Court Opinion

ID: 3961280
Source: CourtListenerOpinion
Date Created: 2016-07-06 10:21:32.761097+00
Date Added: 2024-06-11T07:43:45.951303
License: Public Domain

By pertinent assignments of error and clear propositions, the plaintiff in error presents, in effect, the three points in view: (1) That the agreement between the Houston National Exchange Bank and the Guaranty State Bank of Dodge of loan and pledge of bills receivable to secure it was legally void and ineffective; (2) that there was no such delivery and retention of possession of the securities in question as to legally constitute it a valid pledge; (3) that the Houston National Exchange Bank or its assignees were not entitled to a preference upon the bills receivable, or the money collected from them, over the other creditors at the time of the closing of the doors of the Dodge bank.
In respect to the first point made, it is insisted that certain articles of the statute have specific application to the facts, and are decisive of the question presented. First, it appears that authority was given to contract to pledge the bank's bills receivable for the payment of the loan from the Houston National Exchange Bank, by the board of directors of the Guaranty State Bank of Dodge, at a regular meeting at which a written record of the proceedings was made upon the minutes. We think the terms of that resolution are broad enough to grant the power to the officers of the bank to contract the loan, and specific enough to cover the transaction involved in this suit. The resolution is within, and is not contrary to, the terms of article 530, Revised Statutes. Houston Nat. Ex. Bank v. Gregg Co. (Tex.Civ.App.) 202 S.W. 805. The subsequent resolution authorizing the pledge of securities to the War Finance Corporation for a loan to the bank did not operate to make void, especially in the facts of this case, the contract of loan and pledge with the Houston National Exchange Bank. The officers of the Guaranty State Bank of Dodge had authority, under the resolutions of the board of directors, to borrow money from each banking institution, and pledge collateral security therefor; and the latter resolution did not rescind the first resolution, nor undertake to annul or withdraw the authority conferred upon the officers of the bank. Article 530 does not, in terms nor by intention, forbid the directors to authorize the bank to borrow, and pledge collateral security therefor, from more than one banking institution. The authority conferred by the article is intended to be general, consistent with the legitimate business and limits of a banking institution, and when once expressly given to the bank officers, such authority will continue until expressly or impliedly revoked, or until the purpose for which it is to be exercised is effectively accomplished.
Next, as applied to the special facts of *Page 474 
this case, the contract of loan and pledge with the Houston bank would not be legally ineffective, it is thought, merely because the agreement contained no stipulation, as required by article 570, Revised Statutes, that the Commissioner of Insurance and Banking should have 30 days of grace in which to redeem the securities pledged. For the note in this case was due and payable in 30 days from its date of December 16, 1921. The commissioner took over the bank on January 6, 1922. Consequently, as a matter of law, he actually had, in the terms of the article, "a grace of 30 days after date of such possession," and "before such pledge or hypothecation shall have been actually foreclosed," in which "to redeem such securities so hypothecated or pledged by the payment of the amount due, as principal and interest, on the indebtedness." A contractual stipulation, in terms of the statute, could have accomplished no more.
Further, it is concluded that it cannot be held in this case, in view of the particular facts, that article 554, Revised Statutes, has application, in avoidance of the contract of loan and pledge. While the proof is quite clear that in December, 1921, the Dodge bank was struggling with serious financial difficulties, yet the evidence is conflicting as to whether or not the bank was at that time in a condition of solvency and good credit. There is involved in the judgment of the trial court the finding of fact that the bank was not in failing circumstances at the time of the agreement for the loan of $3.000, and the pledge of securities therefor. This court would be bound, on appeal, by the trial court's finding in that respect, such finding having evidence to support it. Especially so since the decision of the commissioner as to the fact of solvency or insolvency of the bank at the time he proceeded to take over its affairs was not final and conclusive, according to the terms of article 473, R.S., as it then read. And no separate question as to the personal liability of the officers of the bank in creating and assenting to such contract of loan and pledge is involved on this appeal, since the pleading of the plaintiff in error does not seek judgment against them personally on the debt charged to have been created. The article (554) seeks to impose personal liability upon the officers, for the recovery of which "suits" shall be specially brought against them. The plea in the instant case was merely in the nature of avoidance of the contract, and not by way of cross-action against the officers for the amount of the contract loan and pledge.
The second point stated in the propositions, as set out above, is entirely dependent upon the precise facts established and the legal effect attaching thereto. It appears that there was an actual delivery on December 16, 1921, to the Houston National Exchange Bank of the collection of the bills receivable of the Guaranty State Bank of Dodge. The delivery was made of all the bills receivable to enable the Houston bank to select therefrom bills suitable as collateral security to the value of $4,500. It was the intention of the officers of the Dodge bank that the Houston bank should retain the possession, and hold as a pledge, the bills selected to the value of $4,500, and it was the intention of the Houston bank to acquire and hold possession of them as a pledge. While a time was not fixed within which the Houston bank should make the selection of its securities and return the other bills, yet it was contemplated by the parties that a reasonable time should be given and allowed the Houston bank to examine and select its securities. In such facts, as far as stated, it is obvious that the Guaranty State Bank of Dodge had parted with the possession, and the Houston National Exchange Bank was in actual possession, of the bills receivable, and there remained only the formality of separating the bills to the extent of $4,500 to complete a pledge of them, taking its origin at that time. By the delivery of the bills receivable the Guaranty State Bank of Dodge had fulfilled its agreement for a pledge of them, and there remained nothing more for such bank to do under its agreement. The Houston National Exchange Bank, by its possession of the bills receivable, assumed control of them, and, legally, had all the privileges respecting them necessary to give the character of a pledge. The Houston National Exchange Bank could hold such possession of bills receivable to the value of $4,500 by way of collateral security for the loan of $3,000, already credited to the Guaranty State Bank of Dodge, in the character of a pledge against both the latter bank and its creditors. A valid objection would not exist, in the circumstances, against such rightful possession that the mere formality of separating the particular securities from the mass of bills receivable had not been complied with. A reasonable time was allowed, by the agreement of pledge, to the Houston National Exchange Bank within which to make separation of the securities in its possession, and such bank had a reasonable time to make such selection and separation. Therefore there existed in the Houston National Exchange Bank legal claim or right in the bills receivable to the value of $4,500, valid as well against third persons as against the pledgor, if made in good faith, as appears here. But it further appears that, pending the time of examination and before selection of securities, the president of the Dodge bank requested that all bills receivable be sent him to forward to the War Finance Corporation for examination and inspection, under a prearranged agreement to do so. The Houston bank sent all the bills receivable to the *Page 475 
president of the Dodge bank, with the understanding and upon condition that it was for the special and temporary purposes indicated, and that he would return them direct to the Houston bank, in the event the War Finance Corporation did not make the loan. The president of the Dodge bank received the securities under that agreement, and only for the purpose stated. Pending notice from the War Finance Corporation as to the day convenient for submission of the bills receivable for inspection, the president of the Dodge bank placed them in the vault of the bank for safe-keeping. Before the notice was received from the War Finance Corporation, the doors of the Dodge bank were closed, and the state commissioner took the bills receivable into his charge and control as assets of the Dodge bank. In these facts it is clear that the Houston National Exchange Bank was not in default in designating and setting apart bills receivable, to the value of $4,500, within a reasonable time. Consequently, the precise question is that of whether or not the redelivery of the bills receivable to the president of the Dodge bank, for the special and temporary purpose of permitting the War Finance Corporation to examine and inspect them, legally operates to deny to the Houston National Exchange Bank the privilege of a pledgee, or of an equitable lienholder of the securities. In the case of Bank v. Gregg County (Tex.Civ.App.) 202 S.W. 805, it was held by this court, through Justice Hodges, that the lending bank had an equitable lien, enforceable against the borrowing bank and its creditors, upon bills receivable agreed to be transmitted and delivered to the lending bank by the borrowing bank, but never sent to the former by the latter. The principle of that case has, we think, immediate application to the instant case, in authorizing the claim of an equitable lien on the bills receivable. It is to be observed that the defendants in error only assert a claim of an equitable lien. The mere fact that there was a necessity for selecting and separating the securities would not make void, in the circumstances, the equitable right and claim of the Houston National Exchange Bank in such securities. The Houston National Exchange Bank was not in default in making the selection and separation of the securities; and, under the undisputed facts, the right of the Houston National Exchange Bank to make the selection and separation of the securities was not divested out of it by the mere fact of redelivery of the same to the president of the Guaranty State Bank of Dodge for the special and temporary purposes indicated in the evidence. The evidence is conclusive that there was not a positive, unconditional redelivery of the possession of the securities to the president of the Guaranty State Bank of Dodge. By intention of the parties, the president of the Guaranty State Bank of Dodge was to be only a special bailee, temporarily, of the returned securities. In Casey v. Cavaroc, 96 U.S. 467, 24 L.Ed. 779, cases in point are reviewed. Quoting from that case:
"The pledgor may have the temporary possession of the pledge, as special bailee, without defeating the legal possession of the pledgee; but where the thing pledged has never been out of the pledgor's actual possession, but has always been subject to his disposal, by way of collection, sale, substitution or exchange, no pledge or privilege exists, as to third persons."
Under the facts, we think the Houston National Exchange Bank had an equitable lien on the securities in question to the value of $4,500, and taking its origin from the date of the actual delivery of the bills receivable on December 16, 1921. As assignees, the defendants in error can assert the rights of the Houston bank.
The third point stated in the propositions, as set out above, cannot, as we conclude, be sustained. The equitable lien held by the defendants in error is legally valid, as well against third persons as against the Guaranty State Bank of Dodge. The Commissioner of Insurance and Banking, in the nature of a receiver, does not represent the bank alone; he represents all the parties. He represents the law, which takes charge of the property for the benefit of all creditors, according to their respective and mutual rights. He holds the same property taken over by him, subject to the same equities as the debtor bank held it, and any transaction which would be binding on the latter would be binding on the commissioner, as receiver appointed by the law. As the Houston National Exchange Bank could, as against the Guaranty State Bank of Dodge, had it not been taken over by the commissioner, have laid its hands on the securities in question, and claimed them in virtue of the contract of pledge, the commissioner, having no higher legal right than the pledging bank, could interpose no legal objection to the claim of the Houston National Exchange Bank. The right of the Houston National Exchange Bank, or its assignees, to make the particular selection of securities, to the value of $4,500, continued to the time the commissioner took charge, and to the time of the trial of this case, not having legally lost such right in this case. It can be assumed that the securities, reduced to money, would have been selected, and that the trial court, in awarding a preference claim on the assets, so found.
The right of the defendants in error to make the selection, as against the commissioner, would not be defeated by article 5655, R.S., as claimed by plaintiff in error, because that article does not have application to this case. That article, as is manifest, relates only to written instruments intended to operate as a mortgage or lien upon *Page 476 
personal property, and has no application to parol contracts such as that upon which this suit is based. And further, the lien given by article 487 to the state for the benefit of the depositors' guaranty fund does not attach and become fixed until "such bank or trust company is legally closed." The lien of the state attaches, by the terms of the article, to "all the property and assets then in possession of such bank or trust company," meaning all the property and assets then rightfully in possession of the bank. If the assets were not, as here, to the extent of $4,500, rightfully in the possession of the bank at the time it was legally closed, the lien of the state would not attach thereto in preference to the creditor entitled to actual possession of them under a prior pledge thereof.
The remaining proposition, in view of the evidence, will be overruled. The evidence does not show that among the bills receivable submitted to the Houston bank were renewals, the originals of which had not been surrendered to the makers, and, even so, the pledge would not be ineffective as to void bills, no fraudulent act intended, as here appearing.
The judgment is affirmed.