First Nat. Bank of Gorman v. Mangum

• Decision Date: 17 April 1915
• Docket Number: (No. 8161.)
• Citation: 176 S.W. 1197
• Parties: FIRST NAT. BANK OF GORMAN et al. v. MANGUM et al.
• Court: Texas Court of Appeals

176 S.W. 1197

FIRST NAT. BANK OF GORMAN et al. v. MANGUM et al.

(No. 8161.)

Court of Civil Appeal of Texas. Ft. Worth.

April 17, 1915.

Appeal from District Court, Eastland County; Thomas L. Blanton, Judge.

Action by W. J. Mangum against the First National Bank of Gorman and another, in which others intervened. From a judgment for plaintiff and intervener, defendants appeal. Reversed and remanded.

J. R. Stubblefield, of Eastland, and J. B. McEntire, of Gorman, for appellants. Scott & Brelsford, of Eastland, S. W. Bishop, of Gorman, and D. G. Hunt, of Eastland, and J. Rupert Jackson, of Baird, for appellees.

DUNKLIN, J.

W. J. Mangum, residing in the town of Gorman and engaged in the business of buying and selling hogs, peanuts, grain, and other farm products, instituted this suit against the First National Bank of Gorman and B. F. Reed, and, from a judgment rendered against the bank in favor of plaintiff and also in favor of several interveners, the bank has appealed.

The cause of action alleged by the plaintiff against the bank consisted, substantially, of allegations that the bank entered into a contract with the plaintiff to honor his checks drawn in payment for peanuts which he might purchase, upon plaintiff's agreement to deposit with the bank drafts which he would draw upon his customers to whom he intended to sell and ship the peanuts with bills of lading attached, and with the understanding that the proceeds of the drafts when collected by the bank would be used for reimbursing the bank for moneys paid out on such checks. This agreement was alleged to have been made on or about November 1, 1913. It was further alleged that on or about the 16th day of January, 1914, plaintiff bought peanuts in different amounts from several farmers residing in the community in which he lived, the amount of such purchases aggregating two car loads, and gave checks upon the defendant bank to cover the amount of such purchases, the checks being drawn upon the bank by plaintiff through W. H. Mullins, his authorized agent; that bills of lading for the two cars of peanuts with draft attached upon the Cleburne Peanut & Product Company, to whom plaintiff had sold the shipment, were deposited with the defendant bank on January 20, 1914, and at the same time a list of the outstanding checks given for the purchase of the peanuts was delivered to the bank with instructions to collect the drafts and to pay the checks so drawn, which the bank agreed to do; that the bank collected the drafts but refused to honor the checks, applying the proceeds of the two drafts in part upon an account owing by plaintiff and Godwin, his former partner, and in part upon plaintiff's individual note to the bank. Plaintiff further alleged that in dishonoring the checks the officers of the bank acted maliciously and thereafter publicly stated to the holders of the checks that plaintiff had no authority to draw the same and made the same representation to other banks and persons in that vicinity. Damages were sought for the breach of said contract on the part of the bank, consisting of loss of profits plaintiff would have made in his business of buying and selling such produce if the bank had complied with its said contract to furnish him credit. Damages were also sought for injury to his credit and business standing resulting from the tort committed in falsely circulating the report that he had drawn said checks knowing at the time that he had no funds or credit which would insure their payment.

The defendant B. F. Reed was alleged to be the cashier of the bank, and plaintiff prayed for judgment for both actual and exemplary damages against him and the bank by reason of the facts alleged and noted above.

According to the allegations of the petition, the contract and breach thereof were by the bank, while both the bank and Reed were responsible to plaintiff for making and circulating the false reports mentioned.

The case was submitted to a jury upon special issues. The verdict shows a finding that on or about November 1, 1913, the bank agreed with the plaintiff to furnish him a line of credit to enable him to buy products and to pay off and discharge any checks which might be drawn by the plaintiff in making such purchases. The jury further found, in effect, that checks were given as alleged by the plaintiff for the purchase of the peanuts constituting the two car loads which he shipped to a customer in Cleburne, and that before said checks were presented he delivered to the bank bills of lading for such cars with drafts attached, and at the same time instructed the officials of the bank receiving such drafts to apply the proceeds thereof to the payment of the checks mentioned, which the bank agreed to do; that thereafter the bank refused to honor said checks, which refusal injured the plaintiff in his business; and that the sum of $1,500 would reasonably and fairly compensate the plaintiff for such damages. The jury further found that in refusing...