Herd v. Wade

• Decision Date: 28 June 1933
• Docket Number: No. 3911.,3911.
• Citation: 63 S.W.2d 253
• Parties: HERD v. WADE et al.
• Court: Texas Court of Appeals

63 S.W.2d 253

HERD v. WADE et al.

No. 3911.

Court of Civil Appeals of Texas. Amarillo.

June 28, 1933.

Rehearing Denied September 13, 1933.

Appeal from District Court, Lynn County; Gordon B. McGuire, Judge.

Action by Mrs. H. G. Wade against J. T. Herd and others. Judgment for plaintiff, and defendant named appeals.

Reversed and remanded.

C. H. Cain, of Tahoka, and Bean & Klett, of Lubbock, for appellant.

G. H. Nelson, of Tahoka, and Bledsoe, Crenshaw & Dupree, of Lubbock, for appellees.

HALL, Chief Justice.

Mrs. Wade, a feme sole, sued Herd and J. M. Pope, alleging, in substance, that Herd was the owner and operator of a private bank conducted under the name of Southland Bank, Unincorporated, in the town of Southland, in Garza county. That he was at the same time cashier of the First National Bank at Post, in said county; that he lived at Post, which was the county seat, and had one W. M. McHorse in charge of the bank at Southland, and on or about September 25, 1929, he secretly sold said bank to Pope without advising or giving the depositors notice of the sale; that McHorse was interested in a fire insurance agency in connection with the bank, and also sold his interest in the agency to Pope; that, after Pope acquired the bank, McHorse remained there several days, and later left the town of Southland; that on or about December 2, 1929, the bank became insolvent and closed its doors; that there were about three hundred customers of said bank whose deposits amounted to about $50,000.00; that plaintiff was also a customer and depositor and at the time of such sale had a balance of $586.55, which amount she sought to recover.

Defendant, Herd, answered by general demurrer and general denial, and in addition thereto set up special defenses of election, estoppel, ratification, novation, and that plaintiff was negligent in not removing her account when she had an opportunity to do so.

He further alleged that the sale of the bank building and premises, together with fixtures, notes and accounts and the business to Pope was made in good faith for a valuable consideration; that Pope assumed all liabilities to the depositors, including plaintiff; that there was no agreement or intention on his part to keep the sale a secret, and the fact of such sale was a matter of common knowledge in the community; that plaintiff knew of such sale immediately thereafter, and the deed, bill of sale, and assumed name certificate were promptly filed and recorded in the office of the county clerk at Post, in Garza county; that immediately after Pope purchased the bank and took possession he was pointed out to plaintiff as the man who had bought it; that plaintiff discussed with her son whether she should withdraw her account, and elected to keep her deposit with the new banker; that she ratified the sale, and under the circumstances is estopped to say she did not recognize Pope as the one liable to her for said account; that there was a novation implied from the facts and circumstances by which she accepted and treated Pope as the due debtor in lieu of the old debtor; that, as a legal consequence, Herd was released from liability; that, if she elected to keep her money on deposit with Pope, and neglected to draw it when she had an opportunity to do so, the loss was due to her own negligence; that, when the bank was closed and Pope became a fugitive from justice, she and practically the other three hundred depositors took action to have a receiver appointed to take charge of the bank property, as that belonging to J. M. Pope, and such action was taken by a committee duly appointed by the depositors and authorized to take such steps as they thought proper to have Pope arrested and their money remitted; that, notwithstanding the efforts of plaintiff and such depositors to recover their money from Pope, they took no action to recover the same from Herd and made no demand on him for the payment of their deposits.

It is asserted that more than two hundred depositors have filed suits to recover their money.

The case was submitted to the jury upon twelve special issues, and, upon the return of the verdict, the court rendered judgment in favor of Mrs. Wade against Herd for $586.55, that being the amount of her deposit.

The appellant attacks practically all of the findings of the jury. The special issues, together with the answers, are as follows:

"No. 1. Do you find from a preponderance of the evidence that between September 25, 1929, and December 2, 1929, the plaintiff received notice or information sufficient to cause inquiry or investigation by a person of ordinary prudence as to whether John T. Herd had sold the Southland Bank to J. M. Pope?" Answer: "Yes."

"No. 2. Do you find from a preponderance of the evidence that at the time of, or immediately after the transaction relative to a sale of the Southland Bank by John T. Herd to J. M. Pope, that it was agreed by and between John T. Herd, J. M. Pope and W. M. McHorse that such transaction would be kept secret?" Answer: "Yes."

"No. 3. Do you find from a preponderance of the evidence that subsequent to September 25, 1929, and prior to December 2, 1929, W. M. McHorse made statements to customers of the Southland Bank to the effect that John T. Herd had not severed his connection with the Southland Bank?" Answer: "Yes."

"No. 4. Do you find from a preponderance of the evidence that John T. Herd, prior to December 2, 1929, learned that W. M. McHorse was making the statements inquired about in the preceding special issue?" Answer: "Yes."

"No. 5. Do you find from a preponderance of the evidence that John T. Herd, after learning of the making of such statements by W. M. McHorse, exercised such diligence as an ordinary prudent person would have exercised under the same circumstances to correct such statements?" Answer: "No."

"No. 6. Do you find from a preponderance of the evidence that the plaintiff, between September 25, 1929, and December 2, 1929, caused an inquiry to be made of W. M. McHorse as to whether John T. Herd had severed his connection with the said Southland Bank?" Answer: "Yes."

"No. 7. Do you find from a preponderance of the evidence that in answer to such inquiry that the said W. M. McHorse made the statement in effect that John T. Herd had not severed his connection with the Southland Bank?" Answer: "Yes."

"No. 8. Do you find from a preponderance of the evidence that the said statement of W. M. McHorse in effect that John T. Herd had not severed his connection with the Southland Bank was made known to plaintiff and that she relied and acted thereon and by reason thereof kept her deposit in said Southland Bank and continued doing business in said bank until it was closed?" Answer: "Yes."

"No. 9. Do you find from a preponderance of the evidence that the plaintiff used such diligence as a person of ordinary prudence would have used under the same or similar circumstances to discover whether the Southland Bank had been sold by John T. Herd to J. M. Pope?" Answer: "Yes."

"No. 10. Do you find from a preponderance of the evidence that if the plaintiff had used such diligence as a person of ordinary prudence would have used under the same circumstances that she would have discovered that John T. Herd had sold the Southland Bank to J. M. Pope in sufficient time to withdraw her money before the bank closed?" Not answered.

"No. 11. Do you find from a preponderance of the evidence that at any time between the 25th day of September, 1929, and the second day of December, 1929, the plaintiff had knowledge that the defendant John T. Herd had sold the Southland Bank to J. M. Pope?" Answer: "No."

"No. 12. Do you find from a preponderance of the evidence that the plaintiff accepted the said J. M. Pope as the one liable to her for her deposit in lieu of John T. Herd?" Not answered.

The first proposition urged is that the trial court erred in changing the venue of the case from the county of defendant's (Herd's) residence to Lynn county.

In the matter of changing the venue, the trial court has a wide discretion, and the appellate court will not reverse such action unless it clearly appears that the trial judge has abused his discretion.

R. S. art. 2170, provides that the venue of a civil case may be changed upon the application of either party supported by his own affidavit and that of at least three credible persons for any of the following causes: (1) That there exists in the county where the suit was pending so great a prejudice against him that he cannot obtain a fair and impartial trial; (2) that there is a combination against him instigated by influential persons, by reason of which he cannot expect a fair and impartial trial; (3) for other sufficient causes to be determined by the court.

The record shows that Garza county is sparsely settled and contains not more than six hundred citizens qualified for jury service; that the bulk of the population was in the vicinity of Post, the county seat, and of the village of Southland, where the bank in question was situated, and that the qualified jurors living in the vicinity of Southland, comprising about one-fourth to one-third of the total available jurors in the county, were disqualified; that Southland is the center of the best agricultural part of Garza county, and is thickly settled within a radius of ten miles around that village. It further appears that, of the remaining two-thirds or three-fourths of the citizens qualified to sit upon juries, ninety-five had theretofore been used either as talesmen or jurors in the first and second trials, resulting in mistrials; that, of the four hundred to four hundred fifty citizens qualified for jury service who did not live within the vicinity of Southland, a large number were customers of appellant's bank, and were indebted to him or to his bank for past and present financial favors; that a majority of the qualified jurors in the vicinity of Post, approximating 35 per cent. of...