First Nat. Bank v. Gates

• Citation: 213 S.W. 720
• Decision Date: 23 April 1919
• Docket Number: (No. 6066.)<SMALL><SUP>*</SUP></SMALL&gt
• Parties: FIRST NAT. BANK OF COLEMAN v. GATES et al.
• Court: Texas Court of Appeals

213 S.W. 720

FIRST NAT. BANK OF COLEMAN v. GATES et al.

(No. 6066.)^*

Court of Civil Appeals of Texas. Austin.

April 23, 1919.

Appeal from District Court, Coleman County; J. O. Woodward, Judge.

Action by the First National Bank of Coleman against J. W. Gates and the Brownwood National Bank. From a judgment sustaining the last-named defendant's plea of privilege, and transferring the cause, plaintiff appeals. Affirmed.

Snodgrass, Dibrell & Snodgrass, of Coleman, for appellant.

Harrison & Cavin, of Brownwood, Critz & Woodward, of Coleman, and E. M. Davis, of Burnet, for appellee.

BRADY, J.

Appellant brought this suit against appellees in the district court of Coleman county to recover the sum of $3,500. Appellee J. W. Gates answered, confessing the allegations of the petition, and asking for judgment over against the Brownwood National Bank for whatever amount appellant should recover against him. The appellee Brownwood National Bank filed its plea of privilege to be sued in Brown county, which was contested by both appellant and Gates. The Brownwood National Bank also answered to the merits, subject to its plea of privilege, and to the cross-action of Gates, and its answer contained also a cross-bill against Gates.

The cause was submitted to a jury both upon the plea of privilege and the merits, upon special issues, and answers were returned by the jury to most of the questions. The court rendered judgment alone upon the question of venue, sustaining the plea of privilege and ordering the cause transferred to the district court of Brown county, from which judgment this appeal was taken by appellant.

Findings of Fact.

By the undisputed evidence or the findings of the jury, it appears that appellee J. W. Gates had arranged for certain loans with the Bankers' Loan & Securities Company of Ft. Worth, Tex., among which was the sum of $3,500, to be secured by a deed of trust upon real estate in Coleman county, and evidenced by the note of Gates and wife. Pursuant to the arrangement, Gates and wife executed a note for $3,500, payable to the loan company or order, and Gates drew a draft at Coleman, Tex., in like amount, payable to the order of appellant, First National Bank of Coleman, on the loan company, and directed the latter to charge the amount to Gates and wife. The draft with note attached was received by appellant from Gates, and it deposited to the credit of Gates on the same day the sum of $3,500, which was subsequently checked out by him.

The draft and note were forwarded by appellant to appellee Brownwood National Bank, with written instructions to credit the proceeds to appellant, and with memorandum attached, requesting the collecting bank to wire appellant when the draft was paid. The Brownwood National Bank was instructed to permit B. E. Hurlbut, the agent of the loan company, and who resided in Brownwood, Brown county, Tex., to examine the papers at the collecting bank. Hurlbut requested permission to withdraw the papers from the bank, which was refused, and at the request of appellant the Brownwood National Bank then returned all the papers to appellant. Subsequently the note, draft, and others papers were delivered by appellant to Gates, who agreed to carry the papers in person to Brownwood and permit Hurlbut to examine the same, which was done. On April 10th, the date Gates went to Brownwood for the purpose just stated, he or Hurlbut, or both, delivered the papers to the Brownwood National Bank; there being an issue in the evidence as to the instructions given the bank, and also as to just what papers were contained in the package.

On April 9th, Gates received a letter from Hurlbut, in which, according to the findings of the jury, he falsely and fraudulently represented to Gates, for the purpose of inducing him to execute a new draft, that it was necessary to have a substitute draft, because the original had been received as a cash item, and in order to close up the loan speedily, Gates was induced by this letter to execute another draft for the sum of $3,500, similar to the former draft, but payable to the Brownwood National Bank, or order as requested by Hurlbut. This letter was received by Gates in Coleman county, and the second draft was forwarded by mail from Coleman to Hurlbut at Brownwood. The letter of Gates forwarding the second draft stated that Hurlbut could destroy one or the other of the drafts. The second draft was sent with the intention on the part of Gates, as found by the jury, that it should be substituted for the first; but Hurlbut, on April 10th, a short time after the package of papers had been delivered to the Brownwood National Bank, presented the second draft to the cashier of the Brownwood National Bank, who cashed the same, and deposited to the credit of Hurlbut the sum of $3,500. The second draft was forwarded by appellee bank, with the original note of Gates and wife attached thereto to a bank at Ft. Worth, and was paid by the loan company, which took up and received the draft and note. The evidence does not clearly disclose who attached the note to the second draft, nor at what time it was done.

Hurlbut made no express or formal claim to be the owner of the draft or its proceeds when he presented it to the cashier of appellee bank, and he in fact had no interest therein, as found by the jury. The loan company would not have paid either the first or second draft, unless accompanied by the note of Gates and wife, and the note was shown to be of the reasonable value of $3,500, and the land securing the same of a reasonable market value in excess of the face of the note.

In connection with the deposit by appellant of $3,500 to the credit of Gates at the time the original draft was received by it, and in the action of the bank in permitting Gates to check out this account, its cashier testified that —

"Mr. Gates had an active account with us all the time, and was depositing and checking, and as a matter of fact, I considered Mr. Gates was good for $3,500 or for $1,200."

The evidence further shows that after all the transactions above recited, reconciliation statements were exchanged between appellant and appellee bank, which showed that no credit had been given to appellant on either of the drafts. Appellant reported to appellee bank that the statements were correct, and made no claim to, nor asserted any interest in, the drafts, or either of them, until after Hurlbut's death, who committed suicide on May 17th.

Appellant pleaded and introduced in evidence a purported transfer and assignment by J. W. Gates to it of the money collected by the Brownwood National Bank on the second draft, and all claims and causes of action in favor of Gates against appellee bank, arising out of the transaction detailed above, and also guaranteeing to appellant the payment of such sum of money with all costs incident to the collection, and reasonable attorney's fees. This written instrument recited that the transfer and assignment was for the purpose of removing any question as to the ownership of the money, and to enable appellant to recover the property to which it was equitably entitled.

The special findings of the jury, which are sustained by the evidence, and which are not already embraced in the foregoing statement of the facts, are as follows:

That appellant told Gates that he should not draw upon the bank for the money placed to his credit until the bank had received a wire to the effect that the draft had been paid. That the second draft for $3,500 was sent by Gates to Hurlbut to be delivered to appellee bank only on condition that the first draft was destroyed, and that such was the intention of Gates, and it was also his intention that if the second draft was used by appellee bank, it should be in place of the first draft. That appellant did not make a bona fide deposit of $3,500 to the credit of Gates in consideration of the delivery to it of the first draft with note attached. That the appellee bank was not guilty of negligence in not forwarding to the loan company the first draft, and that the same was not received by the collection clerk of appellee bank. That the note of Gates and wife was attached to the second draft of $3,500, at the time it was forwarded by appellee bank to Ft. Worth for collection, and at the time it was paid by the loan company. That the Brownwood National Bank had reasonable grounds for supposing and believing that Hurlbut was holder and owner of the second draft at the time it was delivered to it, and at the time it credited Hurlbut's account with the sum of $3,500. That it was the intention of appellant at the time the first draft was delivered to it by Gates that it should collect the draft for Gates, and that it was by it received for collection; and that appellant intended the drafts and papers to be the property of Gates, when it redelivered them to him. That it was also the intention of appellant, at the time it delivered to Gates the papers returned to it by appellee bank, that the draft should be collected for Gates, and that such was also the intention of Gates. That the teller of appellee bank, at the time of the delivery to him by Hurlbut of the second draft, believed that Hurlbut was the owner thereof. That Gates, at the time he executed and mailed the second draft, intended that the proceeds of the draft or note against which it was drawn should go to appellant, and that he never intended that any other person or bank should receive the proceeds thereof. That Gates did not authorize or instruct Hurlbut to cash the second draft. That Gates instructed the agent of appellee bank, at the time he delivered the papers to it, to handle the drafts for him and to remit the proceeds to appellant for his account. That Gates did not authorize or instruct Hurlbut to deposit the proceeds of the second draft to the credit of appellant. That Gates instructed Vaughn Ray, the collection clerk of appellee bank, to permit Hurlbut to take...