Fidelity & Deposit Co. v. National Bank of Commerce

• Decision Date: 21 December 1907
• Parties: FIDELITY & DEPOSIT CO. OF MARYLAND v. NATIONAL BANK OF COMMERCE OF DALLAS et al.<SMALL><SUP>*</SUP></SMALL>
• Court: Texas Court of Appeals

106 S.W. 782

FIDELITY & DEPOSIT CO. OF MARYLAND v. NATIONAL BANK OF COMMERCE OF DALLAS et al.^*

Court of Civil Appeals of Texas.

December 21, 1907.

Rehearing Denied January 11, 1908.

Appeal from District Court, Dallas County; Richard Morgan, Judge.

Action by the Fidelity & Deposit Company of Maryland against the National Bank of Commerce of Dallas and others. From a judgment for defendants, plaintiff appeals. Affirmed.

The Fidelity & Deposit Company of Maryland brought this suit against the National Bank of Commerce of Dallas, J. B. Adoue, and W. Illingworth. The bank is sought to be made liable upon the following instrument in writing, which is made the basis of the suit: "The National Bank of Commerce. Dallas, Texas, June 10, 1901. $10,159.00. The National Bank of Commerce of Dallas, Texas. On failure on our part to comply with a certain contract existing between the First National Bank Building Company, Limited of Shreveport, La., and ourselves, in which we agree to erect a certain building for them in Shreveport, La., and the further condition that the Fidelity & Deposit Company of Baltimore City, Maryland, who have become our surety in said bond, have become legally liable on said bond, then and in that event pay to said Fidelity & Deposit Company any amount they may legally have to pay under their said bond, not exceeding the sum of $10,159.00 (ten thousand one hundred and fifty-nine dollars). Otherwise this cheque to be void and held for naught. [Signed] Sonnefield & Emmins. No. 450. Certified as per terms and conditions herein expressed. [Signed] J. B. Adoue, Prest. J. D. Estes, Cashier." J. B. Adoue is sought to be made liable upon the ground that in certifying the instrument sued on, "as per terms and conditions therein expressed," he made false representations, which led appellant to believe that the sum of money mentioned in the instrument was on deposit in the bank to the credit of Sonnefield & Emmins, and would be held by the bank to protect appellant in the event of legal liability. W. Illingworth is sought to be made liable upon the ground that he executed to the bank a note, and delivered the same to J. B. Adoue, to be held by him for the purpose of indemnifying the bank against loss by reason of the action of J. B. Adoue in certifying the instrument sued on in the terms hereinafter shown. The bank defended upon the grounds, first, that it was without power to enter into the obligation sued upon, and that the acts of its officers (president and cashier) were ultra vires and void, and therefore of no binding force upon the bank; second, that the obligation of the bank, if any, imposed by the terms of certification of the instrument sued on, was secondary; and in the nature of a surety obligation, based upon the contract then existing between Sonnefield & Emmins and the First National Bank Building Company, Limited, of Shreveport, La., and that there were subsequent alterations and changes made in the contract by said original parties thereto and the Fidelity & Deposit Company of Maryland, without notice or consent of the bank, and that this operated as a release and discharge of the bank from liability under such certification of the instrument sued on. J. B. Adoue answered, first, by general denial; second, that in certifying and signing the instrument sued on he acted in his official capacity as president of the bank; that he made no misrepresentations or concealments, and in nowise deceived or misled the plaintiff, etc., but acted in entire good faith in the premises, etc. W. Illingworth answered, first, by general denial; second, that the note executed by him to the bank was delivered to J. B. Adoue in trust, with the understanding that same should be by him held as indemnity against loss to the bank by reason of the certification of the note sued on, etc. The case was tried by the court without the intervention of a jury upon an agreed statement of facts, which had been reduced to writing and signed by the parties, and resulted in a judgment for the defendants. Upon motion of the plaintiff to file conclusions of fact and law the trial court adopted the agreed statement of facts as his findings of fact in the case, and for his conclusions of law simply stated: "Upon said facts, judgment should be rendered for the defendants, which will accordingly be now done." The agreed statement of facts is also adopted by this court as its conclusions of fact.

P. M. Milner, McLaurin & Wozencraft, and A. H. Graham, for appellant. Finley, Knight & Harris, for appellees.

TALBOT, J. (after stating the facts as above).

1. Appellant was dissatisfied with the court's general conclusions of law that judgment should be rendered for the defendants, and filed a motion requesting specific findings of law upon several designated issues. This motion was refused, and the court's action upon it is assigned as error. There was and is no dispute about the facts. They were agreed upon, reduced to writing, and submitted to the court on the trial of the case. This agreed statement of the facts was adopted by the trial court as its conclusions of fact, and the same is found in the record sent to this court as a full statement of the facts to be considered on this appeal. In this attitude of the record the judge's refusal to file specific conclusions of law, expressive of his views of the legal questions involved, resulted in no injury to appellant, and hence furnishes no sufficient ground for a reversal of the case. Bank v. Stout, 61 Tex. 567; Umscheid v. Scholz et al., 84 Tex. 265, 16 S. W. 1065.

2. Appellant contends, in effect, that the instrument declared on is a check certified by the bank in the usual course of banking business, and fixed the liability of the bank thereon upon the happening of the contingency expressed upon its face. This proposition is controverted by appellees, and the position taken that the contract sued on, so far as the bank is concerned, is a surety or indemnity obligation, indemnifying appellant to the extent of $10,159 against liability and loss arising from default of Sonnefield & Emmins in the performance of the contract with the first National Bank Building Company, Limited, for the erection of a building in Shreveport, La., and is ultra vires, and not binding upon the bank. We think it clear that the instrument in question is not a commercial check, certified in the usual course of business, and that the principles applicable to such checks cannot be invoked to fix liability on the bank. Indeed, we think it is plain from the face of the instrument that it is a check or order drawn and certified entirely outside of the usual course of banking business. Mr. Daniel, in his work on Negotiable Instruments vol. 2, § 1566, defines a check as follows: "A check is a draft or order upon a bank or banking house, purporting to be drawn upon a deposit of funds for the payment at all events of a certain sum of money, to a certain person therein named, or to him or his order or to bearer, and payable instantly on demand." Tested by this definition, the instrument sued on is lacking in more than one of the essential characteristics of this species of commercial paper. It is not for the payment of a certain specified sum of money, nor is it payable instantly on demand. Neither is any amount by the terms of the instrument payable at all events. On the contrary, the amount agreed to be paid is uncertain, and dependent on condition that the drawers shall fail to comply with the terms of a certain building contract existing between them and a third party, namely, the First National Bank Building Company, Limited, of Shreveport, La., and on the further condition that the drawee (appellant) as surety on the drawer's bond for the faithful performance of said contract shall have become legally liable on said bond. The text-writers differ in their definitions of a check, some falling short, it is said, "of giving all its distinguishing qualities, and some ascribing to it qualities which it is not absolutely necessary that it should possess;" but the definition quoted is sustained by many authorities, among which are the following: Blair & Hoge v. Wilson, 28 Grat. (Va.) 170; Ridgely Bank v. Patton, 109 Ill. 484; Harrison v. Nicollet Nat. Bank, 41 Minn. 489, 43 N. W. 336, 5 L. R. A. 746, 16 Am. St. Rep. 718; Oyster & Fish Co. v. Bank, 51 Ohio St. 106, 36 N. E. 833; Exchange Bank v. Sutton Bank, 78 Md. 577, 28 Atl. 563, 23 L. R. A. 173; Kavanaugh v. Bank, 59 Mo. App. 540...