Whitehead v. City Nat. Bank in Wichita Falls

• Court: Texas Court of Appeals
• Writing for the Court: Speer
• Citation: Whitehead v. City Nat. Bank in Wichita Falls, 140 S.W.2d 967 (Tex. App. 1940)
• Decision Date: 17 May 1940
• Docket Number: No. 14095.,14095.
• Parties: WHITEHEAD v. CITY NAT. BANK IN WICHITA FALLS et al.

Page 967

140 S.W.2d 967

WHITEHEAD v. CITY NAT. BANK IN WICHITA FALLS et al.

No. 14095.

Court of Civil Appeals of Texas. Fort Worth.

May 17, 1940.

Rehearing Denied June 7, 1940.

Appeal from District Court, Tarrant County; Bruce Young, Judge.

Action by H. G. Whitehead against the City National Bank in Wichita Falls and others, in which defendant named filed a plea of privilege. From a judgment sustaining the plea of privilege, plaintiff appeals.

Reversed, and judgment directed overruling plea of privilege.

Henry R. Bishop, Houtchens & Houtchens, Lloyd H. Burns, and J. Harold Craik, all of Fort Worth, for appellant.

Bullington, Humphrey & Humphrey, of Wichita Falls, for appellee City Nat. Bank in Wichita Falls.

SPEER, Justice.

This is an appeal from a judgment of the District Court of Tarrant County, sustaining a plea of privilege.

H. G. Whitehead sued H. L. Stripling, a resident of Tarrant County, K. B. Connor, a resident of Dallas County, and City National Bank in Wichita Falls, a banking corporation with its place of business and domicile in Wichita County, Texas. The defendant bank filed its plea in abatement and subject thereto, its plea of privilege, claiming its right to be sued in Wichita County. The parties will carry the same designation here as in the trial court, except when necessary to designate them by name.

The plaintiff instituted his suit against the named defendants, seeking a joint and several judgment against all. The defendant bank timely filed its plea of privilege and plaintiff controverted it by a plea which is substantially the same as his amended petition. The controlling point in the appeal is, did the controverting plea allege a joint and several liability to plaintiff as against the bank and the resident defendant Stripling?

The controverting plea covers twelve pages of the transcript, but in the interest of clarity we feel impelled to give a sufficient summary of the document to enable us to make our discussion of the issue intelligible.

It is alleged in the controverting plea, substantially, that on April 4th, 1939, defendant Stripling, a resident of Tarrant County, Texas, executed and delivered to plaintiff a check drawn on City National Bank, Wichita Falls, Texas, in the sum of $7,000, payable to plaintiff or bearer, signed by Stripling; it bore on its face this notation: "Payment for one-fourth H. G. Whitehead interest in Calvin Brown royalty, Gregg County." That check was endorsed, "H. G. Whitehead, K. B. Connor, Bob Whitehead." That Bob Whitehead had no interest in the transaction; that Connor was related to Stripling, was interested with him in the purchase of said royalty and acquainted with Stripling's financial ability to pay; plaintiff refused to accept Stripling's check and Connor endorsed it to induce its acceptance, but for which endorsement plaintiff would have refused it; that by said endorsement Connor obligated himself jointly with Stripling for its prompt payment when presented to the Wichita Falls bank. That upon receipt of the check plaintiff endorsed it and deposited it with First National Bank of Odessa, Texas, for collection. That the Odessa bank, in due course of business, promptly sent the check to its correspondent, the Fort Worth National Bank, with the written request to collect it and "wire fate." That the words, "wire fate", in common usage among bankers, meant that the bank on which the check was given would promptly wire the sending bank, at Odessa, whether or not said check had been paid promptly when presented. That the Fort Worth bank received the check and forwarded it in due course of business to the Wichita Falls bank, on which it was given, with instructions to "wire fate", meaning that defendant Wichita Falls bank should wire the Fort Worth bank within 24 hours after its receipt whether or not the check had been paid.

It is further alleged that defendant City National Bank in Wichita Falls received the check from the Fort Worth Bank on April 8th, 1939, and did not wire fate thereon nor notify the Fort Worth bank as to whether or not payment had been made, but held same until April 13th, 1939, before advising either the Odessa or Fort Worth bank whether the check had been paid or refused. That from April 8th, 1939, until April 13th, 1939, defendant City National Bank in Wichita Falls failed and refused to wire fate of the check, but thereby held it an unreasonable and unlawful length of time before performing said duty of wiring the fate of the check. That on said April 13th, 1939, the defendant bank returned the check unpaid to the Fort Worth bank, with notation thereon, "Payment refused."

Further allegations were made that Stripling had no account with Wichita Falls bank; that the bank knew from the notation on the check that it was given for purchase of plaintiff's royalty, and was charged with the duty of acting promptly upon receipt of it and wire fate within twenty-four hours, but that in a desire to aid Stripling it held the check for an unreasonable and unlawful length of time under an agreement with Stripling to enable him to raise funds with which to make payment; that said conduct, delay and joint action by the bank with Stripling were wrongful and illegal, thereby causing plaintiff to sustain the loss of his property, given in exchange for the check.

Allegations in the controverting plea further show that under the custom and practice of bankers, when a check is presented for payment with instruction from the sender bank to the paying bank to "wire fate", it is meant that the paying bank must either pay the check or wire the sender, within 24 hours after its receipt, that payment has not been made, giving the reason, and that a failure to so notify the sender, means the paying bank has accepted the item and becomes liable for its payment. That because of the acts of defendant bank in not wiring fate of the check and the holding by it of the item for the time shown, plaintiff was deprived of the right to repossess his property before it was transferred to innocent purchasers, and the defendant bank became jointly and severally liable with Stripling for its payment to plaintiff. Prayer was for this relief.

The evidence presented upon the trial of the issue sustains the contention of plaintiff relating to the liability of the resident defendant Stripling. The judgment entered by the trial court sustained the plea of privilege filed by defendant bank in Wichita Falls. In that judgment this language is found: "* * * and that it never at any time was a resident of Tarrant County, Texas, and that no exception to exclusive venue in the county of one's residence provided by law exists in this cause, so as to confer jurisdiction and venue over the defendant City National Bank in Wichita Falls, in the courts of Tarrant County, and that the cause of action asserted by plaintiff against the defendant City National Bank in Wichita Falls, and the alleged resident defendant H. L. Stripling, is not a joint and several cause of action."

We have concluded that the trial court erred in sustaining the plea of privilege upon the grounds above indicated.

It is now well settled that the venue issue is made up of the plea of privilege by a defendant and the controverting affidavit of the plaintiff, who seeks to hold venue in a county other than the residence of the defendant. The burden of proof is upon the plaintiff to establish that right by showing that one of the exceptions to exclusive venue exists as provided by Article 1995 and the exceptions thereunder. 43 Tex.Jur. sect. 109, p. 844; Compton v. Elliott, 126 Tex. 232, 88 S.W.2d 91; Farmers Seed & Gin Co. v. Brooks, 125 Tex. 234, 81 S.W.2d 675, and many decisions by the several Courts of Civil Appeals.

Exception 4 under Article 1995 confers venue on a non-resident defendant when sued jointly with a co-defendant residing in the county where the suit is instituted.

The construction of exception four has been the subject of much controversy by our courts, but it is now definitely settled that when venue is sought to be acquired under this exception, the action against both defendants must be instituted in good faith, and upon hearing, proof must be made showing a prima facie cause of action against the resident defendant and the pleadings must state a cause of action against the non-resident. The rule is established that the cause of action as alleged must be one in which the resident and non-resident defendants are properly joined or, stated another way, the action against the resident defendant must be shown to be one so...