Elliott v. First State Bank of Ft. Stockton

• Decision Date: 22 January 1913
• Citation: 152 S.W. 808
• Parties: ELLIOTT v. FIRST STATE BANK OF FT. STOCKTON.
• Court: Texas Supreme Court

Page 808

152 S.W. 808

ELLIOTT v. FIRST STATE BANK OF FT. STOCKTON.

Supreme Court of Texas.

January 22, 1913.

Error to Court of Civil Appeals of Fourth Supreme Judicial District.

Action by the First State Bank of Ft. Stockton against D. S. Elliott and another. From a judgment of the Court of Civil Appeals (135 S. W. 159) reforming a judgment for plaintiff and rendering judgment, defendant Elliott brings error. Reversed and remanded.

Chas. T. Haltom, W. C. Jackson, and Howell Johnson, all of Ft. Stockton, for plaintiff in error. O. W. Williams, of Ft. Stockton, for defendant in error.

PHILLIPS, J.

This was a suit by the First State Bank of Ft. Stockton against D. S. Elliott, as the drawer, and O. H. Kilpatrick, as the indorser, of a check drawn by Elliott in Kilpatrick's favor on July 11, 1908, for the sum of $1,790 on the City National Bank of Corpus Christi, which on the same day was cashed by the plaintiff for Kilpatrick, the payment of which was refused by the City National Bank of Corpus Christi on presentation. The check was given by Elliott to Kilpatrick in completion of a land purchase. Prior to its date, Elliott's father had deposited to Elliott's credit in the City National Bank of Corpus Christi the sum of $1,890 for his use in paying Kilpatrick for the land, and to enable him to make the purchase, under such circumstances as to make it a special deposit for that purpose, as found by both the trial court and the honorable Court of Civil Appeals.

In closing the land transaction at Ft. Stockton, Elliott first gave Kilpatrick a check for $1,890, which Kilpatrick requested the plaintiff to cash. Its cashier declined to cash the check, unless in some way assured that it was good, but offered to take it for collection. A discussion of the matter resulted in the plaintiff sending the Corpus Christi bank the following telegram: "Fort Stockton, Texas, July 10, 1908. City National Bank, Corpus Christi, Texas. Will you pay check D. S. Elliott, $1,890.00? Rush answer. [Signed] First State Bank." It received the following telegram in reply: "Corpus Christi, Tex. 7/11/08. First State Bank, Ft. Stockton, Texas. D. T. Elliott has deposited with us $1,790.00 to pay check drawn by D. S. Elliott favor of O. H. Kilpatrick. [Signed] City National Bank." Thereupon it appears that D. S. Elliott gave to Kilpatrick two checks upon the Corpus Christi bank, one for $100, which was paid on presentation and is not in issue; the other being the check in suit, for $1,790, which, as stated, was cashed for Kilpatrick by the plaintiff. Payment of the check was refused by the bank because of its having been served with a garnishment writ, on July 11, 1908, in a suit instituted in Nueces county, wherein Dan A. Leary and Al Chastain were plaintiffs, and Kilpatrick, W. W. Sands, and P. H. Chilton were defendants. The check was subsequently protested.

The trial court found that the indorsement and delivery by Kilpatrick of the check to the plaintiff amounted to an equitable assignment to the plaintiff of the $1,790 on deposit to Elliott's credit in the bank, but that Elliott and Kilpatrick remained liable to the plaintiff on the check as drawer and indorser, respectively, and that the check, in the event of its nonpayment, carried with it an equitable lien on the land conveyed by Kilpatrick to Elliott, in part payment for which it was given. It rendered judgment against both Elliott and Kilpatrick for the amount of the check, with interest, and for the protest fees, decreed in plaintiff's favor the foreclosure of such lien, and provided that Kilpatrick should have judgment over against Elliott for any amount of the judgment he might be required to pay, and that in such event he should be subrogated in the amount of such payment to the lien. Elliott alone appealed.

The Court of Civil Appeals...