Opinion
No. 3685.
June 7, 1929. Rehearing Denied June 13, 1929.
Appeal from District Court, Kaufman County; Joel R. Bond, Judge.
Proceeding by the Mayfield Company against the Hale Company wherein the First National Bank of Terrell was garnishee. The American National Bank of San Francisco made itself a party to the proceedings as successor to the American National Bank, which had claimed proceeds of draft. From the judgment, the American Trust Company, successor to the Mercantile Trust Company of California, successor to the American Bank, and another, appeal. Affirmed.
In a suit commenced in the district court of Smith county against the Hale Company, a California corporation, the Mayfield Company, a Texas corporation, appellee here, sued out a writ of garnishment against the First Bank of Terrell, also an appellee here. The writ was served on said First National Bank of Terrell, hereinafter referred to as the Terrell Bank, January 26, 1923. In its answer to the writ the Terrell Bank denied it was indebted to the Hale Company, or had effects of that company in its possession. The Mayfield Company controverted the answer, alleging that at the time the writ was served on it the Terrell Bank had in its possession $3,813.81 belonging to the Hale Company, being the proceeds of a draft drawn by the Hale Company in favor of the American National Bank, paid by it, the Mayfield Company, and alleging, further, that said draft "had [quoting] merely been placed by the Hale Company with the American National Bank of San Francisco, Cal., for forwarding and collection purposes only, and that the said Hale Company was entitled to the proceeds thereof and that upon the payment of said draft the said Terrell Bank became indebted to the said Hale Company, or had funds belonging to it in its possession, and that such status remained in effect until the writ of garnishment herein was served upon said garnishee." In a supplemental answer the Terrell Bank alleged that it received the draft referred to for collection from the American National Bank, which claimed to be the owner thereof, and alleged further that, after the writ was served on it, it turned over the proceeds of the draft to said American National Bank, on the execution and delivery to it by said bank of a bond indemnifying it against the claim of the Mayfield Company. In said answer the Terrell Bank asked that said American National Bank and the Fidelity Deposit Company of Maryland, surety on said indemnity bond, be made parties, and that it have judgment over against them for any sum recovered against it by the Terrell Bank. The American National Bank, becoming a party to the suit, answered, alleging that it purchased the draft of the Hale Company and was the owner of the proceeds thereof in the hands of the Terrell Bank. The American Bank of San Francisco, successor to said American National Bank, it seems, also filed an answer, in substance like the one filed by said American National Bank. As required by articles 4096-4098, R.S. 1925, the controversy as to the ownership of the draft and proceeds thereof was transferred to the district court of Kaufman county (where the garnishee resided) for trial. It appeared from evidence heard that the draft in question was as follows:
"Documents: R. R. Bill of Lading. Weight Certificate. Invoice.
"Hale Company "Importers Exporters No. A 39"Commission Merchants.
"San Francisco, January 12, 1923.
"At sight pay to the order of American National Bank $3813.81, three thousand eight hundred thirteen and 81/100 dollars, with exchange.
"Value received, and charge to the account of Hale Company,
"By Ira N. Moore.
"(600 bags beans)
"To Mayfield Company, Terrell, Texas."
On the face of the draft was the following stamp: "First National Bank of Terrell, Texas, Jan'y 26, 1923, paid." And on the back of same was the following: "Pay to the order of any bank or banker. The American National Bank 11 — 24 of San Francisco, Cal. 11 — 24."
Attached to the draft was a bill of lading and weight certificate, and a "little blue slip" as follows:
"Detach this notice before presenting "Dft. No. A-39 $3,813.81.
"Surrender documents on payment of draft. Hold draft for arrival and inspection of goods, if requested. No protest. Exchange not to be insisted upon. If dishonored, hold documents and telegraph reasons, also notify Kennedy Brokerage Co., Dallas, Texas.
"The Hale Company."
On the day it drew the draft set out above, to wit, January 12, 1923, the Hale Company wrote the Mayfield Company as follows:
"We inclose herewith copy of invoice No. 63 covering 600 bags Oriental pinto beans under contract No. 3911 which were shipped you yesterday via Sante Fé, Texas Midland, consigned to order notify in car No. AT SF 38495. For reimbursement we are drawing sight draft on you and trust that you will honor same upon presentation. Thanking you for this business, we remain, very truly yours, Hale Company, by E. P."
E. F. Morrow, vice president of the Terrell Bank, testified that his bank received the draft from the American National Bank, with instructions to collect it and to remit the proceeds to the Boatman's National Bank at St. Louis, "for their [the American National Bank's] advice."
Ira N. Moore, vice president of the Hale Company at the time it drew the draft, testified same was drawn "to cover the sale valuation of a shipment of merchandise sold to the Mayfield Company," and that it (the draft) was sold by the Hale, Company "to the American National Bank of San Francisco"; the Hale Company, he said, getting "unrestricted credit [quoting] for the face amount of the draft" on a checking account it had with the bank.
Irving H. Sanborn, vice president of the American National Bank at the time the draft was drawn, testified that the Hale Company was a regular customer of said bank and had a deposit account with it; that the bank "had no general or specific understanding or agreement with the Hale Company" as to the manner in which the proceeds of such drafts were to be handled. "Proceeds of the draft," he said, "were to reimburse us for the amount advanced." January 13, 1923, the Hale Company was given credit for the amount of the draft, "and had full privilege to draw against any funds to their credit." The Hale Company was to pay and did pay the bank interest upon the amount of the draft "from the time it was deposited" in his bank "until remittance of the proceeds thereof" by the collecting bank. The Hale Company was to reimburse the bank "in the event the payee declined to pay on presentation." "The amount advanced Hale Company on account of the draft was $3,813.81." The balance to the Hale Company's credit on its checking account with the American National Bank at the close of business January 13, 1926, the day the Hale Company's account was credited with the amount of the draft, was $45,170.75.
Special issues as follows, answered as indicated, were submitted to the jury:
(1) "Has the garnishor, the Mayfield Company, shown by a preponderance of the evidence that at the time the draft in question, to which was attached bill of lading, that it was the intention of the drawer thereof, the Hale Company, and the defendant, the American National Bank of San Francisco, that the title to said draft and the proceeds of same, when collected, were to be the property of the Hale Company, and not the property of the defendant, the American National Bank of San Francisco?" Answer: "Yes."
(2) "Did the American National Bank purchase the draft in question from the Hale Company prior to the service of writ of garnishment upon the garnishee at the instance of the plaintiff?" Answer: "No."
(3) "What would be a fair and reasonable compensation to be paid the garnishee, the First National Bank of Terrell, Texas, as an attorney's fee for making answer in this suit?" Answer: "$225."
The judgment rendered on the findings of the jury and findings it is assumed the trial court made was against the Terrell National Bank in favor of the Mayfield Company for $1,477.86, the amount of the judgment obtained by it against the Hale Company in the suit commenced in Smith county as stated, and in favor of the Terrell National Bank against the American Bank of San Francisco and its surety, the Fidelity Deposit Company of Maryland, on the indemnity bond referred to. The appeal is by the American Trust Company, successor to the Mercantile Trust Company of California, successor to the American Bank, successor to the American National Bank of San Francisco, and by the Fidelity Deposit Company of Maryland.
J. P. Coon and Thos. R. Bond, both of Terrell, for appellants.
T. B. Ramey, of Tyler, and Wynne Wynne, of Kaufman, for appellees.
This is the second appeal of this case. It appears from the report of the first appeal in 287 S.W. 510, and from the record now before us, that the evidence at the trial resulting in the judgment from which this appeal was prosecuted was the same as it was at the trial resulting in the judgment from which the first appeal was prosecuted, except that the instrument referred to as the "little blue slip," set out in the statement above, excluded as evidence at the former trial, was admitted as evidence at the last trial.
At the close of the evidence heard at the first trial the court thought it appeared as a matter of law that the American National Bank was the owner of the draft and proceeds thereof in the hands of the Terrell Bank, and instructed the jury to return a verdict in favor of those banks, and the jury, having done so, rendered judgment in accordance with the verdict. Thereupon the Mayance with the verdict. Thereupon the Mayport in the evidence for a finding that the Hale Company, instead, owned the proceeds of the draft, and that the court therefore erred in not submitting to the jury an issue as to whether it did or not, prosecuted the appeal from the judgment, which was heard by the Waco Court of Civil Appeals. That court (Justice Stanford dissenting), sustaining the Mayfield Company's contention, reversed the judgment and remanded the cause to the court below for another trial. At the new trial, in conformity to the holding of the Court of Civil Appeals, as is shown in the statement above, an issue as to the ownership of the draft and the proceeds thereof was submitted to the jury, and they found that same belonged to the Hale Company.
The contention of appellants on this appeal is that it conclusively appeared from the evidence that the American National Bank, and not the Hale Company, was the owner of the draft and the proceeds thereof in the hands of the Terrell Bank, and that the trial court therefore erred when he refused to instruct the jury to find in appellants' favor, and, instead, submitted to the jury the issue referred to.
We have carefully considered the evidence in the statement of facts sent to this court, and the majority and minority opinions of the Waco Court of Civil Appeals, as well as the argument in appellants' brief, and think the conclusion reached by the majority of said court was correct. As we also think the "little blue slip," admitted at the last trial, added much to the strength of the evidence upon which that conclusion was based, it follows our opinion is that the contention now urged by appellants should be overruled.
The judgment is affirmed.