Dibrell v. Central Nat. Bank

• Decision Date: 23 March 1927
• Docket Number: (No. 7085.)
• Parties: DIBRELL v. CENTRAL NAT. BANK OF SAN ANGELO.
• Court: Texas Court of Appeals

293 S.W. 874

DIBRELL v. CENTRAL NAT. BANK OF SAN ANGELO.

(No. 7085.)

Court of Civil Appeals of Texas. Austin.

March 23, 1927.

Rehearing Denied April 20, 1927.

Appeal from District Court, Tom Green County; J. F. Sutton, Judge.

Action by Will C. Dibrell against the Central National Bank of San Angelo. Judgment of dismissal, and plaintiff appeals. Reversed and remanded.

Snodgrass & Dibrell, of Coleman, for appellant.

Collins, Jackson & Sedberry and James Cornell, all of San Angelo, for appellee.

BLAIR, J.

Appellant sued appellee bank to recover $32.045.68 actual damages and $30,000 exemplary damages for breach of its contract to give appellant 12 months' credit on the purchase price of some cattle and sheep which he purchased from appellee, and for certain frauds and torts committed in connection with the sale and delivery of said live stock. A general demurrer and several general exceptions to appellant's petition were sustained, and upon his refusal to amend a judgment of dismissal was entered, from which this appeal is perfected.

The following statement by appellant of facts pleaded is substantially correct:

"That in October, 1922, he was in possession and control, under leases running to April 30, 1929, of 17,871 acres of grazing lands, located in Tom Green and Schleicher counties, Tex., which were suitably fenced, improved, and equipped and had ample grass, weeds, and water for the grazing and handling of a large number of cattle and sheep, and which were then understocked and clean and free of contagious and infectious live stock diseases.

"That appellant was inexperienced in the sheep business, and wholly unacquainted with the sheep disease known as scabies, and did not possess sufficient knowledge to be able to detect said disease in sheep. That appellee's managing officers were fully informed of all said facts before dealing with appellant.

"That about October 6, 1922, appellee verbally agreed with appellant that, if appellant would buy cattle and sheep from appellee to stock his ranches, appellee would credit him for the purchase price for a period of 12 months, with interest at 8 per cent. per annum, but that on account of banking rules he should execute his note due in 6 months, and that at its maturity the bank would take his renewal note for another 6 months and thus give him 12 months' credit. It was also then agreed that appellant would buy the John Sheen cattle at $30 per head, with calves thrown in, and would go with appellee's officers to look at such sheep as the bank wished to sell, and when he had completed buying sheep and deliveries were made he would then execute one note and chattel mortgage covering total price of all the live stock bought to be due in 6 months after its date, and that the bank would take a renewal note of said indebtedness at its maturity for another 6 months. Under said agreement, appellant about October 9, 1922, bought from the bank 1,196 head of sheep known as the Jim Craig sheep, for $6,456, and a few days later he bought from the bank 1,494 head of sheep known as the Robbins sheep, for $8,326, and 42 bucks known as the Tom Adams bucks, for $630. A few days later the bank delivered the Jim Craig sheep into appellant's clean pastures where they were mixed and mingled with the other sheep. Shortly after it was discovered that said Jim Craig sheep were infected with scabies in advanced stage of development and a quarantine was declared. Though appellant had examined the sheep at time of purchase, he had not discovered their diseased condition and was wholly ignorant of their infection until after the sheep had been delivered on his ranch and mingled with the other sheep purchased.

"The appellee bank's officers and agents were experienced sheep men, and knew that the Craig sheep had been exposed and were infected with scabies at the time the sale and delivery was made to Dibrell, and purposely concealed the fact from him.

"That appellee bank, in making the promise of 12 months' credit at 8 per cent., acted fraudulently and deceitfully for the purpose of inducing appellant to buy the cattle and sheep from said bank in that, at the time of making said promise, the appellee intended not to perform it, but to wholly disregard it; that said promise was the inducing cause of Dibrell making purchases from the bank; that he relied thereon, and did not and could not discover that said promise was a fraud and deceit until April, 1923, when appellee repudiated its credit agreement.

"That after discovery of the diseased condition of said sheep, appellant executed a 6-month note and chattel mortgage upon the further express contract of the bank that it would pay all loss and damages caused Dibrell by said disease and infection.

"That thereafter in April, 1923, appellee notified appellant to liquidate and that it would not accept a renewal of his note at its maturity, but would insist on payment. Dibrell did not have and could not then borrow money from other sources to pay his indebtedness because his pastures were in quarantine and his sheep infected with scabies; and he was so financially involved and embarrassed on account of such quarantine and scabies that he could not obtain outside financial aid, nor engage in litigation with appellee to compel performance of its agreement, and he was compelled to accede to the bank's demand for liquidation, and he did sell his live stock at a sacrifice in order to pay appellee, and did thus pay appellee long before the expiration of the 12 months' credit period agreed upon."

Other facts pleaded and necessary to a decision herein will be stated in the opinion.

We also adopt appellant's analysis of the grounds upon which his petition discloses that he sues, as follows:

"(1) To recover for breach of verbal contract to give 12 months' credit on purchase price of live stock.

"(2) To recover in action ex delicto for fraud and deceit in making promise of 12 months' credit on purchase price of livestock, with concurrent intention of nonperformance.

"(3) To recover for breach of contract to pay all loss and damage caused by sale and delivery into appellant's clean pastures of sheep infected with scabies.

"(4) To recover in action ex delicto for fraud and tort, committed by appellee in selling and delivering to appellant in his clean pastures sheep infected with scabies."

To that portion of the petition which seeks a recovery for breach of the verbal contract to give 12 months' credit on the purchase price of the live stock, the court correctly sustained the general demurrer and several of the general exceptions. The general demurrer should have been sustained because the transaction or agreement alleged was clearly violative of the federal banking laws and as to which the parties stood in pari delicto. It is alleged that appellee bank agreed to credit appellant for the purchase price of the livestock for 12 months, "but that on account of banking rules plaintiff should execute his note due in 6 months, and that at its maturity defendant would take his renewal note for another 6 months and thus give plaintiff twelve months' credit."

It is further alleged that the note was "merely executed by plaintiff in part performance of his verbal contract with defendant for the use of defendant in the conduct of its banking business, and with the full understanding between the parties that the real and subsisting contract between the plaintiff and defendant was an original verbal contract for 12 months' credit on the purchase price of all the live stock purchased, and that said papers were being executed in order to enable to make necessary legal showing of its assets to the bank supervising authorities."

There is no allegation of fact which would show appellant blameless, or that he was an innocent victim to the illegal contract, but the contrary appears, for it is alleged that the note was executed purposely and "with the full understanding between the parties that the real and subsisting contract" was "for 12 months' credit," and that the note was executed to enable appellee "to make necessary legal showing of its assets to the bank supervising authorities." To prove these allegations of his petition it would necessarily require appellant to show that he had, "with full understanding," contracted in violation of the provisions of article 9772, U. S. Comp. St., which makes it a crime punishable by imprisonment for any bank officer to make, or for any other person to aid him to make, any false statement of the assets of the bank to the supervising authorities.

The rule is well settled in this state that courts will not assist in any manner the enforcement of an illegal contract, where the party seeking to enforce requires any aid from the illegal transaction to make out his case. Hall v. Edwards (Tex. Com. App.) 222 S. W. 167; Read v. Smith, 60 Tex. 379; Beer v. Landman, 88 Tex. 450, 31 S. W. 805; Wiggins v. Bisso, 92 Tex. 219, 47 S. W. 637, 71 Am. St. Rep. 837; Frost v. Plumb, 40 Conn. 111, 16 Am. Rep. 18; 2 Elliott, Con. 1061; McBlair v. Gibbes, 17 How. 232, 15 L. Ed. 132; Stone v. Robinson (Tex. Com. App.) 234 S. W. 1094; Oliphant v. Markham, 79 Tex. 547, 15 S. W. 569, 23 Am. St. Rep. 363; Raywood Co. v. Erp & Wright, 105 Tex. 161, 146 S. W. 155.

The general exception, that, under the allegation of facts, the oral contract to purchase the live stock, and to pay for them in 12 months after the last sale is completed, appears to be in contravention of the statute of frauds, was also properly sustained. It is alleged that the contract to purchase the cattle and sheep and to pay for them in 12 months after the last sale was completed was made October 6, 1922; that pursuant to the contract appellant purchased some of the cattle on October 9, 1922, and other cattle and sheep a few days later; and that still later and after the purchases were completed, on November 1, 1922, appellant executed his note, due May 1, 1923, in payment...