Paxton v. First State Bank of Tatum, 4056.

• Decision Date: 17 September 1931
• Docket Number: No. 4056.,4056.
• Citation: 42 S.W.2d 837
• Parties: PAXTON et al. v. FIRST STATE BANK OF TATUM.
• Court: Texas Court of Appeals

42 S.W.2d 837

PAXTON et al. v. FIRST STATE BANK OF TATUM.

No. 4056.

Court of Civil Appeals of Texas. Texarkana.

September 17, 1931.

Appeal from District Court, Rusk County; R. T. Brown, Judge.

Action by the First State Bank of Tatum against William Morton Paxton, the American Indemnity Company, and another. From an adverse judgment, the named defendants appeal.

Reversed and remanded.

Sanders & McLeroy, of Center, and Huggins, Kayser & Liddell and John Dawson, all of Houston, for appellants.

Woolworth & Baker, of Carthage, and Brachfield & Wolfe, of Henderson, for appellee.

SELLERS, J.

This suit arose as an aftermath of the closing of the First State Bank of Tatum, Tex. The bank closed in the latter part of January, 1927. Thereafter a new bank, known as the Tatum State Bank, was formed which took over the assets and equipment of the old First State Bank; stockholders of the old First State Bank guaranteeing the assets acquired by the new State Bank. Among the assets of the old First State Bank were found the two promissory notes sued upon herein; one executed by Wm. Morton Paxton, the former cashier of the First State Bank, and the other executed by one R. L. Sholar. Both notes were made payable to the First State Bank.

Thereafter on May 29, 1929, the First State Bank instituted this suit in the district court of Rusk county, Tex., against the defendants R. L. Sholar, Wm. Morton Paxton, and the American Indemnity Company, which company had been the surety upon the fidelity bond of Paxton. The plaintiffs alleged that, during the life of his indemnity bond, Paxton had wrongfully abstracted or willfully misapplied certain moneys belonging to the plaintiff bank, in that the moneys obtained from it by reason of the execution by him of his $1,250 note did not represent a bona fide loan by it to him, and that the transaction was done by him without the consent of the board of directors of the bank, in that the moneys obtained from the bank by reason of the $2,500 note signed by R. L. Sholar and payable to the bank were in fact received by him and not by Sholar, the transaction having been a simulated one in which Paxton and Sholar joined for the purpose of enabling Paxton to obtain money from the bank which he could not by law borrow from it.

The defendant Paxton filed a statutory plea of privilege to be sued in Harris county, the county of his residence. The plaintiff filed a controverting affidavit to this plea of privilege, against which controverting affidavit the plaintiff Paxton urged general and special exceptions, which were overruled by the court. And upon the hearing of the plea of privilege, the court overruled the same, to which action of the court the defendants excepted and gave notice of appeal to this court.

Immediately after the ruling on the plea of privilege, the court proceeded to try the case upon the merits, and by agreement of the parties, the cause was withdrawn from the jury and was tried before the court, resulting in a judgment rendered on February 5, 1931, in favor of the Tatum State Bank and against Paxton and the indemnity company, both jointly and severally, for the sum of $3,250, and that the plaintiff take nothing in its suit against R. L. Sholar. To this judgment the defendants Paxton and the American Indemnity Company duly excepted and gave notice of appeal to this court, and said cause is now before this court for review.

Error is assigned to the action of the court in overruling and not sustaining the general demurrer and certain special exceptions of the defendant Paxton to the affidavit of plaintiff controverting his plea of privilege.

The material allegations contained in the affidavit of plaintiff controverting defendant Paxton's plea of privilege are as follows:

"Now comes the First State Bank of Tatum, Texas, Plaintiff in the above entitled and numbered cause and controverts and answers the plea of privilege filed by the defendant Morton Paxton and says, the District Court of Rusk County has jurisdiction and should retain the right to finally dispose of this cause, because the cause of action asserted by plaintiff alleges and the proof will show that Morton Paxton, the defendant who filed the plea of privilege, committed fraud and defalcation in that he conspired with one of the other defendants to take and did take moneys and valuables belonging to the First State Bank of Tatum, Texas, all of which was done in Rusk County, Texas.

"Plaintiff would further show that the defendant Morton Paxton did in Rusk County, Texas, commit a trespass by converting moneys belonging to the First State Bank of Tatum, Texas, all of which was done in Rusk County, Texas.

"Wherefore plaintiff prays that this matter be set down for a day certain and that upon a hearing that the defendants' plea of privilege be not granted."

These allegations were challenged by general demurrer and special exceptions filed by the defendant Paxton, upon the...