Republic Heater Co. v. First-Wichita Nat. Bank, FIRST-WICHITA
| Decision Date | 12 February 1971 |
| Docket Number | No. 17173,FIRST-WICHITA,17173 |
| Parties | REPUBLIC HEATER COMPANY, a Division of Briggs Manufacturing Company, Appellant, v.NATIONAL BANK OF WICHITA FALLS, Appellee. |
| Court | Texas Court of Appeals |
Irion, Cain, Magee & Davis, Don W. Davis, and Tedford E. Kimbell, Dallas, for appellant.
Nelson Montgomery & Robertson, and Charles B. Russell, Wichita Falls, for appellee.
This is an appeal from a summary judgment rendered in favor of the defendant, The First-Wichita National Bank of Wichita Falls, decreeing that the plaintiff, Republic Heater Company, take nothing from the defendant Bank.
The plaintiff had sued one Ken Solesbee for $7,780.00 which was the price of 200 hot water heaters that plaintiff had sold to Solesbee.
In that same petition (paragraphs 6 and 7) plaintiff had alleged a cause of action against the Bank for damages for fraud and deceit.
In connection with the summary judgment hearing the trial court severed the case against Solesbee from the case the plaintiff pleaded against the Bank. He then rendered the summary judgment in favor of the Bank and the plaintiff's case against Solesbee still pends.
Depositions of Mr. Solesbee, Mr. Flack, a Vice-President of the Bank, and Mr. Schneeberg, Credit Manager of the Heater Company, constituted the evidence at the summary judgment hearing on which the trial court decided the case.
There was some evidence to the following effect in those depositions: Mr. Solesbee was in the wholesale plumbing supply business; in late August, 1969, he ordered from plaintiff 200 hot water heaters for a total price of $7,780.00; Solesbee had previously placed smaller orders with plaintiff and because Solesbee had been slow in paying for such orders, the plaintiff's credit manager, Mr. Schneeberg, would not sell or ship the heaters in question to him unless definite arrangements were made for payment; Solesbee asked Schneeberg to call Mr. Flack at the Bank and this was done; Schneeberg asked Mr. Flack to put into writing what Flack had told him over the phone and Flack, as Vice-President of defendant Bank, then wrote to plaintiff the following letter:
'September 29, 1969
'Mr. William H. Schneeberg
'Republic Heater Company
'Division of Briggs Manufacturing Co.
'1400 West Commerce
'Dallas, Texas 75208
'Dear Mr. Schneeberg:
'This refers to a recent order placed with your company by Ken Solesbee Supply Company for 200 hot water heaters.
'Sincerely,
'Al Flack, Jr.
'Vice President'
Evidence at that hearing further showed: upon receiving the letter from the Bank and in reliance thereon plaintiff approved Solesbee's order and shipped the heaters to him; plaintiff would not have filled the order if it had not been for Mr. Flack's letter; Mr. Flack was a Vice-President of the Bank and had for some time handled Solesbee's dealings and loans at the Bank; Solesbee went out of business in about December, 1969, and from that time on the Bank would not loan him money with which to pay this bill; the money that Solesbee got from a sale of these heaters was used by him to pay off a debt that he owed to defendant Bank; Solesbee is now working for others for a salary; plaintiff has asked him several times to pay for the heaters; the bill for them is now past due and is unpaid; and when Solesbee wrote the check to the Bank and paid off his debt to them in December, 1969, shortly before he closed down, this check practically depleted the funds in his account; and the reason Solesbee closed his business was because of a lack of operating capital.
Flack testified in substance as follows: that the letter in question fairly reflects the assurances he gave Schneeberg; that he understood that the Heater Company was not going to give Solesbee open account credit on those 200 heaters; that when Solesbee first mentioned the heater transaction to him Flack told him that if he needed a small additional amount when it came time to pay for the heaters that the Bank would loan it to him; and that the Bank has never yet loaned Solesbee the money with which to pay for the heaters.
The following is a part of the testimony Solesbee gave when testifying on the question of whether or not he ever actually made the necessary arrangements with the Bank to get the money from them with which to pay for the hot water heaters:
Plaintiff's pleading relating to this fraud count was in part as follows:
'That the Defendant Bank in voluntarily writing the letter attached to this petition as Exhibit A made false or negligent representations concerning a material matter under the circumstances as set out in Paragraph 6; that said representations were untrue and misleading; that the Plaintiff was induced to enter into the transaction made the basis of this lawsuit by these representations; that the Plaintiff was unaware of their falsity; that the facts set out in Paragraph 6 show the right of this Plaintiff to rely on said representation and the fact that it did rely thereon and was deceived and damaged thereby; Defendant Bank by the act of voluntarily writing such a letter committed fraud and deceit against this Plaintiff, by which the Plaintiff was damaged as set out in Paragraph 6 above.'
The elements of an actionable fraud case are: (1) a false representation of a material fact; (2) reliance thereon by a person entitled to rely thereon; and (3) resulting injury. First State Bank of Corpus Christi v. Von Boeckmann-Jones Co., 359 S.W.2d 171 (); Morgan v. Box, 449 S.W.2d 499 ().
The burden was on the moving party (the Bank here) at the summary judgment hearing to establish as a matter of law that one or more of the essential elements of the fraud case pleaded by plaintiff were not present. The Bank had the burden of showing that under the facts established as a matter of law at the summary judgment hearing it was entitled to the judgment sought. Seale v. Muse, 352 S.W.2d 534 (Dallas Tex.Civ.App., 1961, ref., n.r.e.), and Neigut v. McFadden, 257 S.W.2d 864 (El Paso Tex.Civ.App., 1953, ref., n.r.e.). The following is from the opinion in this last case at page 868: 'A defendant moving for a summary judgment in order to prevail assumes the negative burden of showing as a matter of law that the plaintiff has no cause of action against him.'
We hold that the Bank did not discharge its burden in this case and that the trial court erred in granting a summary judgment in favor of the Bank.
The letter from the Bank to plaintiff, Heater Company, stated: '* * * this is to advise you that Mr. Solesbee has made the necessary arrangements to secure the money from our bank to pay for this order of heaters if he needs additional funds.'
This was a representation of a material fact under the circumstances of this case. There is considerable evidence that plaintiff relied on this representation and was thereby induced to sell the 200 water heaters to Solesbee on open account credit.
The evidence which we have heretofore quoted verbatim from the deposition of Mr. Solesbee was sufficient to at least create a fact issue as to whether or not the Bank's representation of fact was false. In other words, that quoted testimony could be construed to mean that Solesbee had not prior to that time made necessary arrangements with the Bank to secure the money from the Bank with which to pay for the heaters.
We recognize that a reading of Mr. Solesbee's...
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