Shaw v. Korth

• Decision Date: 18 December 1929
• Docket Number: No. 8294.,8294.
• Citation: 26 S.W.2d 351
• Parties: SHAW, Banking Com'r, v. KORTH.
• Court: Texas Court of Appeals

Page 351

26 S.W.2d 351

SHAW, Banking Com'r, v. KORTH.

No. 8294.

Court of Civil Appeals of Texas. San Antonio.

December 18, 1929.

Rehearing Granted February 5, 1930, and Overruled March 19, 1930.

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

Suit by James Shaw, Banking Commissioner of Texas, as liquidator of the Yoakum State Bank, against Robert P. Korth. From judgment for defendant, plaintiff appeals.

Reversed and remanded on motion for rehearing.

Spencer, Rogers & Lewis, of San Antonio, for appellant.

H. W. Wallace, of Cuero, for appellee.

COBBS, J.

Appellant filed this suit in De Witt county, in his official capacity as banking commissioner of the state of Texas, in charge of the Yoakum State Bank, an insolvent state bank taken over by the commissioner for the purposes of liquidation. The suit was upon a promissory note in the sum of $5,000, executed by appellee, Robert P. Korth, payable to the order of "myself" and indorsed in blank by appellee. The note was an asset of the Yoakum State Bank. It provided for interest at the rate of 8 per cent. per annum from maturity and provided for 10 per cent. attorneys' fees.

Appellee answered with a plea in abatement to the effect that the banking commissioner was unauthorized to bring suit because no receiver had been appointed for the bank by the district court as provided for in articles 370 and 371 of the Revised Civil Statutes. He specially excepted because plaintiff's petition did not allege that the bank came into the hands of the commissioner voluntarily and because the petition did not allege that the commissioner appointed some competent person to wind up the affairs of the bank in lieu of a receiver.

The plea in abatement and the special exceptions were overruled.

Appellee further answered under oath that he received no consideration for the execution of said note, and that the note was executed as a matter of fact for the accommodation of the Yoakum State Bank.

He answered in detail that the officers of the bank came to him and represented that the bank held a large amount of promissory notes owing to it by cattlemen some time during the year 1921, and that the bank desired to be relieved of some of these notes, and for this purpose they had "formed a plan to undertake to get some measure of relief from the agencies and corporations formed and projected under the laws of Congress, such as the War Finance Corporation and the Federal Intermediate Credit Bank and that in order to do so they would organize and incorporate some sort of cattle loan company and would, through the operation of such plan and such corporation, relieve Yoakum State Bank of a large amount of its cattle loans." Pursuant to this plan he alleges that the officers of the bank requested him to execute the original $5,000 note to enable the bank to carry out its policy and purposes and promised him that the bank would not sell, negotiate, or collect said note, but would cancel the same and return it to him at the end of six months.

He further alleges that he was induced by these promises and statements to execute the original note some time in 1922 and delivered it to either Philip Welhausen or M. C. Driscoll, officers of the bank, with the understanding that it should be delivered to the Yoakum State Bank for its temporary accommodation and assistance, and that at or before the maturity of said note it would be canceled and returned to him and he would not have to pay it; that the bank would not sell or negotiate it.

He alleges further that he renewed the note from time to time at the request of these same officers, and at each renewal the representations and promises were repeated.

Appellee further alleged that the charter of the bank expired in August, 1927, and that the officers, Philip Welhausen and M. C. Driscoll, obtained a new charter in some way not fully known to the defendant and continued the operation of the bank under such new charter.

He alleged further that the new bank had no capital stock, that no capital stock was paid in, and that the new bank took the note sued on, or one of the notes of which it is a renewal, with full knowledge of all the facts.

He further alleges that in January, 1928, the bank was in financial distress, and that he called upon the officers for the note, and that they told him that they had preparations complete to pay into the bank a large sum of money, and that when that was done they would immediately cancel his note and send it to him.

Appellee pleaded further that plaintiff was not an innocent purchaser in good faith of the note and prayed that plaintiff take nothing by his suit. This pleading was duly verified.

Upon a trial of the case before the court, judgment was rendered in favor of the defendant. Plaintiff excepted, gave notice of appeal, filed assignments of error, and the case is here for review.

The court filed his findings of fact and conclusions of law in substance substantially as the facts were pleaded by appellee, concluding as a matter of law that the note was an accommodation note, that Yoakum State Bank was the party accommodated, and that the Yoakum State Bank, the new corporation organized after the expiration of the charter of the old bank, was not a holder of said note for value.

As appellee has admitted that the foregoing statement of the case is practically correct, we have copied it from appellant's brief. The case was tried by the court, without a jury, who made and filed his findings of fact and conclusions of law, resulting in a judgment for the appellee. Having fully examined it in connection with all the testimony, we may as well at the outset say it is supported by the testimony.

The ultimate and essential question presented, without discussing each proposition separately, is whether or not the note upon which appellant sued was an accommodation note, given to the bank at the request...