Ray v. Farmers State Bank of Hart, B-7649

• Court: Supreme Court of Texas
• Citation: 576 S.W.2d 607
• Docket Number: No. B-7649,B-7649
• Parties: 25 UCC Rep.Serv. 779 Nora RAY, Petitioner, v. FARMERS' STATE BANK OF HART, Texas, Respondent.
• Decision Date: 17 January 1979

Page 607

576 S.W.2d 607 25 UCC Rep.Serv. 779 Nora RAY, Petitioner,
v.
FARMERS' STATE BANK OF HART, Texas, Respondent. No. B-7649. Supreme Court of Texas. Jan. 17, 1979.

Moran & Miller, Dimmitt, Whittenburg Law Firm, Amarillo, Cary Schachter, Amarillo, for petitioner.

Gibson, Ochsner, Adkins, Harlan & Hankins, A. B. Hankins and Danny M. Needham, Amarillo, for respondent.

POPE, Justice.

The question presented is whether Mrs. Nora Ray, the drawer, or Farmers' State Bank of Hart, Texas, the drawee, is liable for the loss occasioned by a check that a third party altered. In a case tried before the court without a jury, Mrs. Ray recovered judgment for $1,850.00, which was the amount of the alteration. The court of civil appeals reversed the judgment and rendered judgment that Mrs. Ray take nothing. 565 S.W.2d 103. We reverse the judgment of the court of civil appeals and affirm that of the trial court.

The controlling issue in the case is whether Mrs. Ray was negligent as a matter of law. On May 7, 1975, Mrs. Ray, an eighty-year-old lady, was awakened from a nap by a man who was shaking the screen to her front door. He gave his name as Robert Freeman, said he worked for the utility company, and that he needed to check the electrical system of her home because the power was off along the block. Mrs. Ray testified that when she unlatched the screen to look down the street for a utility vehicle, Freeman pushed his way inside the house. He went around the house placing a device

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in the electrical outlets and then went outside to check in the garage. While he was outside, as she later discovered, he cut the telephone wire to her house. Upon returning, he told Mrs. Ray that he was not through, but that he was awaiting the arrival of someone else from the utility company. He said that he was going to get a hamburger and would return after lunch, but that she should give him $1.50 for the service charge. Mrs. Ray testified that she could not see what he had done to earn $1.50 but was willing to give him the money to get him out of the house. She reached for her purse, but Freeman picked up her checkbook that was lying on the table telling her that his company required payment by check. He proceeded to fill it in, then shoved it over to her to be signed. She noted to herself that the check was for $1.50 and was in ink so it couldn't be changed. She signed the check and Freeman left.

After waiting a considerable period of time, Mrs. Ray concluded that Freeman was not going to return. She decided to phone the bank to stop payment on the check because he had not earned the money. She then discovered the phone was dead. Mrs. Ray walked down the street to use a neighbor's phone but could find nobody at home. About two hours later, when she finally talked to a lady at the bank, she learned that Freeman had cashed the check and that it was for $1,851.50 instead of $1.50.

When Freeman filled out the check at Mrs. Ray's home, he wrote the figures "1.50" far to the right of the dollar mark, leaving space in which he later added the figures "185". That made the amount appear as $1,851.50. There is some evidence that he also left space on the next line where he wrote the words "one and 50/100". He later placed in front of those words, "Eighteen Hundred & Fifty."

When Freeman presented the check at the bank, the teller required him to produce identification which he did by showing his driver's license and another identification card that showed his picture. Freeman had endorsed the check and beneath his signature he had stamped the words, "Allied Construction and Commercial-Residential."

The trial court made a number of findings of fact and also filed conclusions of law. The findings relevant to this appeal are:

1a. The Defendant Bank paid the check in question in good faith and in accordance with the reasonable commercial standards of the Bank's business.

2a. The Defendant Bank paid the check in due course of its banking...