Morgenroth v. First State Bank

• Decision Date: 17 November 1933
• Docket Number: No. 9892.,9892.
• Citation: Morgenroth v. First State Bank, 66 S.W.2d 458 (Tex. App. 1933)
• Parties: MORGENROTH et al. v. FIRST STATE BANK.
• Court: Texas Court of Appeals

66 S.W.2d 458

MORGENROTH et al. v. FIRST STATE BANK.

No. 9892.

Court of Civil Appeals of Texas. Galveston.

November 17, 1933.

Rehearing Denied December 14, 1933.

Appeal from District Court, De Witt County; J. P. Pool, Judge.

Suit by Mrs. E. K. Morgenroth and husband against the First State Bank, of Yoakum. Judgment for defendant, and plaintiffs appeal.

Affirmed.

E. C. Overall, of Gonzales, for appellants.

Terry, Cavin & Mills, Joyce Cox, and Rupert R. Harkrider, all of Galveston, and Durell Miller, of Yoakum, for appellee.

GRAVES, Justice.

"Mrs. E. K. Morgenroth, joined by her husband, E. K. Morgenroth, plaintiffs, brought this suit against the First State Bank, Yoakum, Texas, to recover upon the balance due on a certain promissory note in the original sum of $2,100.00, with credits of $800.00 being admitted or deducted. Prayer was for the balance due of $1,300.00, and interest at the rate of six per cent. per annum from June 16, 1931, and interest at rate of 5½ per cent. per annum on $2,100.00 from March 12th to June 16th, 1931, general and special relief, etc.

"Petition alleged that Mrs. Morgenroth on or about Dec. 12th, 1927, went to the Farmers and Merchants State Bank, Yoakum, Texas, and with intention to leave on time-deposit the sum of $1,500.00. That she applied to the cashier, E. J. A. Mertz, for a time deposit certificate. That Mertz was agent, cashier, and with authority to bind the bank, and did then and there issue to her, while acting in the scope of his authority and apparent authority, a time-deposit certificate. That at the end of three months, and succeeding three months thereafter, she would go to the bank and have various certificates issued to her; that the certificate would be issued on the following dates, March 12, June 12, Sept. 12, and Dec. 12. That on March 12, 1931, Mrs. Morgenroth went to the bank and surrendered her previously issued certificate of date Dec. 12, 1930, and received her interest up to March 12, 1931. That Mertz, the cashier, instead of issuing to her the usual certificate issued a promissory note, payable to Mrs. Morgenroth, with interest due in 90 days, and which note was signed by E. J. A. Mertz and John Machac. Petition alleged that the certificates issued previous to the note of date or delivered of date March 12, 1931, were signed by E. J. A. Mertz, with affix, `Cashier,' and John Machac, with affix, `Vice-President,' following their names.

"The petition further alleged that the note was the obligation of the Farmers and Merchants State Bank, Yoakum, Texas, and that the note sued upon was executed by E. J. A. Mertz while acting within his authority, or scope of his authority. That Mrs. Morgenroth dealt with Mertz as cashier of the Farmers and Merchants State Bank, Yoakum, Texas, and in his official capacity, and that she was dealing with the Farmers and Merchants State Bank at all times, and at the time of the issuance of the note. That the note sued upon was the act of the Farmers and Merchants State Bank, made by and through E. J. A. Mertz, its officer in charge, and with authority to bind said bank in such contract, and accept money for deposit.

"Petition also alleged that Mrs. Morgenroth was a German lady by blood, and was unlearned and uneducated, and never had any dealings with any bank prior to the times above alleged, and that she knew Mertz was cashier of said bank and had full confidence in him and dealt with him as cashier. That said Mertz made Mrs. Morgenroth believe and dealt with her in such a way as to make her believe she was leaving money on deposit in said bank, whereby he bound said bank by his said acts.

"Petition also alleged the bank became insolvent, and was closed by the Banking Commissioner of Texas. That the defendant Bank made an agreement whereby it purchased all assets, and agreed to pay off and satisfy all just and lawful debts and obligations. Petition alleged the claim of Mrs. Morgenroth was an obligation of the Farmers and Merchants State Bank, and assumed by the defendant bank.

"Petition also alleged that Mrs. Morgenroth dealt with E. J. A. Mertz at the Farmers and Merchants State Bank's place of business, and that said bank held out Mertz with authority to bind said bank; that said Mertz fraudulently issued to her a promissory note on March 12, 1931, instead of the usual time-deposit certificate, of which she did not know the difference; that he fraudulently induced her to accept the note, thereby inducing her to believe she was leaving her money on deposit. Petition alleged the relation of debtor and creditor existed between Mrs. Morgenroth and the Farmers and Merchants State Bank by reason of her leaving said money for deposit. Suit was to hold the bank liable on the note, alleging it was the obligation of the Farmers and Merchants State Bank, Yoakum, Texas.

"Defendant answered by general demurrer, general denial, and plea of non est factum as to certain $1,500.00 time-certificates. The sworn plea was limited to a denial that the Farmers and Merchants State Bank of Yoakum, Texas, ever executed to Mrs. Morgenroth a time-certificate for $1,500.00, or that E. J. A. Mertz ever issued for said bank any $1,500.00 time-deposit certificate, or any other sum. * * *

"Defendants also pleaded the note to be the personal liability of E. J. A. Mertz and John Machac, and that Mrs. Morgenroth had collected from them a part thereof.

"Defendants also entered a plea of innocent purchasers.

"The case was called on its merits on June 2, 1932, and tried to a jury, and at the close of plaintiffs' testimony, the court at the request of defendant instructed a verdict for the defendant, and that judgment was entered upon the jury's verdict."

The quoted statement has been taken from appellants' brief.

While there is serious question as to their right to have several of their assignments considered, on their appeal from the judgment so rendered below, it is determined that they have altogether presented enough to raise here the question as to whether or not the court erred in taking the cause from the jury.

These counter propositions appearing in the brief of the appellee, supported, as they are found to be by the evidence received and by what is conceived to be the law, present considerations requiring an affirmance of the learned trial judge's action:

"(1) The testimony was not sufficient to go to the jury, for the reason that if it be granted that plaintiff Mrs. Morgenroth did receive pink time-deposit certificates from Mertz, cashier of Farmers & Merchants State Bank of Yoakum, Texas, every time she called at the bank, except in the early part of 1931, it is certain that she received only a promissory-note, signed by E. J. A. Mertz and John Machac, as individuals only, when she went to the bank the last time, and that it represented community property, and that her acceptance was done with the approval of her husband.

"(2) The evidence was such that the court properly instructed the jury to return a verdict for the defendant, for the reason that if it be granted that the plaintiff—appellant— Mrs. Morgenroth, did receive from E. J. A. Mertz one or more time-deposit certificates, such certificates were not the act of Farmers & Merchants State Bank of Yoakum, Texas, but were the act and obligation of its cashier, E. J. A. Mertz, who is shown by appellants' pleadings to have been an old personal friend of Mrs. Morgenroth, whose father she had known and who spoke her native-tongue in transactions with her, and who is shown by the evidence to have been doing a money-lending business there in the bank, in competition with the bank, and with interests adverse to those of the bank, and it is shown by the evidence that if such certificates were issued the bank records do not show them, and the bank never did receive the deposits, unless as the individual deposits of Machac & Mertz Investment Company.

"(3) The court properly took the case from the jury and instructed them to render a verdict for the defendant, for the reason that, if appellants ever had a claim against Farmers & Merchants State Bank of Yoakum, Texas, they are shown by the evidence to have accepted in lieu thereof the promissory-note of E. J. A. Mertz and John Machac early in the year 1931, and to have ratified such transaction by later, before the opening of defendant-bank, collecting from E. J. A. Mertz and the widow of John Machac more than half of the amount due on their claim.

"(4) The court did not err in taking the case away from the jury for the reason that if appellants, by reason of any facts in this case, ever had a claim against Farmers & Merchants State Bank of Yoakum, Texas, that bank closed its doors on May 3, 1931, and was placed in the hands of the Banking-Commissioner of Texas, who immediately placed a liquidating-agent in charge, and the appellants knew that the bank was closed, yet filed with said liquidating-agent and made known to said liquidating-agent or to any other known representative of said bank, no claim whatever, but proceeded in attempts, aided by attorney Charles Fertsch, of Hallettsville, Texas, to collect from the makers of the note sued upon, E. J. A. Mertz, and the estate of John Machac.

"(5) The evidence was not sufficient to go to the jury, for the reason that appellant, Mrs. Morgenroth, not only never did receive time-certificates of deposit from Farmers & Merchants State Bank of Yoakum, Texas, but never did think that she did, as is evidenced by the facts that on the witness stand she never would say that she did, and that when said bank closed she exhibited no signs of uneasiness, but waited until the 12th of June, the day when her interest was due, and then applied not to the representatives of the bank, but to a maker of her note, E. J. A. Mertz, for her interest, and proceeded to collect from Mertz and the estate of John Machac about half the amount due on the note with the assistance of the attorney into whose hands ...