Wallace v. Davis

Hart, J., (after stating the facts). It appears from the record- that J. H. Wallace and F. L. Davis purchased an oil and gas lease to land in Union County, Arkansas, and took a deed therefor in their names, upon the agreement that the purchase price of said lease, which was $3,250, should be advanced and paid by F. L. Davis. It was agreed at the time that Wallace would pay to said Davis his one-half of the purchase price of said lease on the following Monday. This he failed to do, and never at any time paid any part of the purchase price of said lease. The lease was purchased by Wallace and Davis for the purpose of resale, and they were to share equally the profits or losses. On the 15th day of September, 1921, through a -bank at Monroe, Louisiana, Wallace forwarded to the National Bank of Commerce a draft drawn by the plaintiff on the defendant Davis in the sum of $900. Attached to this draft was an oil and gas lease to said land duly executed by Wallace. This lease appears to have been executed by Wallace on the theory of a sale of the gas and oil lease by him and Davis for a profit of $1,800, of which his share would be $900. According to the .finding of facts made by the chancellor, no such sale of the oil and gas lease owned by Wallace and Davis was made, and Davis only received $300 in the handling of the oil and gas lease. The chancellor properly held that Davis should account to Wallace for one-half of this amount. The chancellor also found that no part of the original consideration for the purchase price of the lease had been paid by Wallace to Davis according to the agreement. Under this state of facts, which is conceded to be supported by the evidence in the record, the -chancellor properly entered of record a decree in favor of Davis against Wallace for the part of the purchase money advanced by Davis to Wallace, after accounting to Wallace for his share of the profits made under the lease. The decree dismissing the complaint of -the plaintiff against the defendant -bank was also correct. As we have just seen, the defendant Davis did not owe the plaintiff anything. On the other hand, the plaintiff owed Davis. In this view of the matter, it did not make any difference that the bank wrongfully delivered the oil and gas lease attached to the draft to Davis without collecting the amount of the draft. In cases of this kind, even where the negligence of the”agent is established, it is a question of damages only; and the agent may show that, notwithstanding his fault, his principal suffered no damages. The agent may show that, if he had used the greatest diligence, the draft would not have been accepted or paid, because the person on whom'the draft was drawn did not owe his principal anything. This court has expressly held that, in cases of this sort, the collecting bank is liable only for the actual loss which results from its improper conduct or unauthorized acts. There must be an actual loss before any recovery can be had in such a case, and no recovery can be had for more than the actual loss sustained. Second National Bank of Baltimore, Maryland, v. Bank of Alma, 99 Ark. 386, 138 S. W. 432. It follows that the decree must be affirmed.