Patterson v. Citizens' Nat. Bank of Lubbock

• Decision Date: 21 December 1921
• Docket Number: (No. 1877.)
• Citation: 236 S.W. 130
• Parties: PATTERSON v. CITIZENS' NAT. BANK OF LUBBOCK.
• Court: Texas Court of Appeals

Page 130

236 S.W. 130

PATTERSON v. CITIZENS' NAT. BANK OF LUBBOCK.

(No. 1877.)

Court of Civil Appeals of Texas. Amarillo.

December 21, 1921.

Rehearing Denied January 11, 1922.

Appeal from Lubbock County Court; P. F. Brown, Judge.

Suit by G. D. Patterson against the Citizens' National Bank of Lubbock. Judgment for defendant, and plaintiff appeals. Reversed and rendered.

R. A. Sowder, of Lubbock, for appellant.

Bean & Klett, of Lubbock, for appellee.

BOYCE, J.

This suit was brought by appellant, G. D. Patterson, against appellee bank to recover the sum of $303.10 deposited to plaintiff's credit in the bank and wrongfully, it is alleged, appropriated by the bank and applied to the payment of a certain note executed by Patterson and payable to the bank. The plaintiff alleged that prior to such act of the bank he was adjudged a bankrupt and subsequently received his discharge in bankruptcy; that said debt was thereby discharged, and the bank, in applying such deposit as a credit on such debt, acted wrongfully. The bank claimed, and this claim raises the real controversy in the case, that it had an equitable lien on or an assignment of the fund represented by this deposit, which lien or assignment was not dischargeable by the adjudication of bankruptcy.

On November 8, 1918, G. D. Patterson executed and delivered to the bank his note for $275.24. The following testimony of the bank's cashier is relied on by the bank to establish the equitable assignment or lien claimed by it:

"On November 8, 1918, I was an active officer in such bank, and I recall the bank having a note of $275.24 made by the plaintiff to it. This was given for money advanced to him. At this time he had a farm near Lubbock. Proceeds of his rent crop for the year 1919 was deposited in such bank, and sufficient was deposited to cover his note. Patterson made various promises as to how he would repay this money. He promised to sell the place and also had me to try to get him a loan through the Federal Land Bank, which I failed to do. He promised to pay it with any revenue that he could get off the farm through sale of crops or stock. Yes; he said he would repay the $275.24 out of the produce of the farm."

Patterson filed his petition in bankruptcy on September 29, 1919, and on March 31, 1920, was discharged from all his debts, dischargeable in bankruptcy, "which existed on September 29, 1919." The note to the bank was listed among the liabilities in the bankruptcy proceeding, and the bank filed its claim therein, but later withdrew it. On October 17th and later during that month and November, 1919, Patterson's tenant on the 160 acres of land referred to, deposited rentals therefrom with the bank, to the credit of an account entitled "G. D. Patterson Rent Account." The deposits were made upon direction of Patterson. On November 12, 1919, the bank, without Patterson's knowledge or consent, charged said account with $303.10, and credited said note with such amount. This suit was brought by the said Patterson to recover said sum of money. The trial court held as a matter of law "that the agreement between said Patterson and said bank created an equitable lien, mortgage, and assignment of the proceeds so deposited in said bank as security for said debt, owing by said Patterson to said bank," and entered judgment for the defendant.

It seems to be the well-settled law that a mere promise to pay a debt out of a particular fund will not operate as an equitable assignment pro tanta of the fund.

"An agreement to pay out of a particular fund, however clear in its terms, is not an equitable assignment; a covenant in the most solemn form has no greater effect. The phraseology employed is not material provided the intent to transfer is manifested. Such an intent and its execution are indispensable. The assignor must not retain any control over the fund—any authority to collect, or any power of revocation. If he do, it is fatal to the claim of the assignee. The transfer must be of...