Robinson, Receiver v. Dickey , 14 Tex. Civ. App. 70 ( 1896 )

Suit by W.T. Dickey against the State National Bank of Vernon and against T. Windsor Robinson, as receiver of the bank, for the cancellation of a contract whereby the plaintiff undertook to convey to the bank certain realty situated in the town of Vernon, Texas, and to recover possession of that realty, and also for the rescission of a contract whereby plaintiff acquired certain stock from the bank. From a judgment in favor of the plaintiff, the receiver appeals to this court.

The judgment appealed from imports a finding by the court, which we adopt, of the substantial truth of the plaintiff's allegations. These are as follows:

On December 19, 1893, the plaintiff, who was the owner of the realty in controversy, consisting of certain lots and parcels of land described in the petition and situate in the town of Vernon, Texas, executed and delivered a bond or contract, which was promptly recorded, whereby he undertook to convey this property to the defendant the State National Bank of Vernon, Texas, on terms as follows: 1. The transfer by the bank to the plaintiff Dickey of 68 shares of stock of the bank of the face value of $100 each, of which 53 shares were transferred on the execution and delivery of the bond, and 15 shares were to be transferred when Dickey paid to the bank $1000 in money, to be used by it in the construction of a two-story brick building upon a certain described portion of the realty in question. 2. The construction by the bank on the lot of land described of a two-story brick building, to cost not less than $3000, the first story to be built and occupied by it within twelve months after the execution of the bond. Dickey also bound himself to pay the further sum of $1000 to the bank, $500 when the foundation of the brick building should be laid, and the remainder during the further construction thereof.

The plaintiff was moved to the execution of this instrument and the purchase of the stock by the fact that he desired to secure the erection of the two-story brick building mentioned and the permanent location and operation of the bank on the property; by which means, realty of the plaintiff in the immediate vicinity would be greatly enhanced in value. He was further thereto influenced by the representations made to him by the president and cashier of the bank that it was solvent and that its stock was worth 100 cents on the dollar. The representations relied upon by the plaintiff were false, and he was without means of knowing the true condition of the bank's affairs, other than through the statements of its officers. These statements were made for the false and fraudulent purpose of procuring plaintiff to execute the bond in question, and of inducing him to purchase the shares of stock referred to, which if not then wholly worthless, was of much less than its face value.

Plaintiff has been at all times ready since the execution of the contract to comply with the conditions resting upon him. The defendant bank has in no sense complied with its obligation, except in the issuance and delivery to plaintiff of the 53 shares of stock referred to. It was insolvent at the date of the transaction, and has ever since so remained. It failed on August 18, 1894, and the appellant Robinson was appointed its receiver on September 30, 1894.

The bank took immediate possession of the property described in the bond for title, which was held by it and by the receiver until it was sequestrated by the plaintiff, who instituted this suit on January 9, 1895. On the trial and by his petition the 53 shares of bank stock were produced by the plaintiff and tendered in court for the receiver.

Opinion. — We are of opinion. 1. The plaintiff's petition presented a cause of action for the rescission of the contract in question, and for the restitution of the property. The defendants' demurrers were properly overruled.

2. If it be true, as contended by the appellant in his second assignment of error, that the stock at the date of the transaction was worth as much as fifty cents on the dollar, the plaintiff would yet be entitled to a rescission of the contract on tender of the stock itself, without being required to tender its value thus estimated. The false and fraudulent representations entitled him to relief in equity against the entire contract. Pruitt v. Trimble, 17 S.W. Rep., 356.

3. It is true that the judgment grants the prayer of the plaintiff for the rescission of the contract whereby the 53 shares of bank stock was acquired, and divests out of the plaintiff all interest and title claimed by him in these shares, which had been by the plaintiff produced, tendered and delivered into court, and directs that the clerk shall deliver the certificates of stock to the receiver on demand. We do not, however, understand that this judgment determines the question of liability on the part of the plaintiff for any assessment or charge to which he may be subject under the Federal statute. Revised Statutes, U.S., sec. 5151. Such an issue does not appear to be here litigated. Under the pleadings and the evidence as interpreted by the court, the plaintiff was entitled to a rescission of this contract, including that feature referring to the acquisition of the certificates of stock. The defendant is in no attitude to complain of the tender of the stock by the plaintiff, nor of the fact that the court enforced this tender. Florida Land Imp. Co. v. Merrill, 52 Fed. Rep., 77.

The judgment is affirmed. Affirmed.