author: DESLIE, J.

text:
    CITY OF SWEETWATER v. FOSTER.
    No. 786.
    Court of Civil Appeals of Texas. Eastland.
    March 20, 1931.
    Dabney, Goggans & Ritchie, of Dallas, Earl Earp and Jas. H. Beall, Jr., both of Sweetwater, for appellant.
    Hamner & Ponder, of Sweetwater, for ap- - pellee.
   DESLIE, J.

The plaintiff, city of Sweetwater, “suing for the use and benefit of the West Texas Construction Company, a corporation,” instituted this suit against the defendant, J.. B. Foster, to recover the principal, interest, and attorney’s fees upon a paving certificate issued by the city of Sweetwater to said company for paving done by it in front of property belonging to the defendant in said city. The improvement was made in accordance with the city charter, the ordinances, and the contract for the same between the city and the construction company. The defendant, Foster, filed plea in abatement, which was answered in detail by the plaintiff, and, upon full hearing, the trial court sustained the plea and dismissed the suit. From that judgment the plaintiff appeals. Omitting formal parts, the defendant sought to abate the suit on the following grounds:

“1. Because said City of Sweetwater does not now, nor did it when this suit was filed, have any right, title, interest, claim or demand, either legal or equitable, in the cause of action sued upon; but as appears from plaintiff’s petition herein filed, it issued certificates evidencing the cause of action sued on and the indebtedness sued for, which were and are payable to the West Texas Construction Company, and that said West Texas Construction Company was, at the time this suit was filed, and is now, both the legal and equitable owner and holder of said certificates and the indebtedness herein sued for, and said West Texas Construction Company is a corporation and is not an infant, minor or insane person, and there are no reasons alleged why the City of Sweetwater is a proper party to this suit.
“2. The contract under which the certificates were issued, and which is alleged to have been made by virtue of an ordinance duly passed and adopted December 10th, 1925, which said ordinance constitutes the contract under which this indebtedness arose, if at all, specially provides: ‘The City of Sweetwater shall not be in any manner liable for the payment of the sums hereby assessed against any property or the owners thereof, but the said West Texas Construction Company, or its assigns, shall looh solely to such property, and the owners thereof, for the payment of such assessments.' ”

The plaintiff, in answer to the plea, contended it should be overruled, and that it had authority to institute the suit in the manner indicated for the following reasons: (1) By virtue of tiie general laws of the state; (2) the charter of Sweetwater authorized it; (3) the ordinances of the city did likewise; ,(4) the contract between the city of Sweet-water and the construction company obligated the city to so institute the suit; and (5) the certificate evidencing the special assessment bond the city to institute the suit on demand of the owner of the assessment obligation for the benefit of the holder thereof.

The judgment of the trial court was evidently on the theory that: (1) “The general laws of Texas do not authorize cities to bring suits for the use and benefit of owners -of assignable certificates for paving assessments, and the provision in an ordinance to that effect is invalid because unconstitutional.” And (2) that: “The general laws of Texas provide that, where a party owns both the legal and equitable title to the cause of action, he must sue alone for the recovery thereon, and any ordinance providing differently is void.”

For such reasons, at least, the appellee contends that the judgment of the trial court should be affirmed by this court.

The appellant attacks the judgment by three propositions, briefly stated and in substance: (1) That the allegations of plaintiff’s petition and its .answer to the plea in abatement were sufficient as against the ap-pellee’s contentions to permit the filing of the suit in the name of the city for the use of the construction company; (2) that the municipal corporation had such justiciable interest in the subject-matter of the suit as to authorize the same as filed; and (3) that, the city having alleged in its petition that it was a municipal corporation, organized under the Home Rule Act, with charter provision, ordinance, contract, etc., authorizing the very suit by it on said special assessment obligation for the use of the construction company, and having sustained such allegations by sufficient testimony, it had a right to maintain the suit, and the plea should have been overruled.

This record present^ no question involving the validity of the assessment, and it appears that the city paid one-third of the value of such improvement, and that this suit is for the two-thirds of such value assessed against the defendant, the abutting property owner. Further, since about 1913 the city of Sweet-water has operated as a municipal government under the provisions of the Home Rule Act (now chapter 13, title 28, R. S. 1925), having availed itself of those provisions soon after its enactment. In 1915 the Legislature validated its charter, along with many others. At all times its charter provisions and ordinances gave it practically plenary powers over its streets and alleys, enabling it thereby to grade, improve, and pave the same, paying a portion thereof and assessing the balance against the abutting property owner, and securing such assessment by lien against such property, and otherwise making it a legal obligation of the owner. The provision of the charter in force at the time the obligation herein sued on was created is as follows:

“Said assessments, when levied, may be enforced either by suit in any court having jurisdiction brought; by the city for the benefit of the owner and holder of any such assessment, or of a certificate issued in evidence thereof, or brought by the said owner and holder, or' by the sale of the property assessed in the same manner as near as pos- • sible as is provided for the sale of real estate for municipal ad valorem taxes.”

In making the assessment and creating the obligation in the instant case, the provision of the charter above, with reference to the suit; by the city, was in substance brought forward and made a provision of the contract entered into by the city of Sweetwater and the West Texas Construction Company. It was likewise made a provision of the ordinance closing the hearing and levying of the assessment, and this language there appears:

“If default be made in the payment of any assessment * * * the said city shall exercise all of its lawful powers to aid in enforcement of and collection of said certificates and assessments.”

The certificate of special assessment provides, in case of default in payment of the same, .and upon demand of the legal holder thereof, that the city should “exercise its power to enforce and collect this certificate by suit in its own name for the benefit of the said holder or said company. * * * ”

Thus the entire proceedings embrace the assumed obligation on the part of the city to bring and prosecute suit for the benefit of the certificate holder on being requested so to do. Further, this suit was not brought by the city of Sweetwater essentially for itself, but as the agent or representative of the holder of the certificate. Nothing in the plea in abatement denies or challenges the authority of the city to represent the construction company as its agent in so bringing the suit, but the attack directed against the action of the city is as if it were bringing and prosecuting the suit to recover on the indebtedness in its own right.

This sufficiently states the record to reflect the issues presented. It may be added that courts take judicial notice of the charters of cities incorporated under the Home Rule Act (article 1174, R. S.) but not the city ordinances enacted thereunder. City of Amarillo v. Tutor (Tex. Com. App.) 267 S. W. 697-701.

It is also well settled that the provisions of such charters and ordinances must comply with, and not be in conflict with, nor. inconsistent with, the provisions of the Constitution or general statutory laws, but must be consistent therewith. City of Amarillo v. Tutor, supra; Cameron Water District v. Whittington (Tex. Civ. App.) 297 S. W. 868; City of Lubbock v. Magnolia Petroleum Co. (Tex. Civ. App.) 291 S. W. 660, affirmed (Com. App.) 6 S.W.(2d) 80; Brewer v. State, 113 Tex. Cr. R. 522, 24 S.W.(2d) 409.

This phase of the case will be later reverted to, but coming now directly to the points presented, and at this time considering the same in connection with the appellee’s second counter-proposition, we think the authority of the city of Sweetwater to bring and prosecute this suit, under the pleadings and testimony detailed, for the use and benefit of the holder of the indebtedness evidenced by the special assessment certificate, is sustained by an opinion of our Supreme Court in the City of Waco v. Chamberlain, 92 Tex. 207, 47 S. W. 527, 531. The facts in that case do not in all respects correspond with the facts of this case, but in the essential features there is such similarity that the opinion may be said to rule this case. In that case the contract was also between the city and the contractor, or one doing the paving. There the city paid one-third of the costs of the paving, and assessed the other two-thirds of the costs against the abutting property and its owner, creating a lien securing the -indebtedness. There the contract with the city stipulated that the contractor should look exclusively to the property owner and the property for the two-thirds of the costs so assessed against them, and it specifically exempted the city from any liability for that portion of the costs. No provision was there made for the suit by the contractor, and the city, without any right to appropriate to its use any portion of the judgment recovered, instituted a suit in the name of the city for the use and benefit of the holder of the paving claim. It is not disclosed in that case that the Waco charter provided that the city could sue for the benefit' of the contractor, nor does such authority appear in the ordinances referred to in the opinion, while in the present case such authority appears in the charter, the contract, the ordinance, and the paving certificate. In the Chamberlain Case the city’s authority to bring and prosecute the suit was challenged, and in disposing of the contention the Supreme Court said:

“We conclude * * * that the city of Waco could maintain this suit for the use and benefit of the contractor, Ockander. * * * It is ordered that the city of Waco, for the use of A. Oekander, have and recover of the defendants * * * the sum of $793.-91, with interest,” etc.

However, we are of opinion that the- charter provision above quoted, and which specifically authorizes the suit to be so instituted by the city of Sweetwater for the use and benefit of the construction company, is ample authority to justify the city of Sweetwater in so filing and prosecuting 'the same.

In view of the charter provision authorizing the suit by the city for the use and benefit of the construction company, nothing perhaps is added- by the fact that the spirit and substance of that provision have been carried forward into the ordinance, the contract, and the recitals of the certificate of assessment; but all of these provisions and circumstances, considered together, evidence an obligation assumed by the city to prosecute and bring a suit on request of the holder of the certificate, and therein is manifested the interest of the city in the subject-matter of the litigation, which we think authorizes the city, independently of other reasons, to file and prosecute the suit. From the entire transaction there appears the purpose and obligation of the city to maintain such interest in the assessment by which it procured the paving of its streets, thus discharging its obligation in that respect to the public.

In appellee’s first counter proposition it is contended that: “The general laws of Texas do not authorize cities to bring suits for the use and benefit of owners of assignable certificates for paving assessments.” We have concluded, after considerable research, that the general statutory laws at the time ‘and since the creation of the obligation herein sued on do not prohibit the institution by the city of Sweetwater of the instant suit. Such suits are at least not prevented by the statute, but are authorized by the charter sanctioned by statute. In the opinion in Blair v. City of Houston (Tex. Civ. App.) 252 S. W. 882, 885, a case in which the suit was prosecuted by the city for the use and benefit of a paving company, and under circumstances similar to those in the instant case, this language was used:

* * * But our law, in so far as we have been able to find — and we have not been shown anything to the contrary — does not prevent the city of Houston, in this case, from filing a suit, as it was expressly authorized to do by the provisions of - its charter granted by the Legislature of this state, in behalf of another who did work for the city under contract.”

The foregoing observation fits the situation in which we find ourselves in considering the question here presented. Evidently the charter rights of the city to sue in its own name, as in this case, -and for a like purpose, came before the court for a consideration, and its conclusions were as- above stated.

We have not undertaken to compare the provisions of the charter of Sweetwater with like provisions of other Texas cities wherein such cities are evidently authorized, to bring •and prosecute this character of suit for the use and benefit of the holder of said indebtedness, but evidently that authority is commonly granted and frequently exercised, as may be seen from the numerous cases in our reporter system. Although it does not appear from the opinion that the certificate holders were parties, or that the question of the right of the city to maintain the suit was ever raised, the cases are 'numerous, and some of them are: City of San Antonio, for Use and Benefit of Texas Bitulithic Co., v. Spears et ux. (Tex. Civ. App. San Antonio, 1918) 206 S. W. 703; City of Fort Worth et al. v. Capps Land Co. (Tex. Civ. App. Fort Worth, 1918) 205 S. W. 491; City of Corsicana et al., for Use and Benefit of T. W. Worthington, v. Mills (Tex. Civ. App. Texarkana, 1921) 235 S. W. 220; Massie v. City of Fort Worth, for Use and Benefit of Roach-Manigan Paving Co. (Tex. Civ. App. San Antonio, 1924) 262 S. W. 837; Blair v. City of Houston, for Use and Benefit of Creosoted Wood Block Paving Company (Tex. Civ. App. Beaumont, 1925) 273 S. W. 345; Johnson v. City of Fort Worth, for Use and Benefit of Roach-Manigan Paving Co. (Tex. Com. App. 1927) 299 S. W. 883; City of Ennis, for Use and Benefit of Central Bitulithic Co. v. Telfair et ux. (Tex. Civ. App. Waco, 1929) 22 S.W.(2d) 327; City of Wichita Falls, for Use and Benefit of L. E. Whitham & Co., v. Williams et al. (Tex. Sup. 1930) 26 S.W.(2d) 910. City of Waco v. Chamberlain, supra, is believed to settle the question.

The other phase of appellee’s counter proposition No. 1 is to the effect that “the provision in an ordinance (granting the right to the city to sue for the use of the owner of the paving assessment) is invalid because unconstitutional.” We have not been cited to any provision of the Constitution of the state condemning such provision in the charter of a home rule city, or in the ordinance of a city so governed, and we have found none. We do not think the Constitution condemns or prohibits the institution of such suits. It is generally recognized that, under our Constitution and the. statutory laws of Texas, parties plaintiffs may, by proper pleadings, bring and prosecute suits in their name for the use and benefit of others, instances of which frequently occur in suits under the “death statute,” Workmen's Compensation Uaw, and numerous others not necessary to mention. As applied to the facts of this case, there could be no constitutional objection to this character.of suit in which the plaintiff merely sues in a representative capacity, and the judgment upon the pleadings will necessarily be a complete protection to the defendant from any future recovery.

That there is no statutory inhibition against “a plaintiff suing for the use of another” plainly appears, by implication at least, from the language of article 2085, R. S., which reads as follows:

“When a plaintiff suing for the use of another shall die before verdict, the person for whose use such suit was brought, upon such death being suggested on the record in open court, may prosecute the suit in his own name, and shall be as responsible for costs as if he brought the suit.”

We discover nothing in the above-quoted provisions of the charter and ordinance, respectively, of the city of Sweetwater necessarily in conflict with the Constitution or the general statutory laws of the state. We sustain the appellant’s propositions, and for the reasons assigned the judgment of the trial court is reversed, and the cause remanded.


source: Caselaw Access Project

author: RANDODPH, J.

license: Public Domain

text:
    FIRST NAT. BANK OF WICHITA FALLS v. FIRST NAT. BANK OF BORGER et al.
    No. 3583.
    Court of Civil Appeals of Texas. Amarillo.
    April 1, 1931.
    Rehearing Denied April 15, 1931.
    J. T. Montgomery and Kilgore & Rogers, all of Wichita Falls, for appellant.
    Aynesworth & Aynesworth, of Stinnett, for appellees.
   RANDODPH, J.

The plaintiff, the First National Bank of Wichita Falls, instituted this suit in the district court of Wichita county, against the de-femdants First National Bank of Borger and the City National Bank of Wichita Falls, to recover of the said defendants money paid out l>y plaintiff upon a forged cheek, which payment was alleged to have been caused by the negligence of the defendants banks.

•The case was tried by the court without a jury, and judgment was rendered that plaintiff take nothing by its suit.

The trial court filed its findings of fact and conclusions of law.

The pleadings and the evidence disclose substantially that all the parties are national banking corporations; that one W. P. Collins was a depositor in the plaintiff bank, having money on deposit subject to his check; that on the 15th of October, 1929, there was presented to the Borger bank, by a person giving the name of J. B. Schulz, a check purporting to be signed by said Collins, but which was, in fact, a forgery, for the sum of $2,250, said check being payable to H. L. Haynes or order and with the names “H. L. Haynes” and “J. B. Schulz” indorsed thereon. The Borger bank accepted the check for collection without requiring identification of said Schulz of any kind, and, without actually indorsing same in any manner, sent said cheek to the City National Bank of Wichita Falls as a cash item.

F. W. Wasson, assistant cashier and teller of the First National Bank of Borger, testified that he handled and accepted the check in controversy and took it for collection; that he gave J. B. Schulz credit fop it with the understanding that he was not to get any money until the check was paid; that he had quite a conversation with Schulz as to his occupation and address; Schulz said he did not need any money then and would not want any until the check was paid; that he (Wasson) accepted the check himself on the 14th of October, 1929; that he had never known any person by the name, of H. B. Haynes or J. B. Schulz; that the person presenting the check was not known to him or to any one else in the bank so far as he knew. That he did not know W. P. Collins, and neither did any one in the bank so far as he knew. Schulz was not introduced or identified before acceptance of the check, and no identification was required of him. The witness does not know whether the names J. B. Schulz and H. L. Haynes were assumed or not.

Wasson further testified that it was an oversight that the check was not indorsed by the First National Bank of Borger; that it is the custom for banks to indorse items of that kind sent to their corresponding banks for collection.

It appears that the Borger bank received the check on the 14th of October 1929; that one of the tellers paid to Schulz the sum of $500 on the 16th of October, 1929, and $1,750 on October 17, 1929, about 11 o’clock, a. m. Wasson gave Schulz credit on the books and he gave the bank two checks for the money. The two cheeks as named above were introduced in evid'ence. No investigation was made before the money was paid. No introduction or identification was required at that time. There was nothing in Schulz’s actions to create suspicion. The check was deposited by Schulz for collection, because, as Was-son says, he did not know the maker of the check and did not know whether it was good or not. He testified; “I did not know the genuine signature of the purported maker of the check and I desired to have the First National Bank of Wichita Falls pass upon it before advancing any money. Yes, this is the custom of all banks to send the checks to the bank drawn upon either directly or indirectly for the purpose of having the genuineness of the signature of the maker passed upon.”

There is no question before us but that the check purporting to be signed by W. P. Collins and drawn on the First National Bank of Wichita Falls was a forgery.

The forged check was sent by the Borger bank to its correspondent, the City National Bank of Wichita Falls, as a cash item, and was apparently received as such, but the officials of the Borger -bank testified that the check was only accepted for collection, and that the sending of same as a cash item was an error.

It appears that, according to the custom of banks, when the City National Bank, as correspondent, received the cheek from the Borger bank, it supplied the indorsement of the Borger bank and turned the cheek in to the clearing house, where the First National Bank of Wichita Falls received it, and on the same day paid it off by charging it to the account of its customer, W. P. Collins. When the cheek reached the plaintiff, First National Bank, the officer receiving it called another official of that bank, and, on inspection of the check, the two, comparing it with the genuine signature of Collins which was on file in bank, decided it was the genuine signature of Collins, charged.it to him, and remitted the money to the Borger bank.

The fact that the check was received by the.Borger bank as a collection item, but was sent to the City National Bank as a cash item, is immaterial, as we view the case. In either event, it appears to us that the responsibility of the plaintiff, First National Bank of Wichita Falls, would be the same in the matter of their duty in detecting the forgery when presented to them. Neither can that bank rely on the guaranty of the Borger bank to protect it against loss, as such guaranty only covers all prior indorsements and was no voucher for the genuineness of the signature of the maker of the cheek.

“ * * * If a drawer’s name lias been forged, the fact that the collecting bank has guaranteed prior endorsements does not render it liable. Much less does a simple endorsement without guaranty do so.” 6 Tex. ,Tur., last paragraph, § 156.

But regardless of whether or not the Borg-er bank was negligent in failing to get an identification of Schulz and in sending the item as a cash item, the plaintiff First National Bank of Wichita Falls was guilty of negligence in accepting and paying a forged check purporting to be the check of one of its customers whose genuine signature was on file with them for their inspection. It was the paramount duty they owed the customer to pay only when his genuine signature was presented to them. When they violated this duty, whether or not they are charged with negligence as that term in its common acceptation is understood, they are guilty of negligence in law.

The Austin Court of Civil Appeals, in the case of Citizens’ National Bank v. San Angelo Bank, 10 S.W.(2d) 388, 389, Associated Justice Blair speaking for that court, in an able opinion and in a case almost on all fours with the case at bar, says:

.“The sole question presented is whether under these pleadings and agreed facts judgment should have been rendered for appellant as a matter of law. We think so.
“The case is settled by the following rule announced in the case of Rouvant v. San Antonio Nat. Bank, 63 Tex. 610, 612: ‘A bank, in accepting and paying a draft drawn by a customer, is generally held to know the signature, and, if a forged draft is accepted and paid, the bank, as a general rule, will not be heard to assert a mistake as to the signature. City Bank v. National Bank, 45 Tex. 218; Price v. Neal, 3 Burr. 1354; Levy v. Bank of the United States, 1 Bin. (Pa.) 27.
“This rule prevails as between banks, one of which pays out money as drawee on a forged check of its customer to another bank presenting the check for collection or to a holder in due course. 7 C. J. 695, § 423 (4); First Nat. Bank v. City Nat. Bank, 182 Mass. 130, 65 N. E. 24, 94 Am. St. Rep. 638, and note.
“Appellee admits the general rule, but seeks to bring itself within the exception thereto announced in the case of First Nat. Bank of Quitman v. Wood County (Tex. Civ. App.) 294 S. W. 324, affirmed by Commission of Appeals, 299 S. W. 856, because appellant indorsed the check ‘previous indorsements guaranteed.’ There it is held that, where a holder bank pays a forged check to the person presenting it without identifying him, and drawee bank pays the check without active fault or negligence in discovering the lack of genuineness of the signature of its customer at the time, being thrown off its guard by reason of the holder bank indorsing it ‘previous indorsements guaranteed,’ and in reliance thereon, and in reliance that holder bank exercised due care and diligence in the identification of the person to whom it paid the money' on the check, the drawee bank was entitled to recover the amount paid the holder bank on the forged check. But in this case appellee neither alleged nor proved that it paid the cheek in question because of being thrown off its guard by reason of appellant’s indorsing same ‘previous in-dorsements guaranteed,’ and in reliance thereon, nor that appellant was guilty of any negligence which induced or misled it to pay the check because of such indorsement. Nol-is any fact, reason, or excuse alleged or proved why appellee paid the check without discovering the lack of genuineness of its customer’s signature at the time. The burden was on appellee to so allege and prove in order to bring its case within the exception to the general rule that a drawee bank or other drawee of commercial paper is bound to know the signature of its customer. Otherwise more weight would be given to the exception than to the rule.
“Neither the case cited, nor does any case in so far as our research goes hold that a drawee bank can excuse itself from the duty to carefully examine and discover the forgery of its customer’s signature to a check presented for collection by another ba:qk or holder in due course, upon the mere allegation and-proof that the check bore the customary indorsement used -by banks sending checks through regular banking channels to drawee bank for collection. The fact that the check was sent for collection should indicate to a drawee bank that the sending bank was holding up payment until drawee bank had examined the check and ascertained the genuineness of the drawer’s signature. The indorsement, ‘Previous indorsement guaranteed,’ is merely the passport for the check through regular banking channels, and is so understood by the banking business. And while Texas may go farther than most jurisdictions in modification of the common-law rule that a drawee bank or other drawee of commercial paper is bound to know the signature of its customer to a check or draft, still all the cases hold that a drawee bank paying a forged check purporting to have been drawn by its customer must allege and prove that drawer or other holder who received the money had knowledge of the forgery, or was negligent, or was a party to the forgery, before it can recover back its loss on such cheek. Or, as is stated by the Oourt of Civil Appeals in the Quitman Bank Case, supra:
“ ‘As a general rule the doctrine prevails that, unless the drawer of the check whose mame lie forged is, by negligence or acquiescence, rightfully responsible, the drawee bank cannot charge the amount paid * * * against him. [Citing cases.] It is for the reason that a bank, in paying a check drawn by a depositor, is generally held to know the signature, * * * unless under the exception stated above.’ ”

This opinion of Judge Blair is supported by a copious citation and quotation of authorities.

The First National Bank of Wichita Falls, being clearly guilty of paying a forged check when it was its’ duty to pay only such checks as had appended thereto the genuine signature of its maker, was guilty of negligence in law, and was estopped from claiming compensation from the Borger bank, notwithstanding said bank might have been negligent.

This is the controlling question in this case, and other assigned errors become immaterial.

We are of the opinion that the trial court did not err in leaving the appellant bank where he found it, and therefore affirm his judgment in this cause.


author: RANDOLPH, J.

text:
    COOPER COTTON CO. v. FIRST STATE BANK OF O’DONNELL et al.
    No. 3555.
    Court of Civil Appeals of Texas. Amarillo.
    March 4, 1931.
    Rehearing Denied April 15, 1931.
    R. W. Haynie, Amo Fitzpatrick, and Cunningham & Oliver, all of Abilene, for plaintiff in error.
    Lockhart, Garrard & Brown, of Lubbock, for defendants in error.
   RANDOLPH, J.

In the motion for rehearing filed by plaintiff in error, it is earnestly insisted that, by reason of a misconception or mistake of the facts, .this court has found that it is simply a question of the right to charge the draft of R. N. Leggett, Sr., back against Cooper Cotton Company, of which R. N. Leggett, Sr., was a member. We have therefore reconsidered the record before us and will now set out the result of our investigation.

This is the second time this case has been before this court. In the year 1923, on the former appeal, in an opinion which was not published, this court reversed the judgment of the trial court and remanded the case for a new trial' for the reason that the trial court admitted evidence upon an issue which was not pleaded.

There is an interim of practically eight years between the decision on that appeal and the hearing on this appeal.

The suit was originally brought by the plaintiffs Cooper Cotton Company, a firm composed of J. A. Cooper and R. N. Leggett, Sr., against the First State Bank of O’Donnell. Pending the former appeal, the First National Bank of O’Donnell took over the assets and assumed the liabilities of the First State Bank and was made a party defendant herein. R. N. Leggett, Sr., .having died pending said appeal, J. A. Cooper continued the suit as surviving partner. On another trial judgment was again rendered against the plaintiffs, and appeal therefrom has been perfected to this court.

J. A. Cooper and R. N. Leggett, Sr., formed the partnership of Cooper Cotton Company for the purpose of huying and selling cotton in the territory around O’Donnell, Tahoka, and Damesa. Cooper furnished the capital of the tirm in the sum of $2,500, and Deggett, Sr., operated the business of buying and selling cotton for that firm. Deggett, Sr., opened an account in the name of the Cooper Cotton Company with the First State Bank of O’Donnell by depositing the funds of the Cooper Cotton Company therein. At the time the Cooper Cotton Company began operations in the territory named, R.' N. Deggett, Jr., son of the partner of J. A. Cooper, was operating in that territory, also buying and selling cotton, independent of the Cooper Cotton Company.

It is agreed by the parties that, at the time the check drawn by the Cooper Cotton Company for $1,400, upon which the suit is based, was turned down by the bank, the Cooper Cotton Company would have had on deposit in said bank the sum of $1,438.41 if no part of the loss incurred by R. N. Deggett, Jr., had been charged to the account of that company.

In reply to plaintiffs’ petition, the defendant, First State Bank, by way of special defense, alleged that about the 1st of December, 1920, R. N. Deggett, Sr., made a deposit with it, representing that he was in the business of buying and selling cotton, and that in such business he used the trade-name of Cooper Cotton Company and made such deposit in that name; that said Deggett, Sr., held himself out to other banks and to the public generally that he was using and doing business under the trade-name of Cooper Cotton Company ; that the actions, statements, and representations of Deggett, Sr., led it to believe and it did believe that said Deggett, Sr., was doing business for himself, and that he was only using the name of Cooper Cotton Company as a trade-name, and that the funds so deposited with it were the personal funds of said Deggett, Sr. Said defendant further alleges that Deggett, Sr., drew checks on the account to pay his personal expenses and for many other purposes than in buying and selling cotton; that he did not always use the trade-name in buying and selling cotton, but often used his individual name in purchasing same, and such purchases were paid for out of the account of Cooper Cotton Company, and the proceeds of such sales were deposited in the name of Cooper Cotton Company; that all of these facts led the defendant, its agents and employees, to believe, and they did believe and understood, that said Deggett, Sr., was the sole owner of the funds deposited in the name of Cooper Cotton Company.

It is further alleged by defendant that, when Deggett, Sr., opened up said account he also represented to the defendant that his son, R. N. Deggett, Jr., would be in the vicinity of O’Donnell and Damesa and would buy cotton in said places, and that he (said Deg-gett, Sr.) would stand behind any contract of purchase and sale made by his son, and that, after said statements and representations, said Deggett, Sr., did have business transactions with said Deggett, Jr., and did on one or more occasions pay the cheeks or drafts or overdrafts of Deggett, Jr. Defendant further alleged that thereafter there was pre-, sented to it a draft drawn by R. N. Deggett, Jr., for the sum of $5,022.13, which was attached to a bill of lading calling for fifty bales of cotton, which cotton had been consigned to R. N. Deggett, Sr., at Abilene, Tex.; that, at the time of the receipt of such draft, Deg-gett, Jr., had no money on deposit with defendant, but, on account of the various transactions that had taken place between said Deggett, Sr., and Deggett, Jr., defendant was led to believe and did believe that said Deg-gett, Sr., doing business under the trade-name of Cooper Cotton Company, had some interest in said fifty bales of cotton; that the defendant’s agents and representatives advised said Deggett, Sr., that Deggett, Jr., did not have any funds on hand in defendant bank with which to pay the draft, and that, unless some arrangement was made, said draft would be returned, and thereupon said Deggett, Sr., requested the defendant to pay said draft and to take up said bill of lading; that, by reason of such request, defendant did pay such draft and held said bill of lading; that said Deggett, Sr., at the time promised and agreed with defendant that he would protect it from any loss accruing by reason of paying the draft; that at the time such agreement was made with said Deggett, Sr., it had no notice, actual or constructive, that J. A. Cooper or any other person other than said Deggett, Sr., and Deggett, Jr., was interested in the trade-name of Cooper Cotton Company, or was interested in the business being carried on by Deggett, Sr., under the trade-name of Cooper Cotton Company.

Further defendant alleged that Deggett, Sr., had on deposit with it under the trade-name of Cooper Cotton Company a sum of money sufficient to indemnify it against any loss that might be sustained on said fifty bales of cotton, and therefore paid out the money on said draft and received said cotton for the use and benefit of Deggett, Sr., and Deg-gett, Jr.

Defendant also alleges that Deggett, Jr., and Deggett, Sr., were interested in and joint owners of said fifty bales of cotton; that said fifty bales of cotton were originally purchased from Edwards Bros, at Tahoka, Tex., by the said Deggett, Sr., and that said cotton was originally shipped to Dane & Allen at Abilene; that, after said cotton had been received at Abilene and after the draft had been drawn by Deggett, Sr., in favor of Dane & Dane and after payment of such draft had been refused by Dane & Dane, and in order that said trade with Edwards Bros, might go through and at the instance and request of Leggett, Sr., and for his own use and benefit, the said Leggett, Jr., drew said draft for $5,022.13 on the defendant bank as a means and for the purpose of paying and satisfying drafts which had theretofore been drawn by Leggett, Sr., on Lane & Lane aforesaid, and that, while said draft was in the name of Leggett, Jr., it was, in fact, in payment for cotton which had been purchased by Leggett, Sr., and was for the use and benefit of Le'g-gett, Sr., and that, by reason thereof, Leg-gett, Sr., was the sole owner or at least a joint owner of same with Leggett, Jr.; that said cotton was later sold at the instance and request of said Leggett, Sr., and Leggett, Jr., and a loss was sustained to the amount of approximately $1,800, and that, at the time the loss was sustained, Leggett, Sr., had on deposit with defendant in the trade-name of Cooper Cotton Company, approximately $1,-400, and, after said loss was ascertained, defendant charged the account of Leggett, Sr., doing business under the trade-name of Cooper Cotton Company, with the sum of $1,400.44, and, at the time plaintiff presented the check for payment as alleged in their petition, they did not have any money on deposit with defendant, and defendant was under no legal obligations to pay said check; that, if there ever existed a partnership between Cooper and Leggett, Sr., it had no notice, actual or constructive, of the existence of such partnership, but, if same did, in fact, exist, that said Cooper turned over to said Leggett, Sr., the sum of $2,500 for the purpose of buying and selling cotton and permitted said Leggett, Sr., to handle said funds and money in any way that he saw proper, and permitted said Leg-gett, Sr., to hold himself out as the sole owner of said funds, and permitted him to draw checks on said fund.for any purpose that he might desire, and that said Cooper should be and is now estopped to deny that said Leg-gett, Sr., had the right and authority to handle said fund in any way or manner he desired.

The court submitted the case to the jury upon special issues, and the jury found, in answer thereto, as follows: (a) That Cooper Cotton Company owned an interest in the fifty bales of cotton covered by the draft given in favor of Lane & Allen and drawn on the First State Bank of O’Donnell; (b) that the cashier of the First State Bank of O’Donnell, on December 3, 1920, the date he paid the draft in controversy, had not been informed and had no knowledge from any source that Leggett, Sr., was not the sole owner of the deposit made in said bank in the name of Cooper Cotton Company; (c) that the cashier of the defendant bank, at the time he paid the draft, believed from the words, acts, and conduct of R. N. Leggett, Sr., in his business dealings with said First State Bank of O’Donnell and said B. P. Weathers, its cashier, that the funds deposited in said bank in the name of Cooper Cotton Company were the individual property of R. N. Leggett, Sr.; (d) that R. N. Leggett, Sr., before and at the time the draft in controversy was paid by the cashier of the defendant bank, requested the cashier to pay the same and stated to Mm that, if he would do so, he (the said Leggett, Sr.), would stand behind the draft; (e) that R. P. Weathers, as cashier of the First State Bank of O’Donnell, paid the draft in controversy on December 3, 1920, solely by reason of the said R. N. Leggett, Sr., requesting him to do so and stating that if he would do so that he would stand behind the draft.

The evidence, though conflicting, supports the verdict of the jury in their findings that the defendant bank paid the draft on the promise of Leggett, Sr., that' he would stand behind it if they would pay it. It is also clear from the evidence that the defendant bank had no notice, actual or constructive, of the partnership between Cooper and Leggett, Sr., and that the bank believed that the deposit in the name of Cooper Cotton Company was the individual property of Leggett, Sr., and had no notice whatever that any other person was concerned in the business of that company, except Leggett, Sr., unless the name “Cooper Cotton Company,” in which the deposit was carried, gave it notice as a matter of law that Leggett, Sr., was not the sole owner, but that others were interested in the account.

The assumed name statute, Article 5924, R. C. S. 1925, provides as follows: “No person shall conduct or transact business in this State under any assumed name or under any designation, name, style, corporate or otherwise other than the real name of each individual conducting or transacting such business, unless such person shall file in the office of the c.ounty clerk of the counties in which such person conducts, or transacts or intends to conduct or transact such business, a certificate setting forth the name under which such business is, or is to be, conducted or transacted, and the true full name or names of each person conducting or transacting the same, with the-post-office address of each. Said certificate shall be executed and duly acknowledged by the persons so conducting or intending to conduct said business in the manner provided for acknowledgment of conveyance of real estate.”

The purpose of this statute is that the public may know who are the parties operating a business under an assumed name. This statute has been held not to invalidate a contract made by parties, one of whom is operating under an assumed name. As stated, the purpose of the statute was simply to make known the parties operating under the assumed name. We are of the opinion that it was the duty of Cooper and Leggett, Sr., to make the publication requested by this arti-ele, and, where they did not do so and injury occurred to another party, or his interests were prejudiced by the failure to do so, no presumption can arise charging the said party with notice that other parties are interested in the business. Where it was in the power’of Cooper.to give the public notice of his interest in the business operated under an assumed name, and he failed to give such published notice, he cannot be permitted to use his default in order to invoke notice by presumption that he was a partner by reason of his operating under an assumed name, which in itself would have been suggested. Shults v. Krauskopf (Tex. Civ. App.) 286 S. W. 544. Especially is this true when the evidence shows that Cooper had placed it within the power of Leggett, Sr., to so operate the business and by his conduct and representations mislead parties with whom he was to transact business.

We therefore hold that the fact that the business transacted by Leggett, Sr., was in the name of Cooper Cotton Company was not notice to the defendant that L A. Cooper was a partner interested with Leggett, Sr., in the business.

R. P. Weathers, cashier of the defendant bank, testified: “R. N. Leggett,'Jr., possibly did notify us that he had sold all the cotton to Hart Bros. He told us to go to his father and have his father sign his name to the draft on Hart Bros, and his father did sign R. N. Leggett, Jr., to the draft. He did not endorse it in his own name. He did not guarantee it in any writing on the draft or otherwise. No, not in writing. The Hart Bros, draft came back also. * * * I do not know if R. N. Leggett, Jr., had bought these fifty bales of cotton from different persons. As to whether he bought cotton in the market generally and gave cotton acceptances for it — well, I think this fifty bales was bought from Edwards Bros, at Tahoka, but I do not know that. He drew this draft on Lane & Allen thinking he had sold the cotton to them. I believe he sold the cotton to Hart Bros. This draft here is given to Lane & Allen. It came to our bank and the draft that was drawn back for the fifty bales was on Hart Bros, at Abilene. I do not know that R. N. Leggett, Jr., was here when the cotton was sold to Lane & Allen. He was in Abilene when he drew this draft. I do not know how he paid Edwards Bros', for the cotton. I do not know if he paid for it or not. As to whether, if he bought this cotton from the market generally from farmers or other meij holding cotton here, did he give acceptances on my bank — when he bought cotton down there he did. If he bought it in Lamesa, O’Donnell or Tahoka, I do not know how he handled it. I think he was in Abilene when that draft was drawn. I suppose he took it from Lane & Allen by giving them a draft for the bill of lading. That is a draft if unpaid, and sent Lane & Allen the money. Then there was a resale of this cotton to Hart Bros., and I took that draft to Hart Bros, in payment of what R. N. Leggett, Jr., owed us. It was after that the cotton was sold and applied. That transaction required quite a bit of negotiations by telephone between me and R. N. Leggett, Jr.”

While the plaintiff contends that there were two different transactions, and that one of them was for the benefit of Cooper Cotton Company and the other was for Leggett, Jr., and totally disassociated with any transaction of Cooper Cotton Company, the evidence being conflicting, we cannot ignore or set aside the verdict. The judgment of the trial court is affirmed.

The original opinion herein is withdrawn, and the motion for rehearing is overruled.


author: JACKSON, J.

text:
    BARBER v. FIRST STATE BANK OF HEREFORD.
    No. 3514.
    Court of Civil Appeals of Texas. Amarillo.
    Feb. 25, 1931.
    Rehearing Denied March 18, 1931.

      Fred E. Young, of Amarillo, and Carl Gil-liland, of Hereford, for plaintiff in error.
    W. H. Russell, of Hereford, for defendant in error.
   JACKSON, J.

This suit was instituted in the county court of Deaf Smith county, Tex., by the plaintiff, E. M. Barber, to recover of and from the defendant, the First State Bank of Hereford, with 6 per cent, interest thereon, the sum of $500 deposited by plaintiff in escrow in the First State Bank & Trust Company of Hereford, Tex.

The plaintiff alleged that on December 18, 1926, he entered into a written contract with the Union National Bank of Fremont, Neb., by the terms of which he agreed to buy, and said Union National Bank agreed to sell, certain real estate in Deaf Smith county, Tex., which is sufficiently described in the petition. That said contract stipulated that plaintiff should pay the consideration of $2,400 for said land as follows: $500 cash placed in escrow with a copy of the contract in the First State Bank & Trust Company of Hereford, Tex., the same to be paid to said Union National Bank upon the completion of the contract ; the balance of $1,900 cash to be paid on the approval of title and the delivery of deed.

The plaintiff attaches to and makes a part of his petition a copy of said contract-and alleges the effect of the provisions thereof.

He pleads that in compliance with his contract he deposited it with $500 cash in the First State Bank & Trust Company as escrow agent to be paid to said Union National Bank on the completion of the contract That said First State Bank & Trust Company accepted said deposit, kept it segregated from its other funds, and expressly and impliedly agreed to hold the money until said contract was completed. That the contract was never completed, that it was breached by said Union National Bank, and about February 10, 1927, said First State Bank & Trust Company misappropriated and wrongfully converted said escrow deposited without the authority or consent of the plaintiff and contrary to its duties wrongfully and fraudulently paid said $500 to C. R. Smith.

The plaintiff then alleges that the First State Bank & Trust Company, about October 20, 1927, duly and legally sold, assigned, and delivered all of its assets to the defendant herein, and as a consideration therefor the defendant legally contracted and agreed to assume and pay all liabilities of the First State Bank & Trust Company, and the defendant thereby became bound to discharge and satisfy all lawful debts, claims, and liabilities known or unknown to all creditors of said First State Bank & Trust Company.

The defendant answered by general demurrer, and by way of special defense alleged that the plaintiff is estopped to recover sai4 deposit, because an abstract of the property was delivered to the plaintiff on January 3, 1927, was examined by the attorney of plaintiff, who, by letter, approved the abstract of title, suggested how the deed should be drawn, upon the authority of which the $500 escrow deposit was paid under the terms of the contract. That said contract was completed in so far as the defendant was concerned when such abstract was delivered and approved and a warranty deed delivered to the escrow holder, and in no event was the plaintiff damaged by the payment of the money to C. R. Smith, the agent of the Union National Bank of Fremont, Neb.

In the alternative the defendant alleges that regardless of having paid said $500 escrow deposit to C. R. Smith, if it is an escrow holder, it has in its possession the sum of $500 to be paid to the owner thereof and here tenders said sum to be .paid to the proper party, but asserts that before plaintiff is entitled to recover the escrow money it is necessary for him to make the Union National Bank a party to the suit.

The written contract, dated December 18, 1926, between the plaintiff and the Union National Bank for the purchase and sale of the quarter section of land, stipulates, in effect, that the plaintiff should pay $2,400 for the land, $506 cash placed in escrow with a copy of the contract in the First State Bank & Trust Company to be paid to the Union National Bank on the completion of the contract and the balance upon the approval of title and the conveyance of the land to the plaintiff, free and clear of all incumbrances, by a warranty deed. That an abstract shouid be furnished, showing good and merchantable title, such abstract to be examined by plaintiff’s attorney, and if no objections were found to the title, the contract should be consummated at once; if objections were found, a reasonable time should be allowed to correct such objections; but if any defects were found which could not be cured, the $500 should be returned to plaintiff and the contract canceled.

There is no provision in the contract providing that if plaintiff breached his contract the $500 was to be forfeited to the grantor or paid as liquidated damages for the breach, and no provision authorizing the bank to determine when or whether the contract had been complied with.

Under the agreed facts, the record shows that the plaintiff delivered to the First State Bank & Trust Company a copy of the contract with the $500 in cash to be paid according to the terms of the contract. That the bank accepted the deposit subject to the stipulations of the contract. That on February 10, 1927, the First State Bank & Trust Company, “without the knowledge or authority on the part of the plaintiff,” delivered said $500 to C. R. Smith. That on February 12th thereafter, the Union National Bank delivered to said First State Bank & Trust Company a warranty deed conveying the land to plaintiff. That the deed was offered to the plaintiff but was never accepted by him. That when plaintiff learned that the deposit had been paid out, he made demand therefor, but the bank and .trust company refused to pay him said sum or any part thereof. That after the plaintiff refused to accept the deed and demanded the payment to him of said $500, but before he filed this suit, the Union National Bank sold and conveyed said land to other parties. That on February 4, 1927, the attorney employed by the plaintiff to examine the abstract for him .wrote an opinion thereon, in which, among other things, he stated, in substance, that he had completed the examination of title but there was certain information he desired. He then states wh-at he deems to be discrepancies in the description of the land in certain of the instruments abstracted and assumes that all the descriptions mean the same and suggests that a deed be drawn covering all the different descriptions, and if there is a certain subdivision of record, it should be shown in the abstract. He concludes by saying that he has not corresponded with the plaintiff and does not know just what the contract is, but asks that he be advised with reference to the suggestions as to the descriptions referred to in his opinion. That on February 10th this letter was exhibited to the First-State Bank & Trust Company, and upon it, as authority, the $500 was paid to C. R. Smith. There is nothing in this opinion that would authorize the bank to pay the money to Smith as the agent of the Union National Bank.

That the defendant purchased the assets of • the First State Bank & Trust Company and assumed the payment of its obligations and debts.

On these facts, a jury having .been waived, the court rendered judgment that the plaintiff take nothing by his suit and that the defendant go hence without day with its costs, from which judgment this appeal is prosecuted.

The appellant presents as error the action of the trial court in rendering judgment against him, because, under the record, he was entitled as a matter of law to recover the $500 escrow deposit, with interest thereon.

The First State Bank & Trust Company, appellee’s assignor, indisputably became the depository for the $500 escrow money deposited with the contract by plaintiff and voluntarily assumed the duty and obligation of retaining and disposing of said sum in compliance with the stipulations of the contract. It thereby became “the trustee of an express trust with duties to perform for each of the parties and which neither can forbid without the consent of the other.” 10 R. C. L. 633, § 15. It was bound by the term-s of the agreement and liable for the improper disposition of said $500. 10 R. C. L. 634, § 16; Citizens’ National Bank v. Davisson, 229 U. S. 212, 33 S. Ct. 625, 57 L. Ed. 1153; Simpson v. Green (Tex. Com. App.) 231 8. W. 375; Guaranty State Bank v. Higbee (Tex. Civ. App.) 254 S. W. 225; City National Bank of Dallas et al. v. Grimm (Tex. Civ. App.) 262 S. W. 197; Texas National Bank v. Eastland-Desdemona Consol. Oil Co. (Tex. Civ. App.) 287 S. W. 149.

The appellee, having purchased the assets of the First State Bank & Trust Company and assumed the payment of its debts and obligations, occupies the position of and is the holder of the escrow deposit and bound by the duties and obligations of its assignor. First State Bank & Trust Co. et al. v. First Bank of Truscott (Tex. Civ. App.) 32 S.W.(2d) 494.

The appellee contends that the judgment of the trial court is correct even if the record shows that its assignor breached the trust by paying out the escrow money before the contract of purchase and sale was completed, for the reason that no damage is shown to have been occasioned appellant by such wrongful act, relying on the principle announced in 21 C. J. 884.

Appellee’s answer contained no general denial, but, among other things, it pleaded that although it had paid out the escrow deposit to the Union National Bank, that if it is an escrow holder, it has in its possession the sum of $500 to be paid to the owner thereof and tenders said sum to be paid to the proper party.

The appellee never owned said $500 and does, not assert any right, title, ocr interest therein. The Union National Bank had abandoned its right to .enforce specific performance against appellant, because it had sold and conveyed the real estate to other parties after he declined to accept the deed.

It had no claim on this specific escrow deposit even should we concede that the appellant breached his agreement to buy the land, because the contract does not provide that said Union National Bank is to receive said $500 as a forfeiture or as liquidated damages if the appellant failed and refused bo perform the obligations imposed on him in said contract. The only remedy of the Union National Bank against the appellant, if any, would be a suit for damages for breach of contract, and the escrow deposit not having been in any way impounded by said Union National Bank, it had acquired no right to this specific fund, either in the hands of appellee or.appellant.

We are therefore of the opinion that the court committed error in refusing to allow appellant to recover the $500 which appellee admitted it held and which it tendered to the party entitled thereto.

The judgment is reversed, and here rendered that appellant recover from the appellee the sum of $500, with interest at the rate of 6 per cent, per annum ¿rom the date of the judgment in this court.


text:
    SECURITY UNION INS. CO. v. HALL.
    No. 3575.
    Court of Civil Appeals of Texas. Amarillo.
    March 25, 1931.
    T. R. Boone and J. Walter Friberg, both of Wichita Falls, for appellant.
    E. W. Napier, of Wichita Falls, for appel-lee.
   JACKSON, J.

This suit was instituted in the district court of Wichita county, Tex., by the appel-lee, J. H. Hall, against the appellant, Security Union Insurance Company, to set aside a decision of the Industrial Accident Board and to recover for injuries alleged to have been sustained by him in the.employ of the Continental Oil Company, which carried compensation for its employees with appellant.

The appellee alleged that on November 11, 1926, he was in the employ of the Continental Oil Company, a corporation, and had been for more than twelve months next preceding said date at an average weekly wage of $31.-25. That on said date, in the course of his employment, in trying to lift an oil drum from the ground and place it on the loading dock of his employer, in the city of Wichita Falls, his left arm and elbow were broken, strained, wrenched, and otherwise injured, so as to greatly interfere with the movement and use thereof, which condition was permanent.

That within thirty days after the accident and injury he notified his employer and the Industrial Accident Board thereof, and on or about November 17, 1929, filed his claim, with said board for compensation in an amount exceeding $1,000. That on February 18th thereafter, the board made and entered its final decision on his claim for compensation. That he gave to the board, as required by law, notice that he was unwilling to and would not abide by the decision of the board, and on March 6th thereafter filed this suit to set aside such decision and to recover compensation under the compensation law. That he was compelled to employ an attorney and contracted to pay him the usual and customary fee for his services.

1-Ie alleged that within ninety days after the accident he caused to be prepared, in compliance with the Workmen’s Compensation Act, a claim for compensation on account of his injuries and mailed such claim to the Industrial Accident Board. That thereafter his claim was set for hearing by the board, a hearing had thereon, and his claim treated by the board as a filed claim. That he was informed by the agents of the appellant that such claim had been filed. > All of which caused him to believe his claim had been filed and constitute good cause for his delay and for failing to file his claim for compensation with the board within the time prescribed by statute.

The appellee alleged, and it was admitted, that the appellant carried the policy of insurance on the employees of the Continental Oil Company at the time of the accident resulting in appellee’s injuries.

The appellant answered by pleas in abatement and pleaded in bar general demurrer, general denial, aijd alleged that on or about June 6, 1929, the .appellant and appellee entered into a compromise agreement and settlement, subject to the approval of the Industrial Accident Board of the state. That on or about the 19th of July thereafter the Board made and entered its final decision, ratifying said agreement, which was accepted by appellant and became a valid and binding agreement, has not been set aside, and is res judicata and a full and final release to all claims of appellee for the injuries for which he'seeks compensation in this suit.

The appellant further alleges that prior to July 19, 1929, the appellee filed and submitted to the Industrial Accident Board a claim for compensation based .on the same claim on which he now seeks to recover, which was by the board on July 19,1929, duly considered and an award duly made therein, from which the appellee prosecuted his appeal to the district court of Wichita county, Tex., by filing suit in said court to set aside the final ruling of said board; that said case was not prosecuted, but was dismissed, and the award of said board became final and binding and is urged as a full and final settlement of the entire claim of the appellee.

That the alleged condition of appellee is not due to the injuries he alleges he received, but was brought about by physical injuries suffered prior and subsequent to the date of November 11, 1926, for which the appellant is in no way liable.

By supplemental petition and trial amendment, the appellee, after demurring and excepting to appellant’s answer, pleaded general denial, admitted that he signed an instrument purporting to be a compromise agreement and that on July 19, 1929, the Industrial Accident Board entered its order purporting to approve said agreement by which he was to receive $25, but that said sum was never paid or tendered to him until after this suit was instituted. That he had sustained an injury in the course of his employment for which the appellant was liable, and that appellant, through its agent, knowing the condition and extent of appellee’s injury and the cause thereof, and for the purposes of defrauding appellee, represented to him that he had filed no claim with the Industrial Accident Board within six months, as the law required, but that the company would take care of him and induced the appellee, by his words and conduct, to believe that the appellant would take care of him and that if he would aid it in adjusting the claim without substantial expense to his employer, that he would be retained in the employ of the Continental Oil Company indefinitely. That all of said representations were made to appellee by J. D. Bright, the agent of appellant, immediately before the compromise agreement and thereafter ratified by appellant; that they, were false and known to be false and made solely for the purpose of inducing appellee to enter into such compromise agreement and thereby deprive him of. compensation. That he believed and relied on such representations; that sucli agreement was filed with the board and thereafter the board undertook to approve such agreement.

That as a matter of fact appellee had not at that time filed a claim with the Industrial Accident Board and the board was without jurisdiction to approve the alleged compromise agreement. That immediately after the attémpted approval of such compromise agreement, the appellee employed an attorney, and suit was filed on his claim but was subsequently dismissed because it was learned that no claim had been actually filed with the board. That thereafter a claim was filed and acted upon by the board, and this suit is predicated thereon.

By supplemental answer the appellant urged general demurrer, special exception, and general denial.

In response to special issues submitted by the court in his main charge, the jury found, in effect, that the appellee sustained an injury to his left arm or elbow on November 11, 1926, while attempting to lift an oil drum up on the platform of the Continental Oil Company; that the disability to his arm or elbow by reason of such injuries is 75 per cent., and is permanent; that good cause has been shown for the failure of appellee to file his claim in the time prescribed by statute. Without setting out the findings of the jury on the questions of fraud alleged for setting aside the compromise agreement, it is sufficient to say that such findings are, in substance, that appellee was induced by the fraudulent representations of the agent of appellant to enter into the compromise agreement. In response to special issues given at the request of appellant, .the jury found, in effect, that the condition of appellee’s left arm or elbow was not caused by rheumatic trouble; that appellee realizecl that his elbow in his left arm was becoming incapacitated on November 22, 1926; and that he has continually suffered with his arm since said date.

On these findings judgment was entered setting aside the compromise agreement; the decision of the Accident Board made on the 18th of February, 1930, and that the appel-lee recover of appellant compensation at the rate of $S.66 per week from November 18, 1926, for two hundred consecutive weeks, with interest from the maturity of each weekly payment. That appellant was due appellee $1,725, which constituted past-due compensation for 181 weeks. From this judgment -this appeal is prosecuted.

The appellant urges as error the action of the court in failing to require a finding by the jury as to whether appellee received his injury while in the course of his employment, because without such finding the court was not authorized to render judgment against it.

In response to special issue No. 1, the jury found that appellee sustained an injury to his arm or elbow on the 11th day of November,. 1926. In response to issue No. 2, they found that he sustained such injury-while attempting to lift an oil drum onto the Continental Oil Company’s warehouse platform.

The testimony is uncontroverted that ap-pellee was employed by the Continental Oil Company. That he was working for said company on the 11th day of November, 1926. That on that day he was assisting in unloading from a car a carload of drums for his employer and placing them on the wharf of the company. That the work he was so engaged in was a part of his regular duties, and while engaged in this work, he received the injury complained of. The evidence showing without dispute that he sustained the injury for which he seeks compensation while in the course of his employment, the court did not commit error in refusing to submit such issue to the jury.

“Where there is no conflict in the testimony, and no room to doubt or hesitate as to a matter of fact in issue, the Judge, in his charge, ought not to assume that it is or may be doubtful. Such a course is calculated either to confound the jury, by causing them to doubt the justice of their own clear convictions; or to mislead by inducing -them to suppose they may find the fact either way, when the evidence warrants but one conclusion, and to find con-trawise would be to find manifestly against the evidence. The rule, which forbids the Judge to charge upon the weight of evidence, does not require or authorize him to assume as doubtful, that which is clear and indisputable ; or to assume hypotheses at variance with the certain .fact. Where the evidence to a fact is positive and not disputed or questioned, it is to be taken as an established fact; and the charge of the Court should proceed upon that basis.” Wintz v. Morrison, 17 Tex. 372, 387, 67 Am. Dec. 658; Denham v. Trinity County Lbr. Co., 73 Tex. 78, 11 S. W. 151. See, also, Lamar v. P. & S. F. Ry. Co. (Tex. Com. App.) 248 S. W. 34.

In Hebert et al. v. New Amsterdam Casualty Co., 3 S.W.(2d) 425, the Commission of Appeals held that a requested issue, submitting to the jury whether an employee received the injuries which resulted'in his death while in the scope of his employment, was properly refused because the evidence on such issue is undisputed.

The appellant presents as error the action of the court in .rendering judgment for appellee for $8.66 per week, because there was no issue submitted to and no finding of the jury on the average daily wage received by ap-pellee, and he was therefore not entitled .to a judgment in any event for more than 75 per cent, of $7 per week under the findings of the jury.

In the argument tinder this proposition, the contention is made that appellee was an interested -party and his testimony was the only evidence offered on the average weekly wage received by him, and the court committed error in failing to submit such issue to the jury, notwithstanding appellee’s evidence was unco-n-troverted.

Appellee’s evidence was positive, certain, and unequivocal. It is uncontroverted by any evidence or circumstance in the record. He was not even cross-examined on the question of his wages. He testified that he had been working for his employer for about two years immediately preceding the injury at $125 per month.

“It is not proper to submit uncontradicted testimony to a jury for the.sole purpose of giving the jury an opportunity to nullify it by discrediting the witness, when nothing more than mere interest in the case exists upon which to discredit such witness. The testimony must inherently contain some element of confusion or contrariety, or must be attended by some circumstance which would render a total disregard of it by a jury reasonable rather than capricious, before a peremptory instruction upon the evidence can be said to constitute an invasion of the right of trial by jury. That it is proper for a trial court to instruct a verdict upon the uneont-radicted testimony of interested -parties, when it is positive and unequivocal and there is no circumstance disclosed tending to discredit or impeach such testimony, can be said to be a settled rule in Texas.” M. H. Thomas & Co. v. Hawthorne (Tex. Civ. App.) 245 S. W. 966, 972, writ refused. See, also, Still v. Stevens (Tex. Civ. App.) 13 S.W.(2d) 956; Sigmond Rothschild Co. v. Moore (Tex. Civ. App.) 22 S.W.(2d) 533.

The record discloses that on November 24, 1926, H. L. Roach, the warehouse foreman of the Continental Oil -Company, made out a report of the accident and injury, which was forwarded to the Industrial Accident Board at Austin and received by it November 27,-1926, and the -statement is contained therein that ap-pellee was receiving $125 per month. This report was offered in evidence without objection or limitation and constitutes sufficient corroboration, if any is necessa-ry, of appellee’s testimony as to his average weekly wage. Texas Employers’ Ins. Ass’n v. Mummey et al. (Tex. Civ. App.) 200 S. W. 251, writ refused.

3?he appellant assails as error the court’s charge given in connection with the issue whether appellee had shown good cause for his failure to file his claim with the Industrial Accident Board in time “for the reason that said charge is an abstract charge and does not seek to define what is good cause, but gave the jury a particular instruction as to the law of the case and conveyed to the jury the result of their answer to the special issue which followed.”

The part of the charge complained of is: “You are instructed -that under the law a person claiming compensation is required to give notice of the injury to the Industrial Accident Board within thirty days and to file a claim for compensation with the Industrial Accident Board within six months after the time of the injury, provided, however, that a strict compliance with this requirement may be waived for ‘good cause.’ ”

Immediately following this charge is issue No. 9, which reads: “Now, -bearing in mind the foregoing instruction, do you find from a preponderance of the evidence before you that good cause -has been shown for the failure of the plaintiff to file his claim in time, if he did so fai-1 ?”

In connection with this issue, the court gave the following definition of “good cause”: “You are instructed in connection with special issue No. Nine of the Court’s main charge that by the term ‘good cause’ is meant: such a state of facts as would be considered by men of ordinary prudence as a reasonable excuse for the plaintiff’s failure to file his claim within the six months period.”

The part of the charge complained of is substantially in the -language of the statute. The question following this charge and given in connection therewith is concrete and presents a material issue in this case. When construed with the issue, which is necessary, the charge is not subject to-the objection -made, but, if erroneous, in the light of the testimony in this case it does not constitute reversible error. T. & P. Ry. Co. v. Wright, 62 Tex. 515; Goldstein et al. v. Cook (Tex. Civ. App.) 22 S. W. 762.

It will be noted also that the objection that the part of the charge complained of “does not seek to define, what is good cause” is not tenable, because the court does -give a definition of good cause and the proposition presents no Objection to the definition as given.

The appellee was required to use in the -prosecution of his claim that degree of diligence which a man of ordinary prudence, situated as he was, would have used under the same or similar circumstances. Consolidated Underwriters v. Seale et al. (Tex. Civ. App.) 237 S. W. 642, 643. And in the absence of a specific objection to the definition of good cause as given by the court, it, in our opinion, is in sufficient conformity with the principle above announced. If the charge suggested to the jury the result of their finding on this issue, it was not reversible error, for as men of ordinary intelligence they already knew the legal effect thereof. McFaddin v. Hebert, 118 Tex. 314, 15 S.W.(2d) 213.

The appellant by assignment attacks as erroneous the action of the court in submitting to the jury the issue as to whether appellee sustained an injury “to his left arm or elbow,” because such issue is duplicitous and the finding of the jury did not designate what ‘part of the arm was injured.

The appellee alleges that the injury sustained was to his left elbow, arm, and forearm. Special issue No. 1 requested by appellant and given by the court submits whether or not the condition of “the plaintiff’s left arm or elbow” was due to rheumatic trouble. The uncon-troverted testimony is that the injury was to the elbow of the left arm of appellee. Appel-lee’s suit was for permanent partial incapacity to his arm, and he was entitled to draw the same compensation as he would have received for the loss of the arm. Article 8306, § 12, R. C. S. 1925; Lumbermen’s Reciprocal Association v. Pollard (Tex. Com. App.) 10 S.W(2d) 982. This assignment is overruled.

The appellant challenges by assignment tlie sufficiency of the testimony to support the finding of the jury that good cause had been shown for the failure of the plaintiff to file his claim within six months after the injury. The record discloses that appellee was injured on November 11, 1926; that a report of the accident and injury was ¡made out on November 22, 1926, by H. L. Roach, the warehouse foreman of appellee’s employer, forwarded to the Industrial Accident Board, and received by it on November 27,1926. This report contains in detail all the notice required by the Industrial Accident Board of an injured' employee and his employer. That copies of such report were promptly mailed to the appellant in this case. That he was paid compensation for thirteen days. That the appellant and appellee attempted to make a compromise settlement under the law, subject to the approval of the Industrial Accident Board; that this purported compromise agreement was received by the Industrial Accident Board on June 15, 1929; that notices of the setting of the hearing on the compromise agreement were issued -for July 13,1929 ; that a hearing on the compromise agreement was had before the board on the 19th of July, 1929, and said compromise agreement approved by said Board.

The appellee testified that he made out a claim in December, 1926; that the claim blanks were received from Austin, filled out, and returned to Austin. That he believed they had been received and filed in December following the injury. That after the compromise agreement was acted on by the Industrial Accident Board he employed a lawyer, and suit was brought to set aside the action of the 'board, and thereafter it was learned that no claim had ever been filed with the board by him or for him; that the suit was dismissed, claim filed, acted on by the board, and this suit predicated thereon.

Appellee had 'a meritorious case. He had prepared and filed with the Industrial Accident Board proper notice of his injury within thirty days and gave notice thereof to Appellant. He had prepared and forwarded to the Industrial Accident Board at Austin his claim within six months. He and appellant carried on negotiations which resulted in a purported compromise agreement, and presented it to the Industrial Accident Board. The board ordered a hearing thereon, held the hearing, and made a ruling on said attempted compromise agreement and treated appellee’s case as if his claim had been filed and was pending, although never received and filed.

In view of these facts, we do not feel authorized in holding that as a matter of law ap-pellee failed to show good cause why his claim, which he forwarded to Austin, was not received and filed within the six months.

The judgment is affirmed.


author: LESLIE, J.

text:
    ABILENE STATE BANK v. UNITED STATES FIDELITY & GUARANTY CO.
    No. 818.
    Court of Civil Appeals of Texas. Eastland.
    April 3, 1931.

      Wagstaff, Harwell, Wagstaff & Douthit, of Abilene, for appellant.
    Kirby, King & Overshiner, of Abilene, for appellee.
   LESLIE, J.

The plaintiff, United States Fidelity & Guaranty Company, sued the defendant, Abilene State Bank, in the justice court of Taylor county, Tex., to recover damages in the sum of $178.51 alleged to have been paid by said bank from the funds of Doyal Garrison, contrary to an agreement between the plaintiff, one S. R. Stanage, a purported guardian of the person and estate of Garrison, and the bank. An appeal was had to the county-court, and there the trial .was before the court without, a jury and judgment rendered in favor of the plaintiff. The defendant appeals. The- record ’ contains an agreed statement of facts, as well as findings of fact and conclusions of law. In the county court the plaintiff filed written pleadings, but there is no showing that they were exclusively so. The defendant answered by general demurrer, general denial, specially pleaded failure of consideration, and further that the plaintiff, without being compelled to do so, voluntarily paid its money to one who had no legal authority to demand it.

By four propositions of law the appellant challenges the correctness of the judgment of the trial court. In each proposition much empliasis is laid on the fact that the guardianship proceedings hereafter to be noticed were null and void. The facts out of which -the litigation arose are substantially these:

On July 15, 1927, S. R. Stanage was appointed guardian of the person and estate of U. D. Garrison, also known as Doyal Garrison, a non compos mentis. The plaintiff, bonding company, became surety on the bond of said Stanage, who agreed with the surety company that the* Abilene State Bank, defendant, should be used as a depository of the funds coming into his hands as guardian, and that the same should be paid out only on checks signed by himself as guardian, and countersigned by P. S. Kauffman, Jr., the agent of plaintiff. By a written communication to the defendant bank, said Stanage acquainted it with the agreement thus entered" into between himself and said surety. The bank acknowledged receipt of said notice by a communication as follows:

“To the United States Fidelity & Guaranty Company:
“Gentlemen:
“We have received and filed notice dated July 16th, 1927, from S. R. Stanage as Guardian in the matter of U. D. Garrison, that all checks on any deposits in the bank in his name as such Guardian must, if honored by us, first be countersigned by P. S. Kauffman, Jr.'
“There is-now on deposit in this bank in the name of Doyal Garrison as such $369.75.
“Yours very truly,
“Abilene State Bank.”

Pursuant to the above notice and arrangement, the $369.75 was deposited to the a&count of S. R. Stanage, guardian of the estate of Garrison. Vendor’s lien notes amounting to about $2,800 left in the custody of the bank were delivered into the custody of said guardian, who was thereafter by order of the probate court authorized to collect two of said $500 vendor’s lien notes. After the opening of said guardian’s account, the bank paid out $178.51 of said first-named funds on the guardian’s checks, which had not been countersigned by plaintiff’s agent. Subsequently, the court disapproved a report which the said Stanage, guardian, attempted to make of the condition of the estate, and Stanage was himself later removed as guardian of the estate. The action of the court was based upon a finding that said guardian had misappropriated $779.86 of the ward’s funds. Upon the removal of Stanage as guardian, one James P. Stinson was appointed guardian of the person and estate of said Garrison, and he soon thereafter filed in the court a petition in which ho alleged that the guardianship proceedings of said Stanage, as well as that of himself, were void. Various reasons were assigned why they were null and void, chiefly perhaps because Garrison had been adjudged a lunatic without .any notice, hearing, or trial by jury. In any event, the trial court found that both guardianship proceedings were void, and since no issue arises on this record as to the correctness of that conclusion, the various questions will be disposed of upon the theory adopted in the trial court.

In his petition said Stinson alleged that his predecessor, Stanage, during his purported guardianship, had misappropriated various snips belonging to said Garrison, and that he had demanded the return of the same to said ward by the bonding company, the surety on Stanage’s bond. It was ascertained that the amount of the shortage was $681.91, and in his petition said Stinson sought and obtainéd permission from the court to settle with the surety company for that amount and receipt it in full for all claims against it arising out of Stanage’s misapplication of funds belonging to Garrison. Upon such conditions the surety company paid the above- sum to Stin-son, who, upon further permission and authority of the court, paid the same directly to said Garrison. Upon this state of facts the surety company’s right to recover the $178.51 is challenged by four propositions, which are, in substance, as follows:

(1) That the judgment is erroneous, in that the plaintiff failed to show the existence of a contract between the surety company and the bank, binding the latter to pay to the plaintiff the sum sued for; (2) that the guardianship proceedings of Garrison being null and void, and the funds being already on deposit in the defendant bank in the name of Garrison, there was no consideration for any contract between the plaintiff and the defendant with reference to said funds; (3) that such guardianship proceedings being null and void as aforesaid, and the evidence showing that the plaintiff surety company was not compelled to pay any sum of money to Stin-son or any other person legally authorized to. collect same, the court erred in rendering a judgment for plaintiff; and (4) the evidence showing that the money on deposit with the' bank belonged to Garrison and was deposited by him, and that the guardianship proceedings were void, the defendant bank was liable to Garrison only for said funds and no one else.

As above observed, each of appellant's propositions rests essentially upon the fact that the two purported guardianships were null apd void. Under the appellant’s first proposition, and in fact under- each of them, it is contended that said Stanage and Stinson having never been appointed guardian of the estate of Garrison, neither of them had the right to control such funds and had no capacity whatever to contract with reference to how the bank should pay out such funds, and that the bank had no authority itself to pay out the funds, except upon an order from Garrison himself, the party to whom the money belonged, and who placed it on deposit in the bank. The gist of the propositions is that the foregoing notice to the bank of the agreement between Stanage and the surety company, plaintiff in this case, is wholly insufficient to bind the Abilene State Bank to pay the plaintiff in this case for having paid out a part of the funds of Doyal Garrison without the signature of the plaintiff’s agent, and that the mere fact that the bank signed the notice of filing of such a contract did not bind the bank to dispose of the proceeds as agreed upon between said Stanage and the plaintiff; the arrangement or purported contract being a nullity because the parties to the same had no legal right or capacity to carry it out.

We do not believe these contentions are supported by the record. If in the outset the bank had denounced the Stanage guardianship proceeding as illegal and void, and refused to permit the purported guardian to take charge of or in any way dispose of Garrison’s funds, it would certainly have, been within its right and duly performed its obligations to its depositor by reason of the contentions made. This it did not do, however, and the bank, as did all the other parties involved, regarded the guardianship proceedings as legal and valid. It acknowledged receipt of the notice of the filing of the contract between Stanage and the surety company, passed the $369.95 belonging to Garrison to the credit of Stanage, guardian, and apparently paid out $137.28 of said funds on countersigned checks of the guardian, and $178.51 sued for upon checks bf the guardian alone. This latter amount was by order of the probate court later collected' by the guardian, Stinson, and paid to Garrison himself, Who was never legally adjudicated an insane person, and who remained presumptively sane.

Under the facts of the case the bank undoubtedly should have retained the funds and delivered them on demand to Garrison. It did not do so, and regardless of what it might have done, this particular fund was, on demand of Stinson, actually refunded by the surety company to him, who, under order of the court, paid it directly to the rightful owner, Garrison. Under these circumstances, Garrison could not recover this amount from the bank, since he has not been injured by what occurred.

Had Garrison sued the guardian, Stan-age, and the surety company for the $178.51 converted by said guardian, they would not be heard to defend on the ground of alleged invalidity of the guardianship proceedings, and thereby escape liability for the misappropriation of funds which came into the hands of the guardian under and by virtue of said proceedings, and the bond executed by the surety company. Portis v. Cummings, 21 Tex. 266; Minchew et al. v. Case (Tex. Civ. App.) 143 S. W. 366; Moore et al. v. Hanscom (Tex. Civ. App.) 103 S. W. 665; Frenkel v. Caddou (Tex. Civ. App.) 40 S. W. 638.

Upon the same principle and for like reasons, the bank, having recognized the validity of the proceedings (as did Stanage and the surety), and placed the funds to the account of the guardian Stanage, and then permitted him to draw it out on checks not countersigned, but in violation of the three-party agreement by which thé deposit was left with the bank, should not be permitted to avoid liability to the surety company, which made good to Garrison the defalcation rendered possible by the bank’s conduct.

After such notice and agreement, the bank was dealing with a joint deposit and should at least have observed the terms upon which it was made to avoid rendering itself liable for the manner in which it paid out the same. Columbia Finance & Trust Co. v. First Natl. Bank, 116 Ky. 364, 76 S. W. 156.

Also, having accepted the deposit and actually passed the same to the account of the guardian upon the strength of the purported guardianship proceedings, and in recognition of the surety company’s relation to the fund and the estate, the bank should-not, under the facts alleged and proved in this case, be permitted to assert the invalidity of the guardianship as a defense to this suit. Frenkel v. Caddou (Tex. Civ. App.) 40 S. W., 638; Willey v. Crocker, 7 Cal. Unrep. 152, 72 P. 832.

According to the agreed statement of facts and the court’s findings, the funds would not have been left with the bank had it not recognized the validity of the guardianship proceedings and agreed to pay out the funds on countersigned checks. From such circumstances arose the duty on the part of the bank' to make good to the surety company such funds belonging to Garrison, paid out on checks not countersigned, and misappropriated by Stanage.

It is believed that the invalidity of the two guardianship proceedings in no way affects the rights of the parties to this litigation. Garrison had the right to demand and recover the misappropriated funds from the bank or from Stanage and his surety. The controlling fact is that the default has been made good to Garrison, regardless of .the means and agency by which it was done, and, having been made good by the surety company, who was obligated to do so upon the demand of Garrison, the surety has a right to recover of the bank the $178.51 misappropriated by Stanage and paid to him by the bank in violation of the agreement alleged. That agreement, we think, was based upon a sufficient and valuable consideration. In the agreed statement of facts it is said: “If said bank had not executed said written agreement, the plaintiff, as surety on the bond of said S. R. Stanage, would have required said guardian to remove said funds from said bank, and the consideration for said agreement was the keeping by the guardian of said funds on deposit in said bank.”

The keeping of the funds and the use thereof by the bank, under the mutual agreement that it would pay the same only on countersigned checks by the surety, was a sufficient consideration to require the bank’s observance of the terms of the agreement. Clement v. Producers’ Rfg. Co. (Tex. Com. App.) 277 S. W. 634.

. The further contention of the appellant that, since the guardianship proceedings were invalid, it was and is liable to Garrison only, i's without merit. It has not paid said funds to Garrison, but the default has been made good to the estate by the payment of the amount directly to Garrison, who therefore is not injured nor in a position to demand repayment by the bank.

The appellant’s propositions are kindred and in fact present the same contention from different angles. They have been discussed together, and from what has been said it follows that we overrule each of them.

For the reasons assigned, the judgment of the trial court is affirmed.