Lott v. Farmers' State Bank

• Citation: 254 S.W. 1024
• Decision Date: 10 October 1923
• Docket Number: (No. 2043.)
• Parties: LOTT v. FARMERS' STATE BANK OF CLARENDON.
• Court: Court of Appeals of Texas

254 S.W. 1024

LOTT v. FARMERS' STATE BANK OF CLARENDON.

(No. 2043.)

Court of Civil Appeals of Texas. Amarillo.

October 10, 1923.

Appeal from District Court, Donley County; Henry S. Bishop, Judge.

Action by the Farmers' State Bank of Clarendon against H. Lott. Judgment for plaintiff, and defendant appeals. Affirmed.

Underwood & Jackson and Kimbrough & Kimbrough, all of Amarillo, for appellant.

Cole & Simpson, of Clarendon, for appellee.

BOYCE, J.

The Farmers' State Bank of Clarendon brought this suit against H. Lott, to recover on certain notes executed by Lott and payable to the bank. The questions presented on appeal arose in the trial of the cross-action pleaded by Lott in the case, and we make only such statement in reference thereto as is necessary for the disposition of the questions presented.

Several different claims are presented in the cross-action. The principal one is a claim for damages for the breach by the bank of a contract to lend appellant a large sum of money during the fall of the year 1920. The cross-petitioner's allegations and proof, stated most generally, as to this phase of his cross-action, are to the effect that in March, 1920, the bank, acting through its cashier, agreed to extend to the cross-petitioner during the fall of 1920, a line of credit in the sum of $100,000; that this agreement was confirmed from time to time and finally it was agreed, about October 1st, that the amount of such loan would be the sum of $86,000; and the appellant testified, though this was not alleged, that he was to take the money on or before October 15th. The rate of interest, according to the pleading and proof of the cross-petitioner, was agreed upon. It does not appear, either by pleading or proof, that any time was fixed by the agreement for the maturity of these loans, except that they were to be short time loans, and were being made for the purpose of enabling the cross-petitioner to harvest and market his cotton crop. The damages alleged consisted in the loss of a part of such cotton crop because the lack of funds prevented the cross-petitioner from harvesting the crop in season.

The court submitted the case to the jury on general and special charges, which included as elements requisite to recovery by Lott on this cause of action the following: (1) The making of the agreement by the bank and the reciprocal agreement on Lott's part to take the money; (2) the authority of the bank's cashier to make the agreement; (3) the reliance by Lott on the agreement; (4) its breach by the bank and the resultant damages; (5) by special charge the jury was informed that Lott could not recover unless the jury should find that he could have secured pickers for his cotton, "at the customary wage, and thereby have saved his cotton from loss and waste."

Without discussing the appellant's propositions at length, we will say that we are of the opinion that, unless the judgment of the trial court can be affirmed on the ground that the bank was entitled, under the evidence, to a peremptory instruction, the judgment must be reversed on account of errors committed by the court in submitting the questions referred to in the third and fifth subdivisions of our summary of the court's charge, as above stated. "Reliance" on a contract by a party thereto is not an element essential to recovery of damages for its breach by the other party. The court must have confused the law of contracts with that of deceit growing out of false representations. The court not only submitted such an issue in its general charge but emphasized it by giving a special charge thereon. That part of the special charge which informed the jury that appellant could not recover unless the jury should find that he could have secured cotton pickers to gather his cotton at the "customary wage" was also, in our opinion, error. There was no evidence as to such matter at all. Besides, appellant's tenants were to ultimately bear the costs of harvesting the cotton; appellant was arranging to assist them temporarily in such matters.

But the appellee insists that the pleading and evidence conclusively show that the agreement for the loan was illegal, as being in violation of the provisions of article 539, Revised Statutes, fixing a limit on the amount which a state bank is permitted to loan to any one person. We have been in some doubt as to this matter, though we are inclined to think that this contention should be sustained. The capital stock of the bank, which was a banking corporation created under the laws of the state of Texas, was $50,000. Appellant had been a director in the bank and the limit of its loaning capacity to him was understood and was a matter of discussion between him and the bank's cashier. Excerpts from the pleading and evidence may be found from which it might appear that the agreement as made did not contemplate a violation of the law in its consummation. From these it would appear that appellant, Lott, was to have a line of credit of the stated amount; that as he got the money he was to give his notes therefor, secured by cotton receipts, by which the parties may have meant warehouse receipts of the character referred to in article 539, Revised Civil Statutes, and if he...