Texas State Bank v. First Nat. Bank

• Decision Date: 28 March 1914
• Docket Number: (No. 7880.)
• Citation: 168 S.W. 504
• Parties: TEXAS STATE BANK OF WALNUT SPRINGS et al. v. FIRST NAT. BANK OF MERIDIAN et al.
• Court: Texas Court of Appeals

168 S.W. 504

TEXAS STATE BANK OF WALNUT SPRINGS et al. v. FIRST NAT. BANK OF MERIDIAN et al.

(No. 7880.)

Court of Civil Appeals of Texas. Ft. Worth.

March 28, 1914.

Rehearing Denied May 23, 1914.

Appeal from Bosque County Court; S. P. Hale, Judge.

Action by the First National Bank of Meridian and others against the Texas State Bank of Walnut Springs and others, in which defendants filed a plea over against W. A. Lee. From judgments for plaintiffs against defendant bank and for defendant bank against defendant Lee, both defendants appeal. Affirmed as to the bank and reversed and remanded as to Lee.

H. S. Dillard, B. J. Word, J. P. Word, and S. H. Lumpkin, all of Meridian, for appellants. Cureton & Cureton, of Meridian, and Davis & Cocke, of Waco, for appellees.

DUNKLIN, J.

Will Gotcher forged the name of W. B. Griffin to a check drawn on the Farmers' State Bank of Meridian, Tex., for $800, payable to N. W. Murffey or bearer. Gotcher representing himself to be Murffey, the payee, presented the check to B. E. Seale, cashier of the Texas State Bank of Walnut Springs, Tex., to be cashed, telling Seale that he had just sold some mules to W. B. Griffin, and that the check was given for the purchase price of same. He was a stranger to Seale at that time, but represented that he was a neighbor of Griffin. He stated that he desired to open an account with the Texas State Bank of Walnut Springs, and desired $450 in cash on the check, and $350 to be deposited to his credit in that bank. The cashier complied with this request, and forwarded the check to its correspondent bank at Waco for collection, having first indorsed it as follows:

"Pay to the order of any bank, banker, or trust company. Previous indorsements guaranteed. Texas State Bank of Walnut Springs, Texas."

The bank who first received it for collection was the Citizens' National Bank of Waco. That bank forwarded it to the City National Bank of Galveston, who in turn sent it to the First National Bank of Meridian. The bank last named presented it to the drawee, the Farmers' Guaranty State Bank of Meridian, who refused payment because W. B. Griffin, whose name appeared as drawer of the check, had no account in that bank. But W. B. Griffin did have an account with the First National Bank of Meridian at that time, and the officers of that bank, acting upon the supposition that W. B. Griffin had intended to draw the check upon that bank, instead of the drawee bank, stamped the name of the First National Bank of Meridian, Tex., on the face of the check just above the name of the drawee bank, then charged it to W. B. Griffin, and forwarded the amount of the check to the Galveston bank. Through the Galveston bank and the Waco bank the amount so collected was paid over to the Walnut Springs bank. Later the First National Bank of Meridian was informed by Griffin that the check was a forgery, and his account thereupon was credited with the amount of the check that had been charged against him. The cashier of the Walnut Springs bank, having been informed of the forgery, paid over to the First National Bank of Meridian $350 which had been placed to the credit of the forger, and which had never been drawn out by him, but refused to pay the balance, $450, which Gotcher had already collected.

Thereupon the First National Bank of Meridian instituted this suit against the Walnut Springs bank to recover such balance. In its petition plaintiff alleged substantially that defendant was guilty of negligence in purchasing the check without detecting the forgery; that Gotcher was a stranger to defendant's cashier at the time, and that the cashier had the means and opportunity of ascertaining whether or not the signature to the check was genuine, and was charged with the duty so to do before purchasing and forwarding the check for collection, and that by his acts in so purchasing, indorsing, and forwarding the check for collection plaintiff was led to believe that the check was genuine, and, acting upon such belief, paid it.

In its answer to plaintiff's petition, the defendant bank pleaded a general denial, and specially that plaintiff, in cashing the check purporting to have been signed by W. B. Griffin, who was a depositor of that bank, without discovering the forgery, was guilty of negligence precluding a recovery; and by way of a special refutation of the charge of negligence against it further alleged the circumstances recited above under which defendant bank accepted the check from Gotcher and paid him the $450 and deposited the balance to his credit.

Defendant also filed a plea over against W. A. Lee alleging that Gotcher paid the $450 he had received from defendant bank to Lee. Defendant further alleged that at the time Lee received the money he knew, or had reason to believe, that Gotcher had obtained it from defendant bank by fraud, and by committing forgery, and that Lee had paid no consideration therefor. It was further alleged that after Lee received the money, and while all the means which he possessed for enforcing any demand he held against Gotcher were still available to him, he was advised by defendant bank of such forgery; notwithstanding which he refused to pay over the money to defendant bank, and converted it to his own use. A prayer for recovery against Lee was predicated upon the facts so alleged. In addition to a general denial of the facts alleged in the plea over against him, Lee alleged negligence on the part of defendant bank in paying the money to Gotcher, a stranger, without making any effort to discover whether or not the check was genuine; further, that if any part of the money was paid to him he received it in good faith and in due course of trade, without any notice of the forgery; that he had credited the payment upon a valid debt owing to him by Gotcher, which was well secured by chattel mortgage on stock of value in excess of the amount of money so received; and that it will now be impossible to reinstate such original debt and security.

The testimony showed without controversy that soon after the transaction between Gotcher and defendant bank Gotcher paid to Lee $450 on a note he owed to Lee, and to secure which he had executed a mortgage on about 60 head of cattle.

The transaction between Gotcher and defendant bank was through B. E. Seale, its cashier, who after identifying the forged check, testified as follows:

"The party who presented that check to the bank passed his name as N. M. Murphree, but afterwards I learned his name was Gocher. Mr. Gocher came into the bank, and I was at the window, and I saw he was a stranger, and introduced myself to him, and he said Murphree was his name, and that he wanted to open an account with us. I asked him where he was from, and he said he was a neighbor of W. B. Griffin, and said he had sold Mr. Griffin some mules for $800. He handed me a check for $800 and said he wanted $450 in cash, and wanted credit for $350. Yes; he had the check already written out when he came in the bank. My impression at the time was that the check was drawn on the First National Bank of Meridian. I knew that Mr. Griffin was a customer of the First National Bank of Meridian, while it was my impression at the time it was on the First National Bank of Meridian, but it was listed by Mr. Rushing (defendant's bookkeeper) as being on the Farmers' Guaranty State Bank of Meridian. I think there were some marks on the check, but I may be mistaken about this. It is my recollection that there was. I paid Gocher $450 in cash, and gave N. M. Murphree credit for $350. I put it in N. M. Murphree's name on my books. I paid him all this money in currency. I did not ask him for indorsements, because he was opening an account with the bank, and if I had asked him to get somebody to identify him he might have said that he would go to the other bank. As soon as I cashed the check I called Mr. Rudasill up over the telephone and asked him if he would pay the check, and he said he would pay it. Had he said he would not pay the check I could have gotten the money from him before he left town. Yes; Gocher and myself were the only men in the bank at the time the check was cashed."

J. M. Rudasill, president of plaintiff bank, testified as follows:

"I remember a telephone conversation with Mr. Seale, of the bank of Walnut Springs, about the date the check in controversy was cashed. Mr. Seale called me up and asked me if I would pay W. B. Griffin's check on our bank for $800, and I told him I would pay a check for that amount. Yes; our bank did pay a check purporting to be signed by W. B. Griffin for that amount. Yes; I have seen that check before. No; that is not W. B. Griffin's signature."

C. W. Tidwell, active vice president of plaintiff bank, testified with reference to the check:

"I do not know whether I saw this check until after it was paid and the forgery discovered or not. It is a frequent occurrence for checks to come to our bank drawn on other banks. Sometimes this happens two or three times a day, and sometimes not oftener than once or twice a week. We frequently have checks drawn by customers of ours on checks of other banks. We sometimes present these checks to the other banks for collection, and if they do not pay them we decide the check was intended for our bank. Yes; we keep the signatures of some of our customers; if a new man comes in we take his signature. No; I would not take the signature on this check as the signature of Mr. Griffin. I cannot tell which one of our employés took this check over to the other bank when it came to us. Yes; Mr. Griffin had a deposit in our bank at that time of the payment of the check. I think if I had looked at the signature at the bottom of that check I would have known that it was not W. B. Griffin's signature."

The trial judge instructed the jury to return a verdict in favor of the plaintiff against defendant bank for the $450 sued for, with interest, which was done.

Upon the plea...