American Bank of Commerce & Trust Co. v. Citizens' Guaranty State Bank of Lindale

WILLSON, C. J. (after stating the facts as above). We do not agree with the trial court in the conclusion he reached that the milling company could not have maintained a suit against the Lindale bank on the draft sued upon had it not assigned same to plaintiff in error, and therefore sustain the contention presented by plaintiff in error that that court erred (1) in his conclusions of law, (2) in rendering judgment -for Yarbrough, and (3) in refusing to render judgment tor it. We think the milling company could have maintained such a suit, and that the Lindale bank could not have defended on the ground that the money paid' it for the draft was obtained by the feed store by means of fraud practiced by the milling company on the merchants. Only the merchants who were defrauded could complain of that; and in a suit against the Lindale bank alone they could not have recovered back the amount of their checks on that ground, for it was not at fault in the matter. If the milling company, had it not assigned the draft, and sued on it, should not have been denied a recovery against the Lindale bank, because of the fraud it practiced on the merchants, certainly plaintiff in error should not for that reason have been denied the recovery it sought against that bank. The remedy available to the merchants, or their assignee, we think was a recovery (in a suit against the- proper parties) of damages for the fraud practiced on them. Plainly, we think, neither the merchants nor their as-signee were entitled, as the trial court determined they were, by intervening in this suit, in which only xilaintiff in error, the Dallas bank, and the Lindale bank were parties, to in effect rescind the contract between the Lindale bank, the milling company, and plaintiff in error evidenced by the draft and indorsement thereon sued upon, and to rescind the contracts between the merchants, the feed store, and the Lindale bank evidenced bjr the cheeks and the indorsements thereon, and so recover back from the bank money .the merchants paid to the feed store. The judgment will be reversed so far as it denied plaintiff in error a recovery against *347 the Lindale bank of the amount of the draft sued upon and awarded defendant in error Yarbrough a recovery of anything, and judgment will be here rendered in plaintiff in error’s favor against the Lindale bank for the amount of the draft. The judgment will be affirmed so far as it was in favor of the Dallas bank.