First Nat. Bank of Ranger v. Price

• Decision Date: 15 May 1924
• Docket Number: (No. 1616.)
• Citation: 262 S.W. 797
• Parties: FIRST NAT. BANK OF RANGER et al. v. PRICE et al.
• Court: Texas Court of Appeals

Page 797

262 S.W. 797

FIRST NAT. BANK OF RANGER et al. v. PRICE et al.

(No. 1616.)

Court of Civil Appeals of Texas. El Paso.

May 15, 1924.

Rehearing Denied June 5, 1924.

Appeal from District Court, Eastland County; E. A. Hill, Judge.

Action by W. W. Price, trustee, and others against the First National Bank of Ranger and others. Judgment for plaintiffs, and defendants appeal. Reversed and remanded.

Turner & Seaberry, of Eastland, for appellants.

L. R. Pearson, of Ranger, for appellees.

HIGGINS, J.

W. W. Price, trustee, E. L. Baldwin, and others brought this suit against the First National Bank of Ranger, Tex., an insolvent national bank in process of liquidation, and its receiver, E. B. Cushing, to recover certain moneys and to establish the same as a preferred claim upon the theory that such money had been deposited in the bank as a special deposit in trust. The plaintiffs recovered judgment in the sum of $10,077.33, which was established as a preferred claim. The bank and its receiver appeal.

Briefly stated, the material allegations of the petition are as follows: On December 1, 1920, plaintiffs were preparing to organize a state bank at Eliasville, Tex., to be known as the Guaranty State Bank & Trust Company of Eliasville, and the plaintiffs had subscribed to the capital stock of the proposed bank the sum of $10,077.33 in money and approximately $20,000 in negotiable notes, which they desired to deposit in trust as a special deposit with the Ranger bank, of which they advised the Ranger bank, through its active vice president, C. B. Hedrick, and the Ranger bank, acting through its said vice president, stated to plaintiffs it would accept such money and notes to be held in trust in the form of a special deposit for the purpose of organizing the proposed bank and paying necessary organization expenses, and plaintiffs did deposit such money and notes in trust with the Ranger bank as a special deposit in the name of W. W. Price, trustee of the Guaranty State Bank & Trust Company of Eliasville, for the purpose of getting the officers of the Ranger bank to issue a certificate to the commissioner of insurance and banking of the state of Texas, certifying that said money had been deposited with the Ranger bank for the purpose of securing a charter of the proposed bank and paying the necessary organization expenses in connection therewith, and the Ranger bank received said money and notes in trust as a special deposit for such purpose, whereby a trust relation was created between the plaintiffs and the Ranger bank with respect to such deposit and the deposit became a trust fund to be held by the Ranger bank as a special deposit, separate and distinct from its general deposits and other assets, and that the Ranger bank violated its instructions, obligation, and agreement and mingled the money with its other deposits and assets; that on February 17, 1921, the Ranger bank became insolvent and Cushing was the appointed and qualified receiver and was administering its estate; that by the wrongful commingling of the special fund with the other assets and deposits of the bank its assets had been increased in the sum of $10,077.33; and that at all times since the deposit was made the Ranger bank and its receiver has had, and now has, in their possession more than said sum of money.

The defendants answered by general demurrer, general and special denials, and specially answered, in substance, that on December 18, 1920, there was deposited to the credit of the Guaranty State Bank & Trust Company of Eliasville $36,560 in notes and checks delivered by the plaintiffs with the agreement that the notes could be returned at any time to plaintiffs and the account charged accordingly; that the plaintiff Price was expressly authorized by the plaintiffs to draw checks against the account, signing same "Guaranty State Bank & Trust Company of Eliasville, Tex., by W. W. Price, Trustee," and defendant bank was authorized to charge the account accordingly; that the account was carried on the books of defendant bank in the general ledger as in all other cases of bank accounts; monthly statements were furnished Price, who was given a regular passbook showing deposits and withdrawals, and Price drew checks against the account and made deposits as in similar cases by general depositors; that the plaintiffs knew, or by the use of reasonable diligence could have known, that the funds were mingled with the general assets of defendant bank and that Price had drawn checks and made deposits as aforesaid; wherefore, the plaintiffs have ratified the acts of Price and are estopped from asserting that the deposit was special or in trust and that the deposit was a general one; that on May 2, 1921, Price, trustee, had proven the claim as a balance due on open account subject to check and presented same to the receiver, which was accepted by him and reported to the comptroller; that a 10 per cent. dividend had been declared by the receiver and paid to the general depositors and paid prior to the assertion of the preference claim herein, and that the plaintiffs were estopped by reason of the previous execution and filing with the receiver of their claim as a common unsecured claim.

By supplemental petition the plaintiffs denied the allegations of the answer and set up that the proof of claim by Price was made at the instance of the defendants on a form furnished by them, upon the representation made that if it was not so made the account would become barred, which representations were false and made for the purpose of deceiving plaintiffs and to prejudice their rights to establish the deposit as a preference claim, which representations were relied upon, and that the defendants refused to permit the plaintiffs to use any other form or accept a preferred claim, although the plaintiffs insisted that they be permitted to file a preferred claim, which the receiver refused to accept; further, that defendants had not been prejudiced in any way by the claim filed, and they had never been paid any dividend nor tendered any.

A condensed statement of the findings of the jury upon special issues is as follows: (1) That the notes and money were deposited under an agreement that the deposit was a special deposit made for the purpose of procuring a charter for the Eliasville bank and defraying the expenses in connection therewith, and for that purpose only. (2) The defendant bank did not agree with plaintiffs when the deposit was made to hold the notes and money as a special deposit separate and distinct from its other assets. (3) The defendant bank, through its vice president, Hedrick, agreed that the plaintiff W. W. Price, trustee, might draw checks against said account without changing the status of the account. (4) The assets of the defendant bank were augmented or increased by said deposit. (5) The assets of the defendant bank going into the hands of the receiver were augmented or increased by said deposit. (6) That such assets of the defendant bank passing into the hands of the receiver were so augmented or increased $10,077.33. (7) When the defendant bank closed on February 17, 1921, $10,077.33 was on deposit in the defendant bank in the account of the Guaranty State Bank & Trust Company of Eliasville, W. W. Price, trustee. (8) The defendants had not suffered any loss by the filing of the proof of claim by the plaintiffs or by any other act of plaintiffs with reference to the deposit since the closing of the Ranger bank. (9) The Ranger bank, nor its receiver, had not changed or altered their position by reason of the filing of the proof of claim by plaintiffs.

Upon special issues requested by the defendants these additional findings were made: (1) On December 18, 1920, when the deposit was made, Hedrick did not agree with C. W. Wick and B. A. Noble that all checks drawn against the account signed "W. W. Price, Trustee," should be paid by the defendant bank upon presentation. (2) When the deposit was made on December 18, 1920, Wick and Noble did not agree with Hedrick that the deposit should be held on open account subject to check by W. W. Price, trustee. (3) When said deposit was made there was prepared and delivered to Noble and Wick, agents for plaintiffs, a regular passbook ordinarily furnished to depositors. (4) Price was not induced to execute the proof of claim by a misrepresentation by the receiver as to when the claim would become barred by limitation.

Explanatory of the reference to Noble and Wick in the findings, it should be said that they were members of the organization committee of the Eliasville bank and were the parties who made the deposit in the name of Price, trustee, and who made the agreement with Hedrick with reference to the same.

The notes referred to in the pleadings and...