Farmers' Nat. Bank v. Merchants' Nat. Bank

• Court: Texas Court of Appeals
• Writing for the Court: McMeans
• Citation: Farmers' Nat. Bank v. Merchants' Nat. Bank, 136 S.W. 1120 (Tex. App. 1911)
• Decision Date: 19 April 1911
• Parties: FARMERS' NAT. BANK OF CENTER et al. v. MERCHANTS' NAT. BANK OF HOUSTON.

136 S.W. 1120

FARMERS' NAT. BANK OF CENTER et al. v. MERCHANTS' NAT. BANK OF HOUSTON.

Court of Civil Appeals of Texas.

April 19, 1911.

Rehearing Denied May 4, 1911.

Appeal from District Court, Shelby County; James I. Perkins, Judge.

Action by the Farmers' National Bank of Center against the Merchants' National Bank of Houston and others. From the judgment in favor of defendant bank, plaintiff appeals; and from the judgment for plaintiff against defendants Potts & Lynch, said Potts & Lynch appeal. Judgment for defendant bank affirmed, judgment for plaintiff reversed, and case remanded.

D. M. Short & Sons, for appellants Potts & Lynch. Bryarly, Carter & Walker, for appellant Farmers' Nat. Bank. Davis & Davis, Lane, Wolters & Storey, and Wm. A. Vinson, for appellee.

McMEANS, J.

The Farmers' National Bank of Center, hereafter called the Farmers' Bank, brought this suit against the Merchants' National Bank of Houston, hereafter called the Merchants' Bank, and Potts & Lynch, a copartnership composed of W. C. Potts and W. H. Lynch to recover the amount of a draft drawn by Potts & Lynch in favor of the Farmers' Bank upon the Valley Lumber Company for $1,500. Plaintiff alleged that on the 3d day of June, 1907, Potts & Lynch drew a customer's draft on the Valley Lumber Company, a corporation, in favor of the Farmers' Bank for $1,500, and that said bank received the same for collection and forwarded it to the Merchants' Bank; that it was received by the latter on June 5, 1907, and receipt thereof was acknowledged on said date, with the statement that the amount of the draft had been credited to the account of the Farmers' Bank; that on receipt of this advice the Farmers' Bank credited the account of Potts & Lynch with said sum, and notified them that they could draw against said sum in the usual course of business, which they proceeded to do, and that they thereafter drew by their checks said amount out of the plaintiff bank; that the Merchants' Bank never gave the Farmers' Bank any further information about said draft until June 25, 1907, when the former informed the latter that the draft had been lost, and requested a duplicate; that the Farmers' Bank asked Potts & Lynch for a duplicate, which they refused to give, and the Merchants' Bank was at once notified of such refusal; that at this time the Valley Lumber Company, the drawee, was solvent, and if the duplicate had been given by Potts & Lynch it would have been paid by the lumber company, if in fact it owed Potts & Lynch that amount; that as a matter of fact the lumber company was not indebted to Potts & Lynch; that there were mutual accounts between said parties, and that there had been no settlement between them; and that upon a settlement between them it would have developed that the lumber company owed Potts & Lynch nothing, which fact Potts & Lynch then knew, but drew the draft and gave the same to the Farmers' Bank for the purpose of wrongfully obtaining said sum from it. Plaintiff further alleged that at the time it received said draft the Valley Lumber Company was a going concern, and did not go into the hands of a receiver until long thereafter, and that when the business of said company was finally wound up its assets paid 75 per cent. of its indebtedness; that if the said Potts & Lynch, or the Merchants' Bank, had made any effort to do so, they could have collected on said claim 75 per cent. thereof, but no effort was made in that regard by either. It further alleged that plaintiff never heard anything more from the Merchants' Bank about the draft until July 1, 1907, when plaintiff received from it a statement showing said sum of $1,500 to the credit of plaintiff, and that this credit was also shown in statements received by plaintiff from the Merchants' Bank on the 1st days of August and September, 1907; that on September 11, 1907, plaintiff received notice from defendant bank that the draft had not been collected by it from the lumber company, and that the same had been charged back to plaintiff; that it was by the combined wrongful and negligent acts of the defendants that plaintiff was wrongfully induced to pay out said sum of $1,500 to defendants Potts & Lynch; and that all defendants are therefore liable to plaintiff therefor.

The defendant Merchants' Bank, after a general denial, specially pleaded that it acknowledged to the Farmers' Bank receipt of the draft in question upon a postal card in general use by it, in which it was stated that it had received plaintiff's communication, with its stated inclosure. and that it had entered credit therefor, "out of town items subject to final cash payment." It further alleged its effort and failure to make collection of the draft, pleaded the insolvency of the lumber company, and, while claiming to have acted with due diligence, alleged that nevertheless, if there had been any negligence on its part, no injury had resulted therefrom to plaintiff, nor to Potts & Lynch, for the reason that it had tried and could not, or if it had tried it could not, have collected from the Valley Lumber Company, because of its insolvency, the amount of the draft at any time from the date of the draft to the time when the property of the lumber company was placed in the hands of a receiver.

Defendants Potts & Lynch urged a general demurrer to plaintiff's petition, and a further demurrer of misjoinder of parties defendant, because of want of privity between them, pleaded a general denial, and specially pleaded the same matters that were alleged by plaintiff in regard to the drawing of the draft, placing it with plaintiff for collection, the crediting of their account for the amount thereof, and the payment thereof to them upon their order. They further alleged that plaintiff obligated itself to collect said draft, itself or by its agents, and that plaintiff represented to them that the same had been collected, and that they acted in good faith in accepting said representation as true; that, if the draft was not in fact collected, the failure to collect it was the result of the negligence of plaintiff and its agents; that for more than 20 days after said draft was delivered to plaintiff the Valley Lumber Company was actively engaged in business; that if said draft had been presented within that time it would have been paid; that on or about June 25, 1907, the Valley Lumber Company was placed in the hands of a receiver, and that plaintiff failed to present said draft to said receiver for payment; that they, Potts & Lynch, had received payment of their claim against the Valley Lumber Company, and had no further claim against said company; that the assets of the lumber company were sufficient to have paid $1,000 of the claim sued on; that by failing to return the draft to them, and by representing to them the draft had been paid, the plaintiff is estopped from demanding payment of them now. They further pleaded that, had said draft not been paid, as plaintiff reported to them that it had been, and had they been notified of said nonpayment, and the said draft had been returned to them, they would have presented said draft, or the claim it represented, to the Valley Lumber Company, and if said claim had not been collected before the property was placed in the hands of a receiver they would have taken the necessary steps to establish their claim in the court where the receivership was pending, and would have received at least $1,000 from the proceeds of the sale of the property of the lumber company, and would have received as much as any other creditor of said company, at least 66 2/3 per cent., all of which defendants were prevented from doing by the aforesaid acts and statements of plaintiff.

The case was tried before a jury, and under a peremptory instruction from the court a verdict was returned in favor of the Merchants' Bank, and in favor of the Farmers' Bank as against the defendants Potts & Lynch, for $1,500, with 6 per cent. interest from September 11, 1907, upon which verdict judgment was accordingly entered, and from which judgment the plaintiff and the defendants Potts & Lynch have appealed.

We will first dispose of the appeal of Potts & Lynch. We may say at the outset that these appellants nowhere in their pleadings pray for judgment over against the Merchants' Bank.

Their first assignment of error complains of the action of the court in refusing to sustain their general demurrer to plaintiff's petition. Their proposition under this assignment is as follows: "Inconsistent facts cannot properly be embraced in one count in a pleading; and where one bank, which had a draft drawn in its favor against a third party, and which it has sent to another bank for collection, sues the latter on the ground of negligence in failing to collect the draft, and also sues the drawers of the draft on the ground of fraud, there is no privity of causes of action, and a misjoinder of parties defendant." It has been held that misjoinder and nonjoinder of parties should be pleaded in limine, and cannot be raised by general demurrer. Hill v. Newman, 67 Tex. 265, 3 S. W. 271; Kemendo v. Fruit Dispatch Co., 131 S. W. 76. The assignment is overruled.

By their second assignment appellants Potts & Lynch complain that the court erred in refusing to sustain their special exception to plaintiff's petition, to the effect that these appellants were improperly joined with the Merchants' National Bank as defendants in this suit. We think this contention is without merit. This controversy between all the parties grew out of the same transaction; that is to say, the drawing of the draft, depositing it for collection with the Farmers' Bank, and the appropriation by Potts & Lynch of an amount of money placed to their credit by the Farmers' Bank upon the faith of the bona fides of Potts & Lynch in making the draft and upon that of the Merchants' Bank in using due diligence in making collection. Our courts are...