Milmo Nat. Bank v. Cobbs

• Court: Texas Court of Appeals
• Writing for the Court: Fly
• Citation: Milmo Nat. Bank v. Cobbs, 115 S.W. 345, 53 Tex. Civ. App. 1 (Tex. App. 1908)
• Decision Date: 16 December 1908
• Parties: MILMO NAT. BANK v. COBBS.

115 S.W. 345

MILMO NAT. BANK v. COBBS.

Court of Civil Appeals of Texas.

December 16, 1908.

Rehearing Denied January 20, 1909.

Appeal from District Court, Bexar County; Edward Dwyer, Judge.

Suit by T. D. Cobbs, trustee, against the Milmo National Bank and another. From a judgment for plaintiff, the defendant bank appeals. Reversed.

Atlee & Atlee, for appellant. Cobbs & Cobbs, Don A. Bliss, and John H. Cunningham, for appellee.

FLY, J.

This is a suit instituted by T. D. Cobbs, trustee, against appellant and H. N. Morris, receiver for the Woods National Bank, to recover the sum of $8,360.22 and damages alleged to be due by reason of the following facts: That said trustee had a contract with J. R. Monroe and Jacobo C. Guerra for the purchase of 5,000 acres of land in Starr county, and Monroe and Guerra had a contract to purchase the same land from one Jesus Maria Yzaguirre, and it was agreed between the trustee and the two parties named that the trustee should pay the purchase price of the land to Yzaguirre through the Milmo National Bank, in Laredo, Tex. That on October 24, 1907, the trustee purchased from Woods National Bank in San Antonio, Tex., a bill of exchange for the sum of $8,360.22 drawn on appellant and payable to the order of Yzaguirre, which bill of exchange was given by the trustee to one John Thaison with instructions to place it to the account of the said Yzaguirre in appellant's bank and to procure from it a certificate that the amount would be paid to Yzaguirre, and that said Thaison presented the bill of exchange to appellant, and requested that the amount of the same be placed to the credit of Yzaguirre, and asked for and received a certificate showing that the money would be paid to him. It was further alleged: That at the same time attention was called to the fact that Yzaguirre had not indorsed the bill of exchange, and Thaison suggested that he would take the paper to Yzaguirre and have it indorsed, and then the cashier wrote on it, "On return properly indorsed will be credited to the account of Jesus Ma. Yzaguirre 10-25-07," and took back the certificate of deposit, and gave the bill of exchange to Thaison, who, after leaving the bank, found that it had been stamped paid. He returned to the bank and asked about it, and was told by Mussett, the assistant cashier, that no change was desired, that it was all right, as the bill of exchange had already been credited to Yzaguirre. That said Thaison then proceeded with the bill of exchange to Rio Grande City, near the city of Camargo, Mexico, where Yzaguirre resided, but, being absent from his home, Thaison did not see him, and before he returned Woods National Bank had suspended and been placed in the hands of a receiver, and appellant notified Yzaguirre that it would not pay the bill of exchange, and Yzaguirre then refused to convey the lands to the trustee. That several days after the bill of exchange was issued the trustee was informed by Woods National Bank that the bill of exchange would be paid by the Milmo National Bank. It was alleged that, when the bill of exchange was presented by Yzaguirre to appellant, it indorsed on the back of the paper: "Woods National Bank having failed, payment is refused by order of the bank examiner in charge." That, when the bill of exchange was issued by Woods National Bank, it notified appellant, and in reply appellant wrote: "We have your favor of the 24th and note that you have drawn on us for $8,360.22 in favor of Jesus Ma. Yzaguirre. We shall take pleasure in paying draft on its presentation." Woods National Bank on January 7, 1908, answered by general demurrer and general denial, and on same date appellant filed its plea of privilege to be sued in Webb county, which was verified by the affidavit of its cashier, M. T. Cogley. On February 17, 1908, pleas in abatement were filed by appellant, on the grounds that no privity of contract was shown between the two banks, that the trustee did not disclose for whom he was trustee, and that W. F. Woods and Don A. Bliss were proper parties and should be joined in the suit. On same day appellant filed its defenses without waiving its pleas of privilege and pleas in abatement. In that answer were special exceptions to the petition on the following grounds:

"(1) Because no consideration is alleged whereby this defendant was bound to honor and pay the bill of exchange mentioned in said petition, and it is not alleged that the Milmo National Bank had funds of the Woods National Bank against which the same was drawn.

"(2) Because the alleged act of certification of said bill of exchange was not binding on the Milmo National Bank, but is ultra vires, null, and void, it not being also alleged that the Woods National Bank had on deposit with the Milmo National Bank, at the time of such alleged certification, an amount of money equal to the amount of money specified in said bill of exchange, and it does not appear that such alleged act of certification proceeded upon and was for any consideration, and because it appears that such alleged act of certification was revoked before the said bill of exchange was delivered to the payee named therein, and because it does not appear that the said payee, upon delivery of said bill of exchange to him, became a bona fide holder thereof without notice, but the contrary appears in the allegations of the petition.

"(3) Because the allegations on page 4, beginning, `Immediately after the said Woods, and ending on page 5, with, `Would not be paid,' are insufficient to show any promise made to plaintiff to pay said bill of exchange, or any act of this defendant from which the cause of action sued on arose, and it is not alleged that the alleged letter of this defendant was exhibited to plaintiff nor when.

"(4) Because it is not made to appear how this defendant has become bound to pay to plaintiff the full amount of said bill of exchange or any amount, nor how the plaintiff has the right to recover of the defendant the said sum of money or any sum of money under the laws of the United States, as alleged on page 5 of plaintiff's petition, beginning, `Your petitioner further shows,' down to and including `United States,' it not being alleged that the Woods National Bank had funds on deposit with this defendant at the time such alleged cause of action arose or at any time, and it further appearing that, if any liability arose by reason of the alleged act of certification, such liability was to the payee named in the instrument certified, and not to the plaintiff.

"(5) Because the petition does not show what money, if any, or what consideration, if any, was paid by plaintiff on the purchase of said bill of exchange, nor does it show when nor how the money was placed in the Woods National Bank, as alleged, nor how much money was so placed.

"(6) Because it is not made to appear how the refusal of this defendant to pay said bill of exchange caused the petitioner to lose the purchase and conveyance of lands, as alleged on page 6 of the petition; it not being alleged that this defendant made any promise to plaintiff that it would pay said bill of exchange."

Exceptions to the pleas of privilege and the pleas in abatement were sustained and the special exceptions of appellant were overruled by the court, and, no jury being demanded, the court heard the facts and rendered judgment for the trustee in the sum of $8,360.22 against the receiver and appellant.

There is some diversity of opinion between the courts of the United States and England as to the effect of a written promise to the drawer to accept an existing bill of exchange which was not communicated to the holder or purchaser of the same, and which, therefore, could not have formed any inducement for the purchase of the bill. In most American cases, the liability of the acceptor, in case of a written acceptance, is measured by the acceptance having been an inducement to the taking of the bill. In the English cases it is held to be immaterial. The view generally accepted in the United States, however, is that, unless the holder took the bill on account of the promise, it is not an acceptance. Coolidge v. Payson, 2 Wheat. 66, 4 L. Ed. 185; Schimmelpennich v. Bayard, 26 U. S. 264, 7 L. Ed. 138; Boyce v. Edwards, 29 U. S. 111, 7 L. Ed. 799; Bank v. Rice, 98 Mass. 288; Id., 107 Mass. 37, 9 Am. Rep. 1. The rule sustained by the cases cited we believe to be the reasonable and proper one, and we conclude that as the letter written by appellant to Woods National Bank did not figure as an inducement to the purchase of the bill of exchange by T. D. Cobbs, the trustee, it should not have figured in the decision of the case. The rule mentioned applies to written acceptances not written on the face of the paper, because it is the desire of the law to restrict within the narrowest limits the doctrine of liability to an action on negotiable paper by reason of anything not appearing on the face of the paper itself. After the check had been drawn, however, and delivered to the trustee, to whom it belonged, he placed it in the hands of his agent, Thaison, for presentment to appellant, and there was an acceptance of the draft both verbally and in writing hereinbefore copied. That presentment was a legal one. It was made by the lawfully authorized agent of the rightful holder, and, if he had not been, the presentment would inure to the benefit of the rightful holder, whoever he might be. Tiedeman, Comm. Paper, § 212. The verbal acceptance alone was sufficient to bind the acceptor. Neumann v. Schroeder, 71 Tex. 81, 8 S. W. 632; White v. Dienger (Tex. Civ. App.) 25 S. W. 666. The acceptance had the effect of an admission upon the part of appellant that it had funds of the drawer with which to pay the amount of the bill, and the acceptor became the principal debtor and primarily liable for payment of the bill of exchange according to the terms of the contract therein evidenced. Stark v. Alford, 49...