Rains v. Mercantile Nat. Bank at Dallas

188 S.W.2d 798, 1945 Tex. App. LEXIS 532
CourtCourt of Appeals of Texas
DecidedFebruary 8, 1945
DocketNo. 4399.
StatusPublished
Cited by10 cases

This text of 188 S.W.2d 798 (Rains v. Mercantile Nat. Bank at Dallas) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Rains v. Mercantile Nat. Bank at Dallas, 188 S.W.2d 798, 1945 Tex. App. LEXIS 532 (Tex. Ct. App. 1945).

Opinion

PRICE, Chief Justice.

This is an appeal by Upton County and Mrs. J. E. Rains, the County Treasurer thereof, from a judgment of the District Court of Upton County, rendered on the verdict of a jury in an action wherein Mercantile National Bank at Dallas was plaintiff and said appellants and the First State Bank of Rankin were defendants. The First State Bank was a defendant in a cross action of the Mercantile National Bank.

Hereinafter the plaintiff will be designated as “Bank,” the defendant Upton County as “County,” and Mrs. J. E. Rains as County Treasurer, as “Mrs. Rains.”

*800 The Bank declared ■ on scrip warrants aggregating $32,352.96 drawn by the County on-its General Fund by its duly authorized officers; scrip warrants of the County aggregating $10,212.74, so drawn on its Officers’ Salary Fund; and scrip warrants aggregating $21,835.94, so drawn by the County against its Road and Bridge Fund. The total of these three classes of warrants was $64,401.64..' The warrants were something over eleven hundred in number, payable to various parties, and the Bank acquired all of them by purchase; all were dated and issued between January 1, 1942 and November 1, 1942, all purporting to bear interest at the rate of four per cent per annum from date until paid.

The Bank sought an injunction against Mrs. Rains in her official capacity restraining her from paying unregistered warrants on the funds on which such warrants were drawn, and from paying any warrants on, said funds registered subsequent to' the date of the registration of the warrants in suit, until the warrants in suit had been paid. In substance, commanding her, as funds applicable to the warrants of the Bank came into the depository, that such warrants be paid in the order of their registration.

Relief was sought against the First State Bank of Rankin only in the event the warrants sued on were held invalid.

The County and Mrs. Rains assailed all warrants as a whole on the ground that in connection with a contract between the County and Rauscher-Pierce Company of Dallas, whereby said Company had agreed to purchase scrip warrants issued during the year 1942 and to be issued during that year in a total sum of $90,000, the same were void. In substance, it was charged that the warrants represented debts of the County for which no tax was levied to> pay same, in violation of Section 7, Article XI, of the Constitution, Vernon’s Ann.St. Certain of the warrants were attacked as void on the ground that the same were issued to Officers of the County in violation of Section 7, of Article 3912e, Vernon’s Ann. Statutes, such Article, in substance, forbidding the issuance of a warrant to a county officer indebted at the time to the county. Some were attacked on the ground that they were issued for an illegal purpose.

The issues submitted to the jury, with the findings thereon, were as follows:

“Special Issue No. 1: Do you find from a preponderance of the evidence that the plaintiff, Mercantile National Bank at Dallas, is the owner and holder of the warrants herein sued on ? Answer ‘yes’ or ‘no.’ ”
Answer: “Yes.”
“Special Issue No. 2: Do you find from a preponderance of the evidence that the reasonably expected current revenue of Upton County for the year 1942 was not a sum amounting to as much as the sum_ of claims representing the ordinary expenses of the County for that year. You will answer ‘It was not’ or ‘It was.’ ”
Answer: “It was.”
“Special Issue No. 3: Do you find from a preponderance of the evidence that in purchasing the warrants herein sued upon, the plaintiff, Mercantile National Bank at Dallas, relied upon the contract between Rausche.r-Pierce & Company and Upton County, executed April 13, 1942? Answer ‘Yes’ or ‘No.’ ”
Answer: “Yes.”
“Special Issue No. 4: Do you find from a preponderance of the evidence that the defendant herein, Upton County, acting by and through it’s Commissioners’ Court and County Officers, is now estopped from denying liability on the warrants herein sued upon? Answer ‘The County is estopped’ or ‘The County is not estopped.’ ”
Answer: “The County is estopped.”
“Special Issue No. 5: Do you find from a preponderance of the evidence that the plaintiff, Mercantile National Bank at Dallas, and Upton County, acting through its officials, reasonably expected that the warrants herein sued upon were to be paid out of the County’s current revenues for 1942? Answer ‘Yes’ or ‘No.’”
Answer: “Yes.”
“Special Issue No. 6: Do you find from a preponderance of the evidence that the plaintiff herein, Mercantile National Bank at Dallas, in purchasing the warrants herein sued upon, at the time of their purchase relied upon the acts and conduct of Upton County, acting through its Commissioners’ Court and officials as to the validity of such warrants? Answer ‘Yes’ or ‘No.’ ”
Answer: “Yes.”

Judgment was rendered in favor of the Bank establishing a liability on the warrants in the sum of $64,401.64, together with four per cent interest on each warrant *801 from its date to the date of the judgment; from the date of the judgment the amount thereof was to bear interest at the rate of six per cent per annum. As to Mrs. Rains in her official capacity, an injunction was granted substantially in terms sought by the Bank.

Appellants rely on thirteen points for a reversal. The first seven are briefed as a group, and may be here so considered. The seven points, for practically the same reason, urge that each and all of the warrants, the basis of the judgment, were void,—void because issued in violation of Section 7, of Article XI, of the Constitution. The ap^ plicable portion of said section of the Constitution is as follows:

“But no debt for any purpose shall ever be incurred in any manner by any city or county unless provision is made, at the time of creating the same, for levy and collecting of sufficient tax to pay the interest thereon and provide at least two per cent (2%) as a sinking fund.”

The scrip warrants we here deal with are ordinary scrip warrants, save that same provide for four per cent interest from date. Their payment is deferred to no particular date. They amount to a certificate that the payee had an allowed and approved claim against the County in the amount of each warrant.

A scrip warrant drawn by a county for current expenses does not come within the prohibition of Section 7, of Article XI, of the Constitution, if there is reasonable expectation that same be paid out of the county’s current revenues for the year. Stevenson v. Blake, 131 Tex. 103, 113 S.W. 2d 525.

This is true, even though at the time such warrant is drawn on the particular fund, there is not sufficient cash in such fund available to pay same. Wilkinson v. Franklin County, Tex.Civ.App., 94 S.W.2d 1190, writ refused.

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188 S.W.2d 798, 1945 Tex. App. LEXIS 532, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rains-v-mercantile-nat-bank-at-dallas-texapp-1945.