The Houston daily post. [volume] (Houston, Tex.) 1886-1903, 1897-12-13
RIGHT TO SUE ON CHECK.
Court OF Appeals Is Divided on the
Question.
AN IMPORTANT POINT IS INVOLVED.
Majority OF the Court Believe that
Suit to Enforce Payment Can
Not lie Maintained.
n IMPORTANT POINT IS INVOLVED.

Galveston, Texas, December 12-An
important decision, TO which Chief Justice
Garrett dissents. was handed down dur
ing the past week by the court of civil
appeals which will be OF no little interest
TO both lawyers and commercial men. The
case is entitled It. w. House appellant, vs.
kountze Bros, ct al. appellees, and came
on appeal from Smith county. The facts ~
recited in the opinion ore as follows:
On November IL. 1891, Bonner a Bonner
VINO We're bankers doing business in the
city Of Tyler, Texas. drew check paya-
Bile to I. w. House, a banker of Houston,
Texas, on kountze Bros, who were bank
ers doing business in New York City, for
the sum of $4,000, Two days afterwards, ON
November II, 1891, Bonner 4 Bonner be-
came insolvent, and made deed of assign
ment for the benefit OF their creditors. The
First National bank OF Dallas, Texas,
brought suit against them In the
supreme court of the city OF New
York, upon an Indebtedness in its ia
Vor, and sued out writ OF garnish-
inent or attachment against Kouut2e Bros,
Wnlcn was served on the latter Nuvetaber
10, 1891, Next day, on November II. tue
check drawn in favor OF T. W. House was
| resented to kountze Bros. for payment
sentiment of the check kountze Bros hal
on deposit In their bank TO the credit Of
fonner n Boner the sum OF S7246,ta, which
within Few days was increased 10 $S0ly.29
by remittances which were then in transit
hountze Bros. were the correspondents of
ionner a Bonner In New York, and the
money on deposit with them was for the
purpose of meeting sucn drafts and checks
as might be drawn by them in favor of their
customers kount2e Bros. did business In
the usual manner of bankers. and had no
special agreement with respect TO the pay
ment of the check drawn in favor of f, w.
House and 1t was drawn and delivered to
the latter in the usual course of business
At the time that Bonner 4 Bonner failed
and suspended they were indebted 10
hountze Bros ON three promissory notes.
Two OF which were paid by the proceeds OF
collaterals attached TO the notes as sccur,.
~. and sum credited upon the third
7. w. House brought suit against Bonner
Bonner as the draweys, and against
kountze Bros. on their obligation TO ac-
cept and pay the check above mentioned.
making the City National bank of Dallas a
party defendant in order to adjudicate It's
rights under the garnishment Kountze
Bros. answered the petition by a demurrer
that no liability was created against them
on the unaccepted check They also set up
special plea that Bonner a. Bonner were
indebted TO them and claimed lion on
The collateral in their hands, as we'll as tho
deposit to the credit of Bonner & Bonner.
They also set up the garnishment proceed
ings by the City National bank oirl claim
ed that the deposit was In custodia ieeis.
and that there was not more than enough
IN their hands to satisfy their claims and
that Of the city National bank
Tho court below. on the trial OF the unse
held that There was no assignment Of the
fund. ana that aS the check had never
hoo tod
tin had no cause Of action against them
and rendered Judgment In favor of Kountze
| Brcs and thn CIV National hnnk but
AGAINST Bonner Bonner in favor OF T. w
House for the full amount sued for,
The contention OF 7. W House the an
pellent' was that the check operated rs An
assignment 10 him or the funds deposited
TO the credit OF Bonner & Bonner from
tho time OF the drawing OF the check, and
rave him the RIGHT Of action against
Hount2e Bros. although the check Wa
never accented bv them
[ II Is well settled says The court that
/ bank deposit Is debt owed by the banker
/ TO the deposition, and that a par o. n
| suit in action may be assigned and suit
| maintained against the debtor for the part
| so assigned. But there ia a difference Of
! opinion about the right OF a holder OF q
| check drawn by a depositor aginst money
| deposited by him in bank and never ac-
4
| thereon aeinst the bank. This weight of
authority is that such suit can not be
| maintained On the other hand, quite q
number Of the States have adopted the con-
trary rule, and hold the drawing OF a
check by banker against funds on de-
| posit as an assignment pro tanto Of the
| funds in the hands OF the banker TO the
| drawee of tho check. or at least II there
| is no assignment. that the check holder
| has such privity Of contract with the bank
! er as 10 authorize him TO maintain an &C
ton aginst the bank and upon au implied
promise to pay the check Of the 1cpositor-
| In this State the question has never been
passed upon by the supreme court. 1t was
before the court OF civil appeals TOT The
Fourth district, and that court sustained
the right 10 sue.
Tho majority OF the court, after an eA-
| haustiVe examination OF the authorities In
| favor OF and against the rights to sue. are
of the opinion that the weight OF reason.
as well as OF authority. Is in support OF the
rule that the suit not be maintained.
Chief Justice Garrett. however. reaches the
! opposite conclusion, and is Of the opnion
| that while the weight OF authority l.
against the rule authorizing the right 10
sue. yet as stated by the text writer's. tn.
, weight OF the reason is with those courts
which hold that the check holder has tho
right to sue the bank. although his check
had never been accepted The judgment al
the court below was affirmed.