Baker v. Ashe , 80 Tex. 356 ( 1891 )

This is a companion case to that of Seale v. Baker, reported in 70 Tex. 283, and of Giddings v. Baker, decided at a former day of this term. The appellee, a depositor in the City Bank of Houston, sued the appellants as directors, alleging that he had been induced by false representations made by the defendants to deposit moneys in the bank, which by reason of its insolvency had been lost. The allegations in the petition are substantially the same as those in the case of Seale v. Baker,supra 308.

We think there was error in the proceedings of the court below which requires a reversal of the judgment, and therefore in disposing of this appeal we will consider only such questions as may arise upon another trial.

It appeared during the course of the trial that when a receiver was appointed for the bank the plaintiff proved up his indebtedness against it, and that at the time of the trial he had received dividends amounting to 37 1/2 per cent of his claim; and there was evidence tending to show that the assets if properly administered would pay a large portion of the debt in addition to the dividends previously paid. Such being the evidence, the court instructed the jury that in the event they found for plaintiff the measure of his damages was the amount of the principal of his debt less the dividends paid him. Both parties assign this charge as error. The appellant contends, in effect, that the plaintiff was entitled to strict compensation of his loss only, and that this was properly measured by the amount of the deposit less the dividends paid, and also the value of the balance of the claim against the estate in the hands of the receiver. The appellee claims that he is entitled to interest upon the amount of his deposit as a part of his damages. We think the court erred, as is claimed by both appellants and the appellee in their respective assignments. The defendants, if they made themselves liable by reason of the alleged representations, did not make themselves liable as sureties or guarantors of the plaintiff's debt. They were wrongdoers and were liable only to make good his loss. That loss was the difference between the amount of his deposit and the value of his claim after the bank had closed its doors. Peck v. Derry, 21 Am. and Eng. Corp. Cases, 272; Whittier v. Collins, 15 R.I. 90. Consequently in our opinion the defendants were entitled to have the value of the claim subtracted from the amount of the deposit. A difficulty suggests itself: At what time ought the value of the claim against the bank to be assessed? In Peck v. Derry,supra, it is held that it ought to be assessed at the time the loss accrues, which in this case would be when the bank closed its doors. We think, however, when collections have been made, a more accurate and satisfactory measure of the damage is to deduct the payments and then the value of the claim at the time of the trial. The plaintiff's compensation will not be full without the allowance of interest, and we are of opinion that interest should be allowed as a part of the damages.

The appellants also present the following assignments of error:

7. The court erred in its general charge in instructing the jury that the defendants were liable "if, by their acts or by false representations generally, or to the plaintiff, to the effect that the bank was a sound financial institution, able to carry on and conduct the banking business, when in fact it was not, and was known to be by the directors, or ought to have been known to them, and would have been known to them had they exercised the care and diligence they could and should have exercised in reference to the affairs of such bank."

11. The court erred in giving the special charge No. 2 asked by the plaintiff, which declares the law to be that the plaintiff is entitled to the verdict, and that defendants are liable to him if they knowingly made, with intent to defraud the public generally, false representations of the solvency of the City Bank, without regard to whether plaintiff ever relied or acted upon such representations, and without regard to other facts, upon the existence of which the plaintiff's right to recovery was dependent.

12. The court erred in giving the special charge No. 5 asked by the plaintiff, to the effect that the law requires a verdict for the plaintiff if the defendants as directors of the City Bank made representations of the solvency of the bank while in a position to know the facts upon which plaintiff relied, without regard to whether the representations were false or not.

The charges were given as appellants complain in these assignments, and they are all erroneous as therein pointed out. But appellee insists that since the court gave other instructions in which the jury were distinctly told that plaintiff could not recover unless the representations were false, and unless he relied upon them and was induced thereby to deposit his money in the bank, the deficiency in the instructions complained of were cured, and therefore are not a ground for reversing the judgment.

It is a rule that in construing the instructions given by a court to a jury they will be taken as a whole, and one part may be looked to for the purpose of qualifying another. But does this rule apply when the jury are told in one instruction that if they find certain facts to exist they will find a verdict for the plaintiff, one of the facts necessary to a recovery being omitted, and when in another they are charged that the plaintiff can not recover unless the fact omitted in the previous charge be proved? We think not. Charges should be construed together and as correcting each other, and when not being contradictory both may stand together. But the instructions in this case are wholly irreconcilable. In one the jury are told in effect to find for the plaintiff although the alleged misrepresentations did not induce him to make the deposits in the bank; in another they are told that unless that fact be proved he can not recover. In one charge the jury are instructed in effect that the plaintiff may recover without reference to the truth or falsity of the representations, and in another they are told that he can not recover unless the representations be false. How are the jury to reconcile these contradictory charges? They are calculated at least to confuse; but perhaps the most serious objection to them is that they leave the jury free to follow either of the contradictory charges as their personal wishes or private feelings may dictate.

The defendants were entitled to an instruction that the plaintiff could not recover unless the representations were false, and unless he was induced thereby to make the deposit, without having their effect destroyed or meaning made doubtful by other instructions in which the jury were told in effect that the plaintiff might recover although these facts were not proved. A charge which instructs the jury to find for a plaintiff in the event they find certain facts proved by the evidence, and omits one of the facts essential to a recovery, is erroneous, and is not cured by a contradictory instruction given at the request of the other party which makes no direct reference to the erroneous charge. The erroneous charge ought to be withdrawn altogether or corrected by a qualification referring directly to it. Sullivan v. Railway, 88 Mo., 169.

The charge of the court complained of in appellant's ninth assignment of error, with reference to a certain deed in trust offered in evidence, was not applicable to any issue made in the case and was calculated to confuse the jury. It was proper to instruct the jury as to the purpose for which it was admitted in evidence. Giddings v. Baker, supra 308.

It was error to admit in evidence the testimony of D.C. Giddings as to the representations made to him by defendant Baker. These representations were not made to the plaintiff nor were they ever communicated to him. The only effect of the testimony was to prejudice the jury against Baker.

The defendants other than Baker complain of the action of the court in admitting in evidence against them the book and report of Bradstreet's Commercial Agency, and we are of the opinion that the testimony should not have been admitted. The book in giving the rating of the City Bank of Houston among other things contained a statement that it had a credit of $1,000,000. The statement was shown to have been made up by an agent of the publishers from all sources of information that were accessible to him, and it was also proved that the book was intended for the use of subscribers only. The plaintiff was not a subscriber, though he examined the book and read the statement in reference to the bank. The statement in the book of the Commercial Agency was not the representation of the defendants, and it was not made for the information of the plaintiff. For each of these reasons it should have been excluded. The appellee insists that the admission of the evidence if erroneous was harmless, but the fact that counsel insisted upon its admission, over the objection of defendants, indicates that at the time they considered that it would have a material influence upon the deliberations of the jury.

For the errors pointed out the judgment is reversed and the cause remanded.

Reversed and remanded.

Delivered March 24, 1891.