Opinion
No. 3720.
June 20, 1929.
Appeal from District Court, Gregg County; Reuben A. Hall, Judge.
Suit by J. F. Meeks and others against James Shaw, Banking Commissioner, and others, in which R. E. Wylie was substituted by agreement for plaintiff. Judgment for the substituted plaintiff, and defendants appeal. Affirmed.
See, also, 19 S.W.2d 789.
J. F. Meeks brought the suit, in nature to impose a trust on a bank deposit, entitling him to its return or preference payment to claims of general depositors, or, in the alternative, to have the deposit classed as a claim protected under and payable out of the depositors' guaranty fund. The Commercial Guaranty State Bank of Longview was organized as a guaranty fund bank, and continued to so operate until it was taken over by the state banking commissioner on September 29, 1926, for the purpose of liquidation because of insolvency. At the time the bank was taken over by the state banking commissioner, there appeared on its books the following account:
J. K. Bivens Lumber Company. Trust Fund. Address S.E. Woods and R. E. Wylie.Dr. Cr.
September 8, 1925 ............................. $1,875.00
The court, in a trial before it without a jury, made the findings of fact that:
"I find as a fact that the draft involved in this case was deposited in the Commercial Guaranty State Bank as an unsecured, noninterest-bearing deposit, and the said deposit was held as such from the time it was made until the closing of the bank on September 29, 1926."
"I find that the said deposit was not made to be considered as a trust fund, and that it was not handled as a trust fund. I find that the J. K. Bivens Lumber Company was a partnership, and that the lumber company and all the members of the partnership have disclaimed any interest in this deposit."
In keeping with the findings of fact so made, judgment was entered in favor of R. E. Wylie (he being by agreement substituted for J. F. Meeks as claimant), in effect allowing and classifying his claim as one protected under the depositors' guaranty fund of the state, as provided by article 446, Rev.St. 1925. The banking commissioner has appealed, predicating error in the judgment.
The facts concerning the deposit are simple and undisputed.
On June 12, 1925, M. C. Dyer, of Dallas, Tex., acting by R. E. Wylie, his agent, entered into a written contract with J. F. Meeks, of Lincoln parish, La., to sell J. F. Meeks a three-twentieth undivided interest in 100,000 acres of timbered land in the state of Durango, Mexico, for the sum of $18,750. M. C. Dyer agreed to furnish to J. F. Meeks a complete abstract of title, and the sale and purchase was expressly upon the condition that the title to the land was approved by the attorneys named in the instrument.
Section 3 of the agreement stipulated: "The total purchase price shall be Eighteen Thousand, Seven Hundred and Fifty ($18,750.00) Dollars, payable by the buyer as follows: Ten per cent (10%) to be deposited, together with a copy of this contract, with the Commercial Guaranty State Bank of Longview, said deposit to be held by the said bank until the title to the said land is approved or rejected by J. S. McCaughan and associates, lawyers of Durango, Mexico, and Corpus Christi, Texas, or some reputable lawyer to be selected by the buyer. Upon approval of said title as above referred to and the conveyance in fee simple by good and sufficient deed in terms of general warranty, containing proper and accurate description of the land conveyed, to the party designated as buyer, it is agreed said bank is to deliver said funds so deposited to M. C. Dyer or order; and in addition the buyer agrees to pay twenty per cent. additional of the purchase price of the respective interests so conveyed and to execute his respective vendor's lien notes for the remaining seventy per cent., due one, two and three years from the date of actual transfer, bearing six per cent. interest per annum."
Section 4, as pertinent, reads: "In the event the title to the said land should not be approved within a reasonable time, not to exceed six months, then the money so deposited shall be returned by the bank to the buyer, less his respective portion of the attorney's fees."
On June 12, 1925, J. F. Meeks executed and delivered the following draft:
"Commercial Guaranty State Bank of Longview, Texas."Longview, Texas, June 12, 1925.
"On demand pay to the order of the Commercial Guaranty State Bank, Trustee, Longview, Texas, $1,875.00, Eighteen Hundred Seventy-five and no/100 Dollars, for value received, and charge to account of J. F. Meeks.
"To Ruston State Bank, Ruston La.
"Chg. Savings a/c M. 186."
At the time of the delivery of this draft to the Commercial Guaranty State Bank, there was a change and rearrangement of the original agreement by oral consent of the parties thereto to the extent of substituting "J. K. Bivens Lumber Company" for the "Commercial Guaranty State Bank" to hold and pay over the $1,875 in accordance with the terms of the agreement. According to the evidence, "there was agreement between Bert Bivens, Meeks, Sam Woods and some other, possibly Mr. Dyer," that the draft of J. F. Meeks should be "deposited in favor of the J. K. Bivens Lumber Company." Such arrangement was made by the parties, as appears, in order that the proceeds of the draft might constitute "deposits" that "could be drawn against whenever the conditions were met, whenever the contract was complied with." The Commercial Guaranty State Bank then accepted the draft of J. F. Meeks, and, treating it as a cash item, entered the amount as a deposit to the credit of the "J. K. Bivens Lumber Company," entering the transaction on its books as "trust fund, address S.E. Woods and R. E. Wylie." It was undisputed that the bank handled the draft "as a cash item on that date." The draft was paid in due course by the bank at Ruston, La. The proceeds of the draft so deposited to the credit of the J. K. Bivens Lumber Company were not kept separate and apart as a specific fund in specie by the lumber company or the bank. The contingency or condition provided for in the original agreement between J. F. Meeks and M. C. Dyer seemingly failed of performance by M. C. Dyer before and at the time of the bank's insolvency.
M. C. Dyer, R. E. Wylie, S.E. Woods, Jr., and J. K. Bivens Lumber Company were made parties defendant in the suit. S.E. Woods, Jr., made no claim to the fund. The J. K. Bivens Lumber Company filed an express disclaimer of any interest in or claim to the fund. M. C. Dyer and R. E. Wylie set up claim to the fund and asked for judgment in their behalf, but on the trial the following agreement was entered into: "It is agreed in open court between the plaintiff and the defendants Dyer and Wylie that the plaintiff withdraw all claim to the fund in controversy in favor of the defendant R. E. Wylie, leaving his claim uncontested by the plaintiff." R. E. Wylie claimed to have purchased the interest in the fund for a valuable consideration. The appeal does not involve any controversy between Dyer, Wylie, Woods, Meeks, and Bivens Lumber Company.
The trial court made findings of facts, which are here approved. So far as need be here copied, such findings, in addition to the findings afore set out, are, viz.:
"That on the date of the deposit the Commercial Guaranty State Bank of Longview, Texas, endorsed the said draft, making it payable to the order of any Bank, Banker or Trust Company, guaranteeing all endorsements theretofore made, and charged the said amount to the Republic National Bank of Dallas, Texas, and sent the said draft to the said Republic National Bank of Dallas, which said last named bank on June 13, 1925, gave the Commercial Guaranty State Bank of Longview credit for the amount named in said draft.
"That the said draft went in due course of banking, and was paid some few days after that time by the Ruston State Bank, against which it was drawn, and there was never any objection to the Ruston State Bank having paid the said draft.
"I find that on September 29, 1926, when the assets of the Commercial Guaranty State Bank of longview went into the charge and control of Chas. O. Austin, Banking Commissioner, and the said bank went into liquidation, the said bank had cash money assets in its bank in Longview to the amount of from $12.000.00 to $15.000.00, and that the said banking commissioner got all of the cash money as a part of the assets of said bank."
John W. Goodwin, of Austin, for appellants.
Young Stinchcomb and W. C. Shoults, all of Longview, for appellees.
There arises in the appeal the simple question of whether or not in the special circumstances, the deposit in controversy was, as determined by the trial court, protected under the depositors' guaranty fund. We think it was, and that the trial court correctly so held, because the deposit was an actual general deposit of money in the bank, as contradistinguished from a bailment or special deposit of the money in the bank to be specifically returned. According to the initial written agreement between J. F. Meeks and M. C. Dyer, there was "to be deposited" by J. F. Meeks $1,875.00 "with the Commercial Guaranty State Bank of Longview," and, when done, "said deposit to be held by the said bank" until the happening of the determinative event named in the writing. But this direct arrangement with the bank itself was before any deposit was made, changed by the parties thereto, and not carried out. The initial undertaking was changed so far as to have the J. K. Bivens Lumber Company, in place of the bank, take over and control the stipulated sum of money. In so doing the conduct of the parties and all the circumstances go to show the purpose and intention of Meeks, Dyer, and the Bivens Lumber Company was to have the draft of J. F. Meeks cashed and the proceeds actually deposited, as a general deposit and not in the nature of a bailment, in the bank to the credit of the Bivens Lumber Company. There was no intention on the part of Meeks, Dyer, and the Bivens Lumber Company to have the bank keep the proceeds of the draft as a special deposit and return the identical money so deposited, when the time should come for the money to be paid out by the Bivens Lumber Company. The character of return to be made by the bank was merely that of an equal amount of money. The trial court made the finding of fact, which we here sustain, that "the said deposit was not made to be considered as a trust." This is a companion case to the case of Banking Commissioner v. V. A. Davidson et al., 19 S.W.2d 789, this day decided by this court and the rulings therein are made applicable here, including the ruling respecting the extent and force of the trial court's judgment as was spread at large upon the minutes.
We have considered all the assignments of error, and overrule each of them as not affording grounds for reversal of the judgment
The judgment is affirmed.