First Nat. Bank v. Talley

• Decision Date: 16 June 1926
• Docket Number: (No. 649-4511.)
• Citation: 285 S.W. 612
• Parties: FIRST NAT. BANK OF GOREE v. TALLEY.
• Court: Texas Supreme Court

285 S.W. 612

FIRST NAT. BANK OF GOREE v. TALLEY.

(No. 649-4511.)

Commission of Appeals of Texas, Section B.

June 16, 1926.

Certified Questions from Court of Civil Appeals of Eleventh Supreme Judicial District.

Action by W. T. Talley against the First National Bank of Goree. From judgment for plaintiff, defendant appealed to the Court of Civil Appeals, which certified three questions to the Supreme Court. First question answered in the negative.

Dickson & Newton, of Seymour, and D. J. Brookreson, of Benjamin, for appellant.

T. R. Odell and B. F. Reynolds, both of Throckmorton, A. M. Howsley, of Albany, and Joe Wheat, of Seymour, for appellee.

SPEER, J.

"This is a suit by W. T. Talley, appellee, against the appellant First National Bank of Goree, a resident of Knox county, Texas, and against J. E. Beck, a resident of Throckmorton county, and brought in the district court of the latter county. The suit is upon a check drawn by Beck on the appellant bank in favor of appellee for the sum of $1,318 given in payment for certain cattle sold by appellee to said Beck. The check was in due course deposited by appellee in his bank at Throckmorton and by said bank duly forwarded to its correspondent at Fort Worth, and by the latter forwarded to the Federal Reserve Bank at Dallas for collection. The Federal Reserve Bank in due course forwarded said check, together with other items also drawn on the appellant bank to the latter for payment. In connection with the items forwarded for payment said Federal Reserve Bank addressed a letter to appellant bank instructing the latter to telegraph nonpayment of items of $500 or over. The case was submitted to the jury on special issues as follows:

"Special Issue No. 1: `Did the cashier of defendant bank agree with defendant J. E. Beck to loan him money with which to buy cattle in Throckmorton county, Tex., on or about October 1, 1923?'

"Special Issue No. 2: `If you have answered special issue No. 1 above in the affirmative, then answer the following special issue: Did the defendant J. E. Beck represent to plaintiff, W. T. Talley, at the time he, the said J. E. Beck, bought plaintiff's cattle, that he had made arrangements with defendant bank to buy cattle in Throckmorton county, Tex., and pay for same by checking on defendant bank?'

"Special Issue No. 3: `If you have answered special issue No. 2 in the affirmative, then answer the following issue: Did the plaintiff, Talley, rely on said representations of defendant J. E. Beck, when he parted with title and possession of his cattle?'

"`Did the defendant, the First National Bank of Goree, refuse within 24 hours after the check in controversy was presented to it (or within such period as the holder may have allowed) if any, to return the same accepted or nonaccepted to the holder of said check?'

"The jury answered all of the foregoing issues in the affirmative. There was no other evidence of a demand and refusal on the part of appellant bank to return said check, other than it did not telegraph nonpayment of the check sued on, nor return the same to the Federal Reserve Bank within 24 hours.

"The disposition of the appeal turns on the question as to whether, under the foregoing findings and evidence, the appellant bank, under article 6001a — 137, Complete Tex. St. 1920, or article 6001 — 137, Vernon's Ann. Civ. St. Supp. 1922, can be said to have accepted the check in question for payment, and is therefore liable for the payment of same. In this connection it is deemed material to state that the appellant bank is incorporated under the National Banking Act of the United States, and the evidence further shows without contradiction that at the time of the transaction in question the said J. E. Beck was indebted to the appellant bank in an amount equal to 10 per cent. of the combined capital stock and surplus of said bank and in excess of 30 per cent. of the capital stock of said bank, and that said Beck at the time said check was presented for payment had no funds on deposit with appellant bank with which to pay the same, and that if the bank is held liable for the payment of said check it will increase the indebtedness by said Beck to appellant bank in an amount in excess of the amounts which said bank would be authorized to loan said Beck under section 9761, United States Compiled Statutes.

"In view of the holding of the honorable Court of Civil Appeals for the Second District in the case of Commercial State Bank v. Harkrider-Keith-Cooke Co., 250 S. W. 1069, to the effect that the retention by a bank of a check drawn on it for more than 24 hours after said check had been presented for payment, renders said bank liable as an acceptor of said check under the statutes referred to. The conflict in the authorities from other jurisdictions on this question of law as shown in the notes to the case of Wisner v. First National Bank, 220 Pa. 21, 68 A. 955, 17 L. R. A. (N. S.) 1266, and the statements in the opinion in Lone Star Trucking Co. v. City National Bank of Commerce (Tex. Civ. App.) 240 S. W. 1000, Brannon's Negotiable Instruments, p. 369, and the provisions of the United States Statutes referred to, together with the rule as announced in Fields v. Multnomah County, 64 Or. 117, 128 P. 1045, 44 L. R. A. (N. S.) 322, and in authorities cited in Citizens' National Bank v. Stevenson (Tex. Com. App.) 231 S. W. 364, loc. cit. 366, we deem advisable to certify to your honors the following questions:

"Question No. 1: Does the retention for more than 24 hours by a bank of a check forwarded to it for collection and payment render such bank liable as an acceptor of said check under said section 137 of the Negotiable Instruments Act?

"Question No. 2: Is the evidence above detailed sufficient to raise the issue of a refusal of appellant bank to return the check in question within 24 hours as found by the jury so as to render appellant bank liable as an acceptor of said check under the Negotiable Instruments Act?

"Question No. 3: Would the construction of said section 137, so as to render appellant bank liable on said check and thus increase the indebtedness of J. E. Beck to it in excess of the amount to which said bank could become indebted to it under section 9761, United States Compiled Statutes, render said section 137 invalid as being in violation of section 9761, United States Compiled Statutes?"

The following provisions of our Negotiable Instruments Act are pertinent:

Article 6001—132, Negotiable Instruments Act (Vernon's Ann. Civ. St. Supp. 1922 [article 5941, § 132, R. C. S. 1925]):

"The acceptance of a bill is the signification by the drawee of his assent to the order of the drawer. The acceptance must be in writing and signed by the drawee. It must not express that the drawee will perform his promise by any other means than the payment of money."

Section 137 of the same article:

"Where a drawee to whom a bill is delivered for acceptance destroys the same, or refuses within 24 hours after such delivery, or within such other period as the holder may allow, to return the bill accepted or nonaccepted to the holder, he will be deemed to have accepted the same."

Section 185:

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