Court Opinion

ID: 3964274
Source: CourtListenerOpinion
Date Created: 2016-07-06 10:24:08.040983+00
Date Added: 2024-06-11T14:17:39.203612
License: Public Domain

The testimony in the record does not, in my opinion, disclose facts and circumstances relative to the repurchasing agreement executed to appellee bank on behalf of appellant bank by its active vice president, J. K. Wood, which makes said repurchasing agreement illegal, and therefore void and unenforceable by appellee. The testimony does not show that the appellee bank had any interest in preventing the notes from appearing as liabilities of the appellant bank nor that there was any agreement that said notes should not appear as liabilities against the appellant bank, nor that the facts of the transaction should not be revealed, nor any design on the part of appellee that the indorsing of the notes "without recourse" and giving the repurchasing agreement were to be used for any illegal purpose. The most that may be said from the record is that the cashier of the appellee bank knew that the transaction could or would be so handled by the appellant bank as to keep the notes from appearing as liabilities of said bank. The money was not to be used for an illegal purpose.
In the United States it is held, by the weight of authority, "that the mere knowledge of the seller of goods or services, or of the vendor or the lessor of property, that the buyer intends an illegal use of them, is no defense to an action for the price or for rent, provided he did nothing in furtherance of the unlawful purpose." 13 C.J. par. 476, p. 517; 2 Page on Contracts, par. 1109.
The right to recover money loaned is controlled by the same rule applicable to the sale of goods, and recovery is permitted where the lender is chargeable only with a knowledge that the money may be used in an illegal way. 13 C.J. p. 519, par. 479.
In Futch v. Sanger (Tex.Civ.App.) 163 S.W. 597, the court says:
"It has been held in this state that the mere knowledge that money was to be used by the borrower for an illegal purpose when loaned will not, without further act in furtherance thereof, defeat the lender's right to recovery. See Cleveland v. Taylor [49 Tex. Civ. App. 496] 108 S.W. 1037; Oliphant v. Markham, 79 Tex. 547, 15 S.W. 569, 23 Am.St.Rep. 363; Lewis v. Alexander, 51 Tex. 578. See, also, to the same effect, Jackson v. City Nat. Bank, 125 Ind. 347, 25 N.E. 430, 9 L.R.A. 657."
In this case a writ of error was denied by the Supreme Court, 170 S.W. xvii. The case was again before the Court of Civil Appeals (Sanger v. Futch, 208 S.W. 681), and the court again announced the same doctrine.
Appellee pleaded that on September 1, 1925, the date of the repurchasing agreement, it gave credit on its books to the appellant for the sum of $9,900.41, the value of the two notes, less interest that would accrue thereon, and that appellant, by check and otherwise, withdrew said sum from appellee bank, and that, by the payment of the proceeds of said notes to appellant, it became liable to appellee for the face value of the $5,500 Wood note.
The record discloses that the J. F. Anton note was paid by him in due course with a check drawn on appellant bank and forwarded by it to appellee.
Appellant and appellee were correspondent banks. It is admitted that J. K. Wood was the active vice president of appellant; that appellant had furnished to appellee the genuine signature of J. K. Wood, and advised appellee to recognize his signature "in payment of funds and the transaction of other business for our account"; that on September 1, 1925, appellee, as a result of placing with it said notes indorsed "without recourse" and the repurchasing agreement, gave appellant credit for $9,900.41; that J. K. Wood, on his return to Slaton on September 2d, advised appellant bank that he had been to Amarillo, and had sold the J. F. Anton note to appellee, and secured a personal loan of $5,500, and asked that the proper entries be made on the books of the appellant bank; that appellant the same day charged or debited appellee with $9,900.41 credited "bills receivable" with the Anton note of $4,500, making the proper interest charge for said note, and credited the account of J. K. Wood with $5,500, the Wood note, making the proper interest charge against Wood, issued to J. K. Wood a deposit slip for $5,500; that on September 3d appellant's assistant cashier received a telegram from J. K. Wood, reading:
"Wire Amarillo National credit my account fifty-seven hundred dollars Charge my account."
The cashier of the appellant bank testified, "Our bank acted upon the advice contained in that telegram," and, on the same day, sent the appellee the following telegram:
"Charge our account and credit J. K. Wood fifty-seven hundred dollars.
"Slaton State Bank."
The testimony is that, upon receipt of said telegram, appellee credited J. K. Wood with $5,700, and charged the account of the *Page 645 
appellant with said sum, and at the time the appellant sent the telegram to the appellee it credited the appellee with said sum, and charged it to the account of J. K. Wood; that J. K. Wood had on deposit with appellant a sufficient sum in excess of the $5,500 to take care of the $5,700; that on August 31st he gave his check to appellant on appellee for $5,500, which was paid by appellee September 4, 1925.
Neither appellant nor appellee knew at the time of any of the above transactions that the Wood note was a forgery, nor that J. K. Wood was "pulling a deal." The appellee had advanced the money to appellant, and gave it credit therefor. The appellant knew that it had been credited by appellee with the $5,500 Wood note.
For the reasons above stated and the facts recited, I concur in the affirmance of the case.