Opinion
No. 3578.
December 1, 1928. Rehearing Denied December 6, 1928.
Appeal from District Court, Lamar County; Geo. P. Blackburn, Judge.
Action by A. J. Rose against James Shaw, Banking Commissioner. Judgment for plaintiff, and defendant appeals. Reformed and affirmed.
At times prior to May 26, 1926, when the First State Bank of Paris, Tex., being insolvent, ceased to do business and its affairs were taken over by the state banking commissioner, appellee and various other persons whose rights he acquired deposited in said bank sums of money aggregating $66.798.32. The deposit made by appellee Rose was evidenced by a certificate as follows:
"The First State Bank."$16,000. No. 1056.
"Paris, Texas, April 30, 1926.
"This certifies that A. J. Rose had deposited in this bank sixteen thousand dollars payable to the order of himself in current funds on the return of the certificate properly endorsed January 1, 1927, with interest at no per cent. per annum for the time specified. This certificate is not subject to check and is not negotiable. No interest after maturity.
"E. H. McGlasson, V. P."
The deposits by the other persons were evidenced by certificates, twenty-seven in number, in all respects like the one set out above, except as to dates, amounts, and times payable, and except that it was stipulated in each of the twenty-seven that the bank should pay interest on the amount thereof from the date thereof until same matured, at a rate specified. The capital stock of the bank was $100,000. As it was authorized by law to do, the bank placed $100,000 in United States bonds, purchased by it with its assets, in the hands of the banking commissioner to hold as security for its depositors. After he took over the bank's affairs, the banking commissioner collected the bonds and "declared a dividend in favor of the depositors of said bank of 13.817 per cent. as payable out of the proceeds," but refused to recognize and treat appellee and his assignors as such depositors. This suit by appellee as the payee of the certificate set out above and as assignee of the payees of the other twenty-seven certificates, against the banking commissioner, was to compel the banking commissioner to recognize him as a depositor entitled to share in the dividend to be paid with the proceeds of the bonds referred to. The defense urged by the banking commissioner to the suit was that appellee and his assignors were not "depositors" for whose security the bonds were pledged, but instead were mere creditors without security for the debts due them. The trial was to the court without a jury. The court, contrary to the banking commissioner's contention, determined that appellee and his assignors were "depositors" within the meaning of the statute (article 475, R.S. 1925) and as such were entitled to share in the dividend to be paid with the proceeds of the bonds, and, having found that the unpaid amount of the certificates was $66,798.32, rendered judgment in appellee's favor against the banking commissioner for $9,229.23, the amount he found to be 13.817 per cent. of said $66,798.32.
Jno. W. Goodwin, L. C. Sutton, and Joe T. Goodwin, all of Austin, for appellant.
W. A. Hutchison, of Paris, for appellee.
All the certificates sued upon, except the one for $16,000 issued to appellee, set out in the statement above, were like the one considered by this court in Shaw v. McBride (Tex.Civ.App.) 9 S.W.2d 410, where, in determining a contention similar to the one made here by appellant, it was held that a deposit of money in a bank was not, quoting from the syllabus, "converted to ordinary loan, so as to lose protection of bond security system protecting deposits under Rev.St. 1925, Arts. 475, 475a, 523, by fact that contract was reduced to writing in form of certificate which provided for interest for definite period of four months and stipulated that deposit was not subject to check, though sum deposited was made payable on return of certificate four months after date. * * * Promise to pay deposit is express or implied in any event, and fact that promise is reduced to writing in form of certificate of deposit does not alter the nature of the transaction or transform the deposit into a commercial loan, though certificate of deposit is similar to promissory note." Following that decision, we hold that the judgment in this case is not erroneous so far as it determines that appellee was entitled to the relief he sought as the assignee of the payees of the twenty-seven certificates above referred to as having been issued to other persons than him.
But we think the judgment must be held to be erroneous so far as it is based on the certificate for $16,000 issued to appellee. That certificate, it will be noted, was a noninterest-bearing certificate, which by force of article 530, R.S. 1925, the bank did not have a right to issue, and which was not protected by the provisions of the Bank Deposit Guaranty Law, embodied in chapter 7 of title 16 of the Revised Statutes of 1925. Said article 530 of the statutes is as follows:
"No state bank or bank and trust company organized and doing business under the provisions of this title [16] shall be allowed to issue any noninterest-bearing certificates of deposit. Such certificates, if issued, shall not be protected under Chapter 7 of this title [16]."
The judgment will be so reformed as to adjudge a recovery of $7,018.80, instead of $9,229.52, in appellee's favor against the appellant, and, as so reformed, will be affirmed.