First State Bank of Denton v. Vestal & Naugle

48 S.W.2d 706

• Court: Court of Appeals of Texas
• Decided: January 9, 1932
• Docket: No. 12588
• Status: Published

Opinions

DUNKLIN, J.

F. H. Vestal and I. T. Naugle, composing the partnership firm of Vestal & Naugle, were engaged as contractors in the construction of residences and other buildings in the town of Denton, and as such contractors they built a residence for C. N. Adkisson. The contract to do the work was in the name of I. T. Naugle only, but for the benefit of the partnership firm. As a consideration for the work to be performed Adkisson and wife executed their promissory note, payable to Naugle, in the sum of $3,500, and also a mechanic’s lien on the lot and improvements to secure the payment of the note. Those two instruments were dated June, 5, 1930. On August 28, 1930, the partnership firm of Vestal & Naugle borrowed from the First State Bank of Denton the sum of $3,500 to secure money with which to finish Adkisson’s residence, and attached the Adkisson note to-a note given for the money so borrowed as collateral security. Vestal & Naugle then had an account with the bank, and, when the Ad-kisson note was turned over to it, the bank credited the $3,500, representing the proceeds of the Adkisson note, to the account of Vestal & Naugle. As soon as the deposit was made, the cashier of the bank, without the consent of either member of the partnership, charged $1,200, which Naugle then owed the bank on his individual account, against the balance owing by the bank to the partnership firm, thus reducing in that sum the amount which the books of the bank showed it owed to the partnership firm.

This suit was instituted by Vestal & Naugle to recover the $1,200' so charged against their partnership account, and, from a judgment in favor of the plaintiffs, the defendant bank has prosecuted this appeal. The judgment so rendered was in obedience to an instructed verdict.

The rule of law which was invoked by the plaintiff and followed by the court upon the trial, and which is well settled by all of the authorities, is that a bank cannot charge a debt owing to it by a member of a partnership against an account which it owes to the partnership of which that individual depositor is a member. 7 Corpus Juris, 659 and authorities there cited; Manhattan Bank v. Walker, 130 U. S. 267, 9 S. Ct. 519, 32 L. Ed. 959; Ray v. Cartwright (Tex. Civ. App.) 180 S.W. 927; Poindexter v. Hicks (Tex. Civ. App.) 260 S. W. 206; Shaw v. Centerfield Oil Co. (Tex. Civ. App.) 10 S.W.(2d) 144; 47 Corpus Juris, 780, 781-783.

By special pleading the bank sought to establish credit against plaintiff’s demand of what was claimed to be Naugle’s partnership interest in the $3,500 for which the firm was given credit on the bank’s books, and some testimony was introduced in an attempt to show that, upon a settlement and winding up of the partnership business of Vestal & Naugle, Naugle had an interest in that deposit, after payment of all the partnership debts to different creditors, of $1,065.65.

We know of no rule which would permit such a defense to plaintiff’s suit, involving as it did a separate and distinct cause of action for winding up a partnership business against the will of its members with none of the other creditors parties to the suit. It is to be noted further that there was no pleading of insolvency of the partnership or its members, nor was there any pleading that the Adkisson note for which the firm was given credit, on the bank’s books was in fact owned exclusively by Naugle, or that the bank was induced to give credit therefor through any fraud practiced upon it by Naugle, or by mistake.

There being no controversy as to the facts recited above, the court did not err in instructing a verdict in plaintiff’s favor, and, accordingly, all assignments of error are ■overruled, and the judgment of the trial court is affirmed.