Hull v. Guaranty State Bank
| Decision Date | 21 June 1922 |
| Docket Number | (No. 331-3686.) |
| Citation | 242 S.W. 189 |
| Parties | HULL v. GUARANTY STATE BANK OF CARTHAGE. |
| Court | Texas Supreme Court |
Garrison, Pollard, Morris & Berry, of Houston, Young & Stinchcomb, of Longview, and H. N. Nelson, of Carthage, for plaintiff in error.
Edwin Lacy, of Longview, and J. G. Woolworth, P. P. Long, and R. W. Priest, all of Carthage, for defendant in error.
This is a suit by defendant in error, Guaranty State Bank of Carthage, to recover of plaintiff in error, E. A. Hull, an amount alleged to be due as a result of an overdraft by Hull.
For some time prior to 1912 and up to and including March 18, 1912, Trabue was the active president of the bank. In his individual capacity he often purchased cotton from plaintiff in error, Hull. He did not always pay him cash for it, but instructed the cashier of the bank to pay Hull's checks. This practice gave rise to an overdraft by Hull, which, according to the trial court's findings, amounted to $2,165.85 on March 18, 1912.
On this date Trabue and Hull had another transaction involving the purchase of 128 bales of cotton. Hull's version of the affair is that Trabue informed him that the bank examiner was in town, insisting that Hull's overdraft, which Trabue informed him amounted to $5,165.85, should be paid. Hull contended that, if Trabue would give him the credits due him for cotton previously purchased, the bank would be indebted to him instead of him being indebted to the bank. As a result of their dealings, the 128 bales of cotton were delivered to Trabue at the agreed price of $7,000.81, of which amount $5,165.81 was to be applied by Trabue in discharge of Hull's overdraft of indebtedness and the balance of $1,835 was included in a note for the sum of $14,125, executed and delivered by Trabue to Hull. The object of the note was to combine the various amounts due Hull from Trabue on previous transactions with the $1,835 item.
It will be observed from the foregoing statement that the bank's books showed Hull's overdraft amounted to $2,165.85; whereas, Trabue informed Hull that his overdraft amounted to $5,165.85. Settlement between them was made on the basis of the latter amount. There is a discrepancy of $3,000 in these figures, but this is accounted for upon the ground that Trabue, upon being informed on about March 5th that Hull was overdrawn $5,165.85, stated that it was too great and thereupon drew a draft on a New York bank for $3,000, which draft was eventually paid and Hull given credit therefor on March 6, 1918.
The warehouse receipts for the cotton were transferred by Hull to Trabue, and the latter delivered to the bank a bill of lading covering the 128 bales of cotton, with draft attached, drawn on H. Kempner & Co., Galveston, Tex., for $6,500. This draft was placed to the credit on the books of the bank to the bill of exchange accounts. Subsequent to March 18, 1912, Hull drew checks on the bank amounting to $682.61. This amount added to the previous amount of overdraft was made the basis of the action against Hull. The bank did not credit Hull with any part of the proceeds of the Kempner draft.
Plaintiff in error insisted that, as the bank received the cotton or its proceeds, he was entitled to have credit therefor. The bank denied the authority of Trabue to accept cotton in payment of the overdraft and denied that it had received the cotton or its proceeds on behalf of Hull.
In a trial before the court without the aid of a jury, the court rendered judgment allowing Hull an offset in the sum of $2,165.85, and rendered judgment in favor of the bank for $682.61 plus $5 interest. Upon appeal this judgment was affirmed. 231 S. W. 810.
The uncontroverted evidence shows that the bank received the bill of lading and the draft, and that it collected the latter, but that neither Trabue nor Hull's account was ever credited with any part of the proceeds thereof.
It is observed that the trial court has found that Trabue had authority to collect debts due the bank, and that as president he collected the overdraft at the bank on March 18th. It is clear from these findings that the court also found that Trabue received the proceeds of the draft drawn on H. Kempner & Co. Upon no other theory can the court's conclusion that there was a collection of the overdraft be upheld, because there is, in the record, no suggestion of payment of the overdraft or any part of it in any other manner than by means of this cotton transaction. These findings must constitute the basis of the judgment to be rendered in the cause.
When Trabue, with authority to collect the debt due the bank, actually received, as president, the proceeds of the draft intended to discharge Hull's overdraft, the receipt of the money operated as a complete payment or discharge of Hull's indebtedness. Shaw et al. v. First State Bank of Abilene (Tex. Com. App.) 231 S. W. 325.
In the case cited, one Hurlbut, an officer of the defendant in error bank, delivered to the plaintiffs in error C. M. Shaw and Laura M. Shaw certain checks in their favor which had come into his possession. The defendant in error bank held a note for collection against plaintiffs in error which they...
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