Iron City Nat. Bank v. Fifth Nat. Bank

• Decision Date: 07 January 1903
• Citation: 71 S.W. 612
• Parties: IRON CITY NAT. BANK OF LLANO v. FIFTH NAT. BANK OF SAN ANTONIO.<SMALL><SUP>*</SUP></SMALL>
• Court: Texas Court of Appeals

71 S.W. 612

IRON CITY NAT. BANK OF LLANO v. FIFTH NAT. BANK OF SAN ANTONIO.^*

Court of Civil Appeals of Texas.

January 7, 1903.

Appeal from district court, Bexar county; J. L. Camp, Judge.

Action by the Iron City National Bank of Llano against the Fifth National Bank of San Antonio. From a judgment in favor of defendant, plaintiff appeals. Affirmed.

Chas. L. Lauderdale, for appellant. Shook & Vander Hoeven and Newton & Ward, for appellee.

FLY, J.

This suit was instituted by the appellant to recover of appellee the sum of $5,018.65, alleged to have been unlawfully appropriated by appellee. A trial by jury resulted in a verdict and judgment for appellee. This is a second appeal of the case. 47 S. W. 533.

The facts are substantially as follows: Some time early in May, 1894, W. O. Richardson borrowed $10,000 from appellee, giving it one note for $7,000 and another for $3,000, and depositing with it 70 shares of the capital stock of appellant as collateral. At or about the time he was negotiating for the loan of the money, Richardson was elected appellant's cashier, and immediately began to deposit funds belonging to appellant with appellee. On May 11, 1894, Richardson, as cashier, wrote to the cashier of appellee to charge the account of appellant with the two notes given by him. The amount of appellant's deposits was not sufficient at that time, however, to pay off both notes; but soon afterwards Richardson had $5,000 sent from the Hanover National Bank of New York, which was credited on the larger note, and the deposits in the sum of $5,018.65 were applied to the payment of balance remaining due on the two notes. The notes were marked "Paid," and with the collateral were returned to Richardson. Other deposits were afterwards made by appellant with appellee, but were soon drawn out. Notice that the deposits had been applied on the notes was given by appellee, by letter, to W. O. Richardson, cashier; and at the end of May, 1894, a statement was sent to appellant, showing that the $5,018.65 had been credited on notes. A statement for June was also sent to appellant, and both the statements were afterwards found in the proper place in the bank vault, with the "O. K." of appellant's bookkeeper written thereon. The statements were also seen by a director of appellant. To cover up the misappropriation of the $5,000, Richardson falsified appellant's books so as to make them show that the sum of $5,000 had been sent by the San Antonio bank to a bank in Kansas City, and put to the credit of appellant. Richardson at no time after he obtained the loan had any property but the bank shares, and they were utterly valueless. Appellant knew, or could have known by the least diligence, that Richardson had applied its money to the payment of his debts. In December, 1894, Richardson was discharged from the position of cashier, and some months afterwards was indicted for embezzlement, gave bond, and then absconded. In 1896, about two years after the misappropriation of the money by Richardson, and after he had become a fugitive from justice, this suit was instituted. Appellee did not know that Richardson was without authority to apply the money of appellant as he did, but acted in good faith throughout the whole transaction. Appellant knew months before Richardson was indicted that the money had been misappropriated, but never at any time gave notice to appellee of such misappropriation until this suit was instituted.

It was alleged in a supplemental petition that appellee, through its cashier, Engelke, made the loan to Richardson, with the stipulation that the latter should be elected cashier for appellant, and should cause moneys belonging to it to be deposited with appellee as security for the loan to Richardson, and that he should misapply and appropriate a sufficient amount of appellant's money to repay the said loan. Following up the allegation of conspiracy, appellant asked the following special charge: "If the deposit account of the plaintiff was begun or agreed to be made on the part of W. O. Richardson, and was accepted on the part of any officer or officers of the defendant, with the intention or understanding on the part of said Richardson and any officer or officers of the defendant that such deposit or deposits, or any part thereof, should be used and applied to pay or satisfy the loan made or to be made by the defendant to said Richardson, or any part of said loan, or in any way to secure the payment of said loan, or any part of it, then you, the jury in this case, must return a verdict in favor of the plaintiff." The refusal to give the charge is made the subject of the second assignment of error. There was not a particle of testimony tending to prove any such understanding as that mentioned in the charge, and it was therefore properly refused. Not only was there no proof that appellee had any knowledge of the want of authority in Richardson to make the...