Green v. Farmers & Merchants State Bank

• Decision Date: 30 November 1936
• Docket Number: No. 4681.,4681.
• Citation: 100 S.W.2d 132
• Parties: GREEN et al. v. FARMERS & MERCHANTS STATE BANK et al.
• Court: Texas Court of Appeals

100 S.W.2d 132

GREEN et al. v. FARMERS & MERCHANTS STATE BANK et al.

No. 4681.

Court of Civil Appeals of Texas. Amarillo.

November 30, 1936.

Rehearing Denied January 4, 1937.

Appeal from District Court, Lavaca county; Lester Holt, Judge.

Suit by William D. Green, for himself and as independent executor of the estate of William Green, deceased, and another, against the Farmers & Merchants State Bank and another. From an adverse judgment, the plaintiffs appeal.

Reversed and remanded.

H. W. Wallace, of Cuero, for appellants.

Marcus Schwartz, of Hallettsville, for appellees.

HALL, Chief Justice.

This suit was instituted by Wm. D. Green, for himself and as independent executor of the estate of his deceased father, William Green, joined by O. Buescher as trustee for the stockholders of the First National Bank of Moulton, against Farmers & Merchants State Bank and Elo Fehrenkamp, personally and as trustee, praying for an injunction restraining defendants from selling real estate described in the petition, and to recover $18,604 in the hands of the defendant Bank. The temporary injunction was issued.

The case came on for trial, and plaintiffs' demurrers and exceptions were overruled by the court. The controversy was submitted to the court upon an agreed statement of facts, resulting in a judgment for defendants, denying plaintiffs any recovery except of certain property tendered by defendants, and decreeing recovery against appellant Green, individually and as independent executor, for $7,099.56, with interest and costs, and for a foreclosure of a deed of trust lien on said real estate, and vesting title in defendant bank to said fund of $18,604.

The plaintiffs alleged the death of William Green, and the appointment and qualification of Wm. D. Green as independent executor of the estate; that the estate owned 170 shares in the defunct bank.

When the defunct bank closed its doors on October 2, 1931, its real and personal property was placed in the hands of the State Bank Examiner, and later, on November 9, 1931, Buescher, for himself and as trustee, and Wm. D. Green, as independent executor, parties of the first part, entered into a contract with Farmers & Merchants State Bank of Moulton, Tex., party of the second part, under the terms of which the Farmers & Merchants State Bank, hereinafter referred to as F. & M. Bank, acquired the real and personal property of the defunct bank. It appears that this deal was made with the approval of the State Banking Commissioner. The said contract, omitting the formal parts and such stipulations as have no bearing upon the issues presented here, is as follows:

"Whereas, First State Bank of Moulton, Texas, a banking corporation under the laws of Texas, was on October 2, 1931, by its Board of Directors closed and placed in the bands of the Banking Commissioner of Texas, for liquidation, and thereafter said Banking Commissioner levied against the stock holders of said bank corporation an assessment of one hundred per cent of the par value of all of said stock; and thereafter said Banking Commissioner and Farmers & Merchants State Bank, of Moulton, Texas, agreed upon the sale of all assets of said First State Bank, of Moulton, Texas, of every kind, including the liability for and upon said assessment of the said stockholders of said First State Bank, of Moulton, Texas, by said Banking Commissioner to said Farmers & Merchants State Bank, of Moulton, Texas, in consideration of which assets and property said Farmers & Merchants State Bank, of Moulton, Texas, has agreed to assume all of the liabilities of every kind, known and unknown, of said First State Bank, of Moulton, Texas, except its liability to its stockholders as such;

"And whereas, the terms of said sale and purchase have been duly submitted to the District Judge of Lavaca County, Texas, by application for authority to make such sale, duly made by said Banking Commissioner, and by order duly made by said Judge on the 9th day of November, A. D. 1931, and after due notice and hearing, the said Banking Commissioner was duly authorized and directed to make such sale, and said Banking Commissioner has so sold, conveyed, transferred and assigned all of said real and personal property and stockholders' assessments unto said Farmers & Merchants State Bank, of Moulton Texas, which corporation so purchased the same and bound itself to assume, pay off and discharge all of the debts and liabilities (except liability to stockholders as such) of said First State Bank, of Moulton, Texas; and at the time of consummating said transaction said purchasing Bank receives the securities herein mentioned, and executes this agreement;

"Now, therefore, in consummation of prior negotiations to the end above stated, we, O. Buescher, of Bastrop County, Texas, for himself and as agent for the other stockholders of said First State Bank of Moulton (other than William D. Green), who have contributed or may contribute cash to the guaranty fund herein described, and William D. Green, of Lavaca County, Texas, as Independent Executor of the estate of William Green, deceased, parties of the first part, and said Farmers & Merchants State Bank, of Moulton, Texas, herein acting by Ed. Boehm, its Vice President, under its corporate seal, by due authority of a resolution of its Board of Directors, party of the second part, hereby agree and contract as follows:

"1. A guaranty fund of $25,000.00 is hereby provided to and for said Farmers & Merchants State Bank. Of said sum $18,604.00 in cash is now here paid over to Farmers & Merchants State Bank, to be held by it and kept in a separate account, in accordance with this contract, the same being paid and provided by the said O. Buescher, for himself, and as agent for the other stockholders (other than said William D. Green), who have contributed cash to said Buescher as a part of said guaranty fund. To secure the difference between the cash just mentioned and $25,000.00, said difference being the amount necessary with said cash to make said fund amount to $25,000.00, said William D. Green, as Independent Executor aforesaid, and personally, has this day executed and delivered to Elo Fehrenkamp, trustee, his deed of trust conveying six tracts of land in Lavaca and DeWitt Counties, Texas, as security aforesaid, with power of sale in the usual form.

"It is now finally and conclusively agreed that said F. & M. State Bank takes the banking house and lot in Moulton, Texas, where said First State Bank engaged in business, at the book value thereof, to-wit, $7,768.63, and the furniture and fixtures of said former bank in said building at the book value thereof, $6501.18. These values of these properties shall remain fixed in regard to this guaranty, and these properties shall not be subject to any `write-down' or lowering from these values in determining the loss, if any, hereinafter referred to.

"4. If on December 31, A. D. 1932, said Farmers & Merchants State Bank, of Moulton, Texas, has realized out of the assets purchased by it as aforesaid, being all of the assets and property, real and personal, of First State Bank, of Moulton, Texas, a sum in cash which with the said banking house, furniture and fixtures at the fixed price mentioned in paragraph No. `2' above, aggregates the sum of $172,266.34, not including interest, rent, dividends or other earnings or revenue for the use of said property, then this obligation and guaranty shall be satisfied, and all of said assets and property so sold and conveyed to it by the Banking Commissioner, then remaining out of the former assets of First State Bank, of Moulton, Texas, shall be wholly the property of said Farmers & Merchants State Bank free from any accountability of any sort to the parties of the first part and free from any right, title, claim or interest in law or equity by the parties of the first part and their heirs, executors or administrators; and in such case the said cash paid into said guaranty fund shall be by Farmers & Merchants State Bank, of Moulton, Texas, paid over to said O. Buescher, as agent and trustee, and said deed of trust executed by said William D. Green, personally, and as Independent Executor of the Estate of William Green, deceased, shall be fully and finally released.

"5. The said sum of $172,266.34 shall include the banking house and lot, and furniture and fixtures at the fixed price set forth in paragraph `2' hereof, and the remainder of said sum shall be out of the principal of notes collected, bonds or other securities, and sale price of other assets, other than said banking house and lot, furniture and fixtures. Any interest collected on the principal of the notes and bonds and other securities included in said $172,266.34, by said F. & M. State Bank up to and prior to December 31, 1932, shall not be included or reckoned in as a part of said $172,266.34; nor shall any rent, dividends, income or profits be reckoned or included as a part of said sum to be realized and collected by said F. & M. State Bank prior to December 31, 1932 under this agreement. Likewise the collections, receipts, sale price and sums realized out of said purchased assets by F. & M. State Bank up to December 31, 1932, shall not be diminished or have charged against it any sums which may be paid out by said F. & M. State Bank during said time, nor any sum assumed by it, for taxes upon the property of said First State Bank for the year 1931, or subsequent thereto, nor for interest owing on any time deposit in said First State Bank of Moulton, nor for repairs or expenses incurred or accruing, nor for any debt or liability whatsoever of First State Bank, of Moulton, Texas.

"6. However, should Farmers & Merchants State Bank, of Moulton, Texas, collect and receive less than said sum of $172,266.34 (which shall include the banking house and lot, furniture and fixtures mentioned in paragraph 2 hereof, at the fixed value placed on same in said paragraph 2)...