First Nat. Bank of Texarkana v. De Morse
| Decision Date | 07 March 1894 |
| Citation | 26 S.W. 417 |
| Parties | FIRST NAT. BANK OF TEXARKANA v. DE MORSE. |
| Court | Texas Court of Appeals |
Appeal from district court, Bowie county; John L. Sheppard, Judge.
Action by L. C. De Morse against First National Bank of Texarkana. From a judgment for plaintiff, defendant appeals. Reformed.
P. A. Turner and J. M. Talbot, for appellant. Todd & Hudgins, for appellee.
Appellant is a national banking association, and declared a dividend of 20 per cent. on its capital stock on April 8, 1886, at which time appellee owned $11,000 of said stock. Immediately after said dividend was declared, appellee demanded his share of the same, it being $2,200. Appellant refused to pay it, but on April 22, 1886, applied the same to the payment of certain debts which it held against appellee. Appellee sues for his dividend, and interest thereon. Appellant answers that it applied the same to the payment of the above debts, and that, if it did not have the right to do this, then it pleads said debts as offsets against said demand. Judgment was rendered below in favor of De Morse for the recovery of the dividend, from which judgment this appeal was taken.
The facts are substantially as follows: The appellant is a national bank, and declared a dividend of 20 per cent. upon the capital stock April 3, 1886. Appellee owned $11,000 of such stock, and his portion of the dividend was $2,200. In the resolution of the directors declaring such dividend it was provided that the cashier should not pay such dividend to the stockholders until the respective indebtedness of each stockholder should first be paid out of his portion of such dividend. At the time such dividend was declared, said bank held the following claims, to wit: (1) One note, dated October 1, 1885, due at 60 days, executed by Todd & Hudgins, a firm composed of C. S. Todd and W. T. Hudgins, as makers, for $160, payable to their own order, bearing interest after maturity at 12 per cent. per annum, with 10 per cent. attorney's fees, and indorsed in blank by such makers, and then indorsed in blank by plaintiff, L. C. De Morse, and was on the day of its date sold by the makers and delivered to said bank. On the back of said note was the following indorsement: There was no testimony showing or tending to show that the makers of this note, who lived at Texarkana, Tex., were insolvent, and no effort whatever shown by the bank to collect the note, or reason assigned why the same was not collected. (2) One note, dated October 1, 1885, due at 30 days, for $1,190, executed by O. P. Taylor as maker, payable to his own order, with interest at 12 per cent. per annum after maturity, with 10 per cent. attorney's fees, indorsed in blank by the maker, and also indorsed in blank by plaintiff, L. C. De Morse, and on the day of its date sold to said bank. O. P. Taylor, the maker of this note, was insolvent at the time the same was executed, and has been insolvent ever since, and at the time of the trial was in the Texas penitentiary. Demand was made by the bank upon De Morse for payment at maturity, but it was not paid. (3) One note for $323.28, dated September 9, 1884, due October 12, 1884, executed by R. D. Coleman as maker, payable to his own order, with interest at 12 per cent. per annum after maturity, and 10 per cent. attorney's fees, indorsed in blank by the maker, and also by plaintiff, L. C. De Morse, and sold to the bank on the day of its date. Said Coleman was at the date of said note, and has ever since then been, a nonresident of the state of Texas, and beyond its jurisdiction. On April 7, 1887, after the application of a part of appellee's dividend to the payment of said note, he went to the bank, and got the note, thereby ratifying the payment. (4) On September 17, 1883, J. H. Draughn, J. W. Buchannan, and appellee, L. C. De Morse, guarantied to the appellant bank, for a good and valuable consideration the payment of three notes executed by W. H. Bush, each dated March 6, 1882, due at 90 days, with 10 per cent. per annum interest from date, — one for $529, payable to the order of W. A. Kelsey; one for $54.64, payable to the order of W. A. Kelsey, and one for $575, payable to the order of J. Deutchman. Said claims were owned by appellant bank, were secured by mortgage, and the same were collected prior to September 17, 1883, and the money used by such guarantors, and said Draughn and Buchannan each paid his respective one-third of same; but appellee never paid his portion. W. H. Bush, the maker of such notes, is insolvent, and a nonresident of the state of Texas, and has been insolvent and a nonresident of this state ever since the execution of said notes. (5) Upon the declaration of such dividend, April 8, 1886, the said bank held the above obligations against appellee, L. C. De Morse, which, exclusive of the Todd & Hudgins note, amounted to the following:
Amount of dividend due De Morse................... $2,200 00
By amount Taylor note.................. $1,190 00
" interest on same to April 8, 1886.... 62 67
" amount of Coleman note............... 323 28
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