Court Opinion

ID: 9832589
Source: CourtListenerOpinion
Date Created: 2023-09-01 22:01:15.528897+00
Date Added: 2024-06-11T07:43:48.520963
License: Public Domain

On Motions fon Rehearing.
 The appellee and all of the appellants, except Joe Burkett and the corporate sureties, have filed motions for rehearing. It is insisted by appellee that "we erred in our original holding ‘ that Eastland county had received payment for all funds for which the corporate sureties ever became liable, and in our application of the payments as was done in the original opinion. The claim is that, when the City National Bank delivered its assets to the Security State Bank & Trust Company, including the deposit of Eastland county then in said bank, such action constituted a default on the part of the City National Bank; that the obligation of the Security State Bank to account for the funds actually deposited therein by the county after it took over the City National Bank was a primary and independent obligation, and its obligation to pay the amount'owing to the county by virtue of the claimed default of the City National Bank was assumed and secondary; and that, therefore, it would be inequitable to apply the payments toward the liquidation of the secondary liability in preference to the primary liability. As stated in the original *672opinion, Eastland county acquiesced in the act of the City National Bank in delivering the county’s special deposits to the Security State Bank & Trust Company with . full knowledge thereof, and was paid interest on daily balances based upon the fact that said Security Bank had actually received the county’s money from the City National Bank, and generally continued to deal with the bank by making deposits therein and drawing vouchers thereon. It, therefore, seems clear to us that the county cannot now be heard to predicate any liability against the sureties for the City National Bank on the ground of such alleged default. But, conceding that appellee is correct in this contention, and that there was a default on the part of the City National Bank in November, 1920, and further conceding that, in the absence of an application of payments by the parties, the court would not be authorized to apply withdrawals made from the Security State Bank toward the liquidation of an obligation originally made by the City Bank and assumed by the Security Bank, still appellee’s case against the corporate sureties is not •strengthened.
In February, 1921, the Security State Bank was designated as the regular county depository, succeeding the American National Bank. Immediately thereafter all the funds of the county were deposited in said depository, including the funds which had gone into the City National Bank. The record does not show that actual cash was taken from the special account in the Security Bank and then delivered back in kind to the bank as a general depository, but the county was credited with the amount of the deposit on the books of its depository, which deposit was secured by a bond acceptable to the county. That transaction constituted a payment to the county depository of all the balance remaining of its special account. The county having' thus received such payment, it is unimportant as to whom the City National Bank delivered that fund.
 Further, the record discloses, upon a more careful examination thereof, that the parties themselves made application of the payments from the bank to the county. When the Security Bank became the general depository in February, 1921, all funds of the county were for a time placed in the same general account and vouchers drawn against such account. But, on April 22, 1921, a new account was opened in the depository, called the “Ed S. Pritchard special collection account.” Practically all of the deposits made by the county after that date were placed in that special account. ■ There were, after that date, two accounts, one being the general account, including the old money, and the other the special account, including only deposits made after April 22d. The county continued regularly to draw warrants against the bank, and these warrants were all charged against the old account. At the close of business on June 21st, this old account, which included the money originally deposited in the City National Bank, had been reduced to $5,412.36. On the following day more than $13,000 was drawn from said account, which would have more than wiped out all of said balance but for the fact that on that day the Ed S. Pritchard special collection account was transferred to this general account. Whether the transaction was made at the beginning or at the close of the business of June 22d does not appear, but it does conclusively appear that the limit of liability of all corporate sureties was- $5,412.36, and it also conclusively appeárs that the parties themselves made application of payments by charging the withdrawals against the oldest items. Since the parties so applied the payments, no application by the court is necessary, as courts make application of payments only when parties have failed to do so.
In a- supplemental argument filed by appellee it is contended that the Security State Bank & Trust Company was but a continuation of the City National Bank, having the same identity, and that the- corporate sureties were liable for funds deposited in said Security Bank under the holding of Cooper Grocery Co. v. Eppler (Tex. Civ. App.) 204 S. W. 338, and other similar cases cited by us in our original opinion. It may be well doubted whether a banking corporation organized under the laws of the state of Texas could ever be a mere continuation of identity of a national bank so as to render the sureties of the national bank liable for the default of the state bank. But, conceding for the sake of considering this contention, that 'this view is correct, still appellee’s case is not strengthened. If the Security Bank was but a continuation of the City Bank, then no default occurred when the funds were transferred from one, to the other, and the sureties were certainly discharged when the new depository was elected in February, 1921, and the funds for which the corporate sureties were liable were delivered to such new depository after the county had approved the new depository bond.
We believe that under no theory could any liability be predicated against the corporate sureties, and adhere to our original judgment in their favor.
In a very forceful argument the appellants Linz, Young, and Waggoner present that we erred in our original opinion in holding in effect that the law requires that the comptroller approve a depository bond. We have given careful consideration to the arguments advanced in support of this contention, but, based upon the authorities cited in our original opinion, and believing that the construction of article 2444, insisted upon by said appellants, gives no effect what*673ever to the provision therein contained with reference to the approval of bonds by the comptroller, we overrule this contention and adhere to our original holding.
It is also contended that in our original opinion we gave too narrow effect to the pleadings with reference to the approval of bond No. 3, and that we should render judgment in this court in favor of the sureties on bond No. 2, on the theory that, under ap-pellee’s pleadings, the ease should be considered as if the undisputed facts disclosed that the comptroller did approve such bond. We do not think this is a proper ease in which to render a judgment in favor of these sureties. The case was tried below on a theory of liability entirely different to the theory upon which our original opinion was based. The fact of the approval by the comptroller was not considered as a material fact. It is the established rule by our Supreme Court that a ease should be remanded rather than rendered, where it appears that same has not been fully developed or that justice will probably be better served by a remand. Even though there is no evidence whatever of probative value- supporting the judgment, it Is our duty to remand rather than to render, where justice may be better subserved thereby. Texas Employers’ Insurance Association v. Herring (Tex. Com. App.) 280 S. W. 740; Associated Oil Co. v. Hart (Tex. Com. App.) 277 S. W. 1043.
It is presented by appellants that our holding on the issue of the release of the sureties by a ■ change in contract between the county and the depository on July 12th is in conflict with the holding of the Supreme' Court in the case of Eastland County v. Chapman, 276 S. W. 654. We do not construe that opinion as deciding this question at all. In the instant case the trial court found that the bank did not change the county’s deposit from a secured to an unsecured account. That was the basis of the judgment of the Supreme Court in the case of Eastland County v. Chapman, supra. But, it is insisted that the depositing of more than $85,000 in an unsecured account after July 12th constituted a change of contract between the county and its depository. This contention is based upon the assumption that there was a contract between the county and its depository, whereby the county agreed to place all of its funds in this secured deposit. We do not think such a contract ever existed. The law, as it then exist-ed, required the county treasurer to deposit all funds in the depository bank, and any contract between the county and the depository, whereby it was agreed that the county treasurer would not obey the law, was clearly not a valid contract. But, regardless of the correctness of our view on the question of the legality of the contract, a further study of this question has convinced us that the defense of discharge of sureties by change of contract is not in this ease at all. The sureties did not guarantee the performance of any contract between the county and its depository. Their undertaking was to guarantee the acts and conduct of the depository, and not at all to insure the performance of any contract between the county and its depository.
 The appellants Smith, Hodges, and Dabney agree with our original holding that the county was not barred by an election of remedies, but insist that the county was barred by res adjudicata and equitable es-toppel by judicial admissions. We do not find the'elements of res adjudicata existing in this cause. The sureties were not parties to the original suit of Eastland County v. Chapman et al., supra, and the issues presented in this case were not there adjudicated against the county and in favor of the sureties. Neither do we find sufficient facts in the record to support au equitable estoppel. The county did make admissions in the former suit above referred to that its funds were in an .unsecured, noninterest-bearing deposit, but no such injury is shown by the record to have resulted to the sureties on account of such admissions as should estop the county in the instant case. As pointed out in the original opinion, it was impossible for the county authorities to determine the status of its funds at 'the time it instituted the original suit. It, therefore, presented two claims to the banking commissioner, one as a secured, and the other as an unsecured, depositor. We do not think that its efforts to enforce liability on the wrong one of these theories would constitute an equitable estoppel against it, releasing the parties who were actually liable, in the absence of a clear showing of injury.
A careful reconsideration of the entire ease, in the light of able motions for rehearing, has not convinced us that we erred in our original holdings herein, and all of the motions for rehearing will, therefore, be overruled.