Cinco argues that since the undisputed summary judgment proof shows that Citizens failed to require Bergman and Goodgame to furnish the lease amendments or satisfactory evidence that the amendments were acceptable to the lessors, Citizens breached its duty as agent, and thus became liable to Cinco as a matter of law. Cinco further contends that the summary judgment proof raised certain fact issues which could only be determined upon a trial. Consequently, Cinco urges that the court erred in granting a summary judgment in favor of Citizens.

Citizens undertakes to uphold the summary judgment on the ground that no agency relationship existed between it and Cinco and therefore it owed no duty and breached no duty to Cinco. Alternatively, Citizens argues that if it owed a duty the summary judgment proof conclusively shows it discharged its obligation to Cinco.

Generally speaking a delivery of money or property to a bank for application to a defined purpose does not constitute a 'special deposit' as that term is usually employed, but ordinarily it partakes of the nature of a special deposit in that the title to the thing remains in the depositor and the bank becomes either an agent, bailee or trustee of the depositor, depending upon the agreement of the parties. 9 C.J.S. Banks and Banking § 275, p. 570; Hudnall v. Tyler Bank and Trust Co., 458 S.W.2d 183 (Tex.1970); Shaw v. McCord, 18 S.W.2d 200 (Tex.Civ.App.--Eastland 1929, no writ); First National Bank of Ranger v. Price, 262 S.W. 797 (Tex.Civ.App.--El Paco 1924, no writ); McBride v. American Ry & Lighting Co., 60 Tex.Civ.App. 226, 127 S.W. 229 (1910, no writ). Where a depositor makes a deposit for a special purpose, he may direct the manner in which the funds are to be disbursed by the bank and if the bank does not refuse the deposit, its consent to handle the funds in such manner will be implied as a matter of law. 10 Am.Jur.2d Banks, sec. 342, p. 306; City State Bank v. National Bank of Commerce, 261 S.W.2d 749 (Tex.Civ.App.--Fort Worth 1953, writ ref'd n.r.e.). However, if the agreement of the bank is to be implied by its acceptance of a deposit accompanied by written limitations imposed by the depositor, the writing should set forth clearly what the bank is required to do. Citizens National Bank of Dallas v. Hill, 505 S.W.2d 246 (Tex.1974).

In the instant case, it is without dispute that Citizens accepted Cinco's funds and disbursed the same to Bergman and Goodgame. Therefore, Citizens will be held to have impliedly consented to Cinco's proposal as set forth in American's letter of November 23, 1973. Thus, the rights, duties and obligations of the parties are made to turn upon what was intended by...