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(218 S.W.) the delivery of United States money or Ft. shown by the abstract. It appears from the Worth or other Texas exchange, at the Low-record Meador Bros. desired the deed to be den National Bank, El Paso, Texas.” The signed by Mrs. Taylor, which they were unprice stipulated was $1.50 per acre. The able to obtain, but accepted an affidavit from Meadors contracted to pay $1.50 upon the Taylor, dated February 28, 1902, to the efshowing of such abstract that the title was fect that there was no other legal claimant "without cloud defect," a total of to the land than himself. This affidavit was $6,676.50, less $49.14 taxes for year 1902 and made before Rudolph, who at that time was $22 for expense in surveying. The sum of county clerk, and on the next day, March $5,659.27 was to be remitted by exchange to 1st, he wrote a deed from J. W. Taylor to the Lowden National Bank of El Paso “to John Sparks, conveying the land contracted take up said deed," "and the sum of $968.60 to Meador Bros. February 15th. He testified shall be remitted by them to the said C. T. that he knew on that day Meador Bros. were Rudolph at Stratford, Texas, at the time of still investigating the title to the land. He remitting the first amount to the bank, less filed the deed from Taylor to Sparks for the first payment; $100.00, to be deducted record, and never notified Meador Bros. of from the said last-named amount.” The such deed. On March 7th Rudolph wrote $100 was paid by Meadors to bind the con- Meadors to hasten the consummation of the tract as stipulated therein.

transaction, asserting Taylor had a perfect On February 22, 1902, Rudolph inclosed title. After Meador Bros. became satisfied an abstract to the land in a letter to Mead- with the title and sent the money on the 10th or Bros., in which letter he states that Tay- of March to the Lowden National Bank, on lor's wife was sick in New Mexico, and that the 22d of March Rudolph, having learned of Taylor would not trouble her to sign the the remittance, wrote Meadors, demanding deed, but that if she lived and it was espe- his commission, saying: cially desired by them she would sign the

“Rather than have you trust me with the deed later, as she had theretofore signed amount advanced ahead of your getting the deed deeds to other sections when specially re- for it is ready to deliver to you and you can quested; that the land was not a home send me my part, then the bank can send your stead or joint property, but "wholly his and deed to you. I have wired them to do this." paid for by his money and deeded to him

On the 25th of March Meador Bros. wrote alone.” He also included a warranty deed Rudolph that this was all right, and they to the land for Taylor to sign, accompanying would send him the money just as soon as this with a letter from Rudolph to the Low- they received notice from the bank that the den National Bank, This deed and letter

deed was executed. On the 31st day of Rudolph instructed by his letter were to be March Rudolph wrote the Lowden bank with sent with the exchange to the bank. The letter to the bank by Rudolph bears date reference to the understanding between him February 25th, which advises that the in- Meador Bros. when the deed should be ex

and the Meadors, telling the bank to wire closed deed was to be executed by J. W. Tay-ecuted, and to hold it until the bank was nolor, and the inclosed draft for $5,659.27 to tified that his commission was paid. On be placed in the bank and to be transferred April 5, 1902, Rudolph wrote, excusing Tayto the account or order of J. W. Taylor up lor's delay in making the deed, and again on his executing the deed. "The deed you wrote to the same effect on the 17th of April. will then transmit at once either to Meador On the 18th of April, 1902, John Sparks, in Bros., St. Joe, Tex., or to me at Stratford, Reno, Nev., executed a deed from himself to Tex., for record, as the said Meador Bros. Meador Bros., conveying the seven sections may indicate, below on this page, as being of land, and on April 26, 1902, the Lowden their wish.” Meador Bros. indorsed on the National Bank wired Meador Bros.: letter, “Send deed to Meador Bros., St. Joe, Texas." The statement of facts contained

“Deed from Sparks here. When Rudolph says the following:

will surrender to you." "It is here admitted that Meador Bros., on Again, on April 28th, the bank wired: March 10, 1902, sent to the Lowden National Bank, El Paso, Tex., exchange for $5,659.27,

“Taylor deeded to Sparks; Sparks deeds to to be paid to J. W. Taylor upon his execution yoû. Both deeds sent you when Rudolph so inof the deed, and that the entries on the books

structs.” of said bank show that it received this exchange

Meador Bros. had not heard that Sparks on March 13, 1902.”

was connected with the land previous to reAt the time of sending the exchange to ceiving these wires, and had no actual nothe bank Meador. Bros. did not send the tice of the deed from Taylor to Sparks on $868.60 to Rudolph. During the interim be- record. Immediately the defendant wrote tween the execution of the contract of sale, Rudolph for an explanation, and then took February 15th and March 10th, Meador Bros. the train for Stratford, arriving there shorthad the abstract examined by attorneys, who ly after the 3d of May. Upon his arrival he gave a favorable opinion on the title as found that Taylor's wife had sued J. W. Tay

recover.

lor and John Sparks for the land, which had | wise.

The slip showed a deposit to my been instituted on May 3, 1902. The Mea- credit in the First National Bank of St. Joe, dor Bros. were finally made parties to the on same date, of $968.09, upon conditions not suit, and the litigation was long drawn out; subject to check." it being finally determined that the land was

After the deposit was made Meador Bros. the separate property of Mrs. Taylor and claimed the deposit was too much by $100, purchased with her separate funds; that and wrote Rudolph to send an order to the Meador Bros. were bona fide purchasers to bank to return to them the $100, which he the extent of the purchase money paid by did, and which the bank returned to the them prior to the notice of Mrs. Taylor's ti- Meadors on the order. When he learned the tle. Their interest in the land was decreed suit had been disposed of, he wrote to the to be in proportion to the amount sent to the bank that the case was settled. Thereupon Lowden National Bank, and that as to the he received a reply that the deposit had been $868.09 not paid and for which Rudolph here withdrawn by Meador Bros., in June, 1916; sues, in that proportion Mrs. Taylor should that the bank had turned the money over to

The equities were finally adjusted them on the advice of W. 0. Davis, but that in the courts by giving Meador Bros. about the bank had required Meador Bros. to es. six-sevenths and Mrs. Taylor one-seventh of

ecute an indemnity bond to protect against the land. The judgments and the report of

any claim that might be asserted by Rudolph. the case, when upon appeal, were introduced Rudolph testified that he did not consent to in evidence in this case. Sparks v. Taylor,

the withdrawal of the deposit. The appellee 99 Tex. 411, 90 S. W. 485, 6 L. R. A. (N. S.) Rudolph also introduced the deposition of 381, and Meador Bros. v. Mrs. Hines, 165 S. Bowers, cashier of the First National Bank of W.915. Upon reaching Stratford, appellant St. Joe, who testified that the money was de sought Rudolph for an explanation, and aft- posited in the bank to the credit of Rudolph, er ascertaining about the suit—and he testi- and held in his name as a special account fied that he had never heard of Sparks un until June, 1916, when it was withdrawn by til he received the telegrams—that Rudolph Meador Bros., upon the making of an affidathen showed him the docket of the entry of vit that the suit had been settled, and that the suit, and they agreed to let the matter they did not acquire title to the entire seren stand like it was until the suit was settled, sections of land, and also after Meador Bros. and agreed to leave the money in bank; Ru- had executed a bond of indemnity required dolph agreeing to wire the Lowden bank to hold everything up until it was settled. It by the bank. And he further testified: is inferable from the record that the wire,

“My best recollection in a general way, aided if sent, was sent too late to prevent the by our records, is as follows: That C. F. Rubank paying the draft.

dolph claimed a certain amount was due bim Rudolph testifies:

by Meador Bros. as commission on the sale or That on that occasion he demanded the sum purchase of some lands for or by them out sued for, and Meador demanded the $100 which West there, and there was a question as to had been paid him as earnest money. "He whether or not said Meadors had acquired full [Meador) said he did not know yet whether they title to the same, and that there was an agreewould agree to take the deeds and carry the ment between them that said Meador Bros. was deal through, or whether they would call it off, to and did deposit the sum of $868.09 in said but they would deposit this $868.09 or the mon- bank to await the determination of the fact of ey called for in the contract. I do not think title, and, in case it was decided that said at that time we discussed the amount or figures, Meador Bros. had acquired entire title to said but they would deposit it in the First Nation- land, said deposit was to be paid to said Rual Bank of St. Joe, Tex., to await the termina- dolph; otherwise to be returned to Meador tion of this suit against the title. He said they Bros.” would do that if they took the deed and carried the deal through. * He said he W. 0. Davis and S. D. Meador both testiwould deposit that money in the First Nation- fied there was a written agreement with Rual Bank of St. Joe, and it would be on deposit dolph as to making the deposit, and left with there pending the suit of Mrs. Taylor against the bank, but, as claimed by them, it had Taylor and Sparks, * and if they won the suit the money was to go to me, and if they been lost. The court excluded any testimony lost the suit the money was to go back to them.

as to its contents on the ground that it was A little later I got a deposit slip through the not sufficiently accounted for. T. S. Meador mail from the First National Bank at St. Joe." | died September 3, 1914.

Issue No. 1, submitted by the court, is as He here testified:

follows: That he did not have the deposit slip, but he "Was it the agreement by and between the supposed it was with the First National Bank of plaintiff, C. F. Rudolph, and the defendant S. Amarillo. “I borrowed some money from them D, Meador that the money deposited in the First (First National Bank of Amarillo), and left the National Bank of St. Joe, Tex., was deposited deposit slip with them, with a check on the upon the condition that, if the suit by Mrs. First National Bank of St. Joe, to hold as se- Taylor or Hines against Meador Bros. resulted curity until the settling of this suit, just an in favor of Meador Bros., said deposit was to additional security to what I gave them other- l be paid to said C. F. Rudolph?"

*

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(218 S.W.) The jury answered, “Yes." Issue No. 2 re- ! Bros., it was upon the deposit in the St. Joe quired the jury to answer if the agreement bank, and the wrongful appropriation of that for the deposit was made on the condition fund by them. Under the contract of Febthat the money was to be returned in case ruary 15, 1902, Meador Bros. were liable for they were not finally successful in maintain- no more than they agreed to pay for the land, ing a right to the entire seven sections of either to Taylor or Rudolph. They paid for land in the suit. The jury answered this all the land they got under the contract. The issue, "No." The other issues relate to the only ground of their recovery was that they question of Meador Bros. drawing out the had paid for six-sevenths of the land before money from the bank fraudulently, etc., they had notice of Mrs. Taylor's equitable which the jury determined in favor of the title. They were bona fide purchasers to that appellee that they did, and that it was the extent and no further. Their recovery did purpose and intent of Rudolph to forbear not rest on a legal and equitable title ob bringing suit for the money, and that the in- tained from Taylor under the contract, for tent of Meador Bros. was to forego the plea he had none, and he and his agent, Rudolph, of statute of limitation.

breached the contract in their failure to conThe first and second assignments are based vey a good and perfect title to Meador Bros., on the action of the court in overruling and and as a consequence they lost one-seventh in not sustaining the first and second special of the land in the suit of Taylor against exceptions to the petition, which are to the Sparks. This fraction so lost, and which is effect that it appears from the petition that set out in the petition, is exactly in proporthe defendants were residents of Montague tion to the purchase price as the amount not county, and that none of the exceptions to ex- paid for bears to the entire purchase price clusive venue were asserted; also that the for which Rudolph sues. There was there agreement of February 15, 1902, was abro-fore apparent upon the face of the pleading, gated by the subsequent agreement, which and conclusively shown by the evidence, a last agreement was not to be performed in total failure of consideration for the covenant Sherman county.

in the contract to pay Rudolph $868.09. The sixth assignment asserts that if plain. There was no breach on Meadors' part in tiff had any cause against the defendant it failing to send the money to Rudolph on the is for withdrawal of the deposit from the St. 10th day of March, at the time they sent the Joe bank, for which suit cannot be main- money to the Lowden bank. At that time tained in Sherman county. The court did Taylor had placed it beyond his power to connot submit an issue as to the plea of privi- vey the land to Meador Bros. He and Rulege further than as above noted. Upon the dolph, acting together, put the apparent return of the verdict the appellant moved | legal title in Sparks on March 1st and had that, upon the undisputed evidence and the the deed recorded. Meador Bros.' prospect findings of the jury, the judgment be ren- for title under the contract thereafter dedered, transferring the case to the district pended upon the contingency whether Sparks court of Montague county for trial. This the could or would convey the land to them. court refused to do, but rendered judgment Neither Taylor nor Rudolph were entitled at against the appellant for the amount sued that time to any sum. Afterwards Rudolph for, with interest, $1,030.15.

agreed, by letter, to wait for his part of the The appellant presents two propositions: money until Taylor executed the deed, and The first is:

until the bank should notify Meador Bros. “The deposit of that portion of the purchase On April 26th the bank notified Meador Bros. money going to C. F. Rudolph in the First Na- that Sparks had deeded to them. This new tional Bank of St. Joe, Tex., satisfied the con- situation, of which Meador knew nothing up tract, and substituted the liability of the bank to that time, demanded an explanation, and for that of T. S. and S. D. Meador, and there- before it could be had suit was filed by Mrs. after Rudolph had no lien upon the land, or any Taylor, and, as they then had ample notice cause of action upon which he could maintain of her equity, any part of the purchase money suit in Sherman county, even though it should paid after such notice would have been at be held that Meador Bros. collected the deposit their peril

. All these new complications arose before they could rightfully do so."

after the contract of February 15th, and The second proposition is:

were through no fault of Meadors.

[1-3] The change in the conditions and cir"The evidence failing to show either fraud or cumstances arising after the date of the conlack of good faith on the part of Meador Bros. tract demanded a new understanding or conin reference to the deposit in the First Nation

tract. al Bank of St. Joe, appellant's plea of privilege Bros. learned of this suit and called on him,

So Rudolph testifies when Meador should have been sustained, and this cause transferred to the district court of Montague Meador said he would put up the sum in the county for trial."

St. Joe bank, and that it would so remain

on deposit, pending the suit, and if they won If appellee, Rudolph, alleged or proved any this suit the money was to go to Rudolph, liability or cause of action against Meador and if they lost the money was to go to them.

The money was deposited in the bank in the | The old debt or contract was extinguished. name of Rudolph, and a deposit slip was fur- Wasson v. Davis, 34 Tex. on page 168. nished him, which he accepted and used as

“Novation is effected by the substitution of a collateral security with the First National new obligation, between the same parties, with Bank at Amarillo. Rudolph and Meador the intention to extinguish the old one; or Bros, recognized that this money as deposited by the substitution of a new debtor with the was subject to the order of Rudolph when intention to release the old one; or by the Meador Bros. requested an order to pay back substitution of a new creditor with the intent of the deposit $100, which had been made in to transfer the rights of the old one to him.” excess of the claim, and the bank recognized 95 S. W. 7; Pierce, etc., v. Woods, 180 S. W.

Gimbell & Son v. King, 43 Tex. Civ. App. 188, that right when it paid back the money on 1183; Elliotton Contracts, vol. 3, § 1867; the order. The bank further recognized 29 Cyc, 1130 et seq., 1137 ; R. C. L. vol. 20, Rudolph's right to hold the deposit as his p. 360, par. 1, Novation; American & Eng. debtor when they required an indemnity Enc. of Law, vol. 21 (2d Ed.) pp. 662, 663 (2, bond before they would pay the money to the 4), also pages 669, 670 (e, f, g). Meadors. The money remained in the bank for something like 14 years to the credit of

[4, 5] We believe this case presents a nova. Rudolph, and the jury found as a fact that tion if there was any original valid obligait was deposited under the agreement of tion to pay. It is not essential that assent to Rudolph and Meadors; that such money so

the acceptance of the terms of novation be deposited was upon the condition that, if the shown by express words, but the same may suit resulted in favor of Meador Bros., the be implied from the facts and circumstances money should be paid to Rudolph. This, we and the conduct of the parties. 20 Cyc. 1132. think, was a clear substitution of the latter Rudolph accepted the proposition to deposit agreement for the former, to pay Rudolph the money in the bank to his credit, and the the sum provided for in the contract of Febru- deposit was so made. Afterwards he accept

The ary 15, 1902, and was intended by all parties ed it by various dealings therewith. to abrogate the former undertaking. By the pleadings we think show that fact, and cerlast agreement the only question to be deter- tainly the uncontroverted evidence estabmined was whether Meador Bros. won their lished that he agreed to and accepted the desuit and recovered the land. In other words, posit, and the jury so found. The bank recRudolph and the Meadors recognized that ognized its obligation by issuing evidence of

its indebtedness. the agent could not recover his compensa

Meador Bros. placed the tion due him by Taylor out of the purchase money as agreed, and left it in the bank for money to be paid, unless it was determined the substitution of this new contract for the

14 years. There was ample consideration for by the court that the sale by Taylor under old, and we think its effect was to extinguir the contract vested the title in Meador Bros. the former obligation. If the appellee ha That was the issue to be tried, and when the any cause of action it was against the bank court settled the issue in the suit brought by to pay upon demand the amount of the de Mrs. Taylor, that determined to whom posit. Bank v. Greenville Bank, 84 Tex. 40, the money in the bank was ultimately to 19 S. W. 334. Or, if the bank paid the money be paid.

The bank took the money as a so deposited wrongfully to Meador Bros., apspecific deposit and for a specific purpose, pellee had a cause of action as upon converbut in doing so it did not keep such funds sion against both the bank and appellant, separate from the general funds, but was either jointly or severally, but the venue authorized to treat it as a general deposit would be in Montague county. Bank v. would be treated, which would create Jones, 18 Tex, 811; Bank v. Shannon, 159 the relation of debtor and creditor between S. W. 401. the bank and the party in whose name the We believe, under the uncertain and indefideposit is made, on the well-recognized prin- nite allegations of the petition, the trial ciple of law that the deposit is a debt owing court should have so interpreted the allegaby the bank to the party in whose name the tions as setting up a novation and should deposit is made. Morse on Banks and Bank- have sustained the exceptions heretofore set ing, 88 186, 205; Baker v. Kennedy, 53 Tex.out. Snipes v. Bomar, etc., 106 Tex. 183, 161 200; Bank v. Abernathy, 153 S. W. 349. On S. W. 1. Assuredly, we think under the unthe deposit of the money to Rudolph's credit disputed facts and the findings of the jury under the agreement and upon the accept the court should have granted appellant's ance by Rudolph, the relation of creditor motion for judgment changing the venue. and debtor was created between the bank and it will therefore be the order of this court himself, and relieved Meador Bros. from pay- that the judgment of the court below be reing the money again to Rudolph at Stratford versed and remanded, with instructions to under the original contract. Hubbard & the trial court to enter a judgment or order Gray v. Petty, 37 Tex. Civ. App. 453, 85 s. changing the venue from Sherman county to W. 509. By the agreement of all parties a Montague county, under the provisions of new debt was substituted for the old one. I the statute.

(218 S.W.) On Motion for Rehearing.

the bank and Rudolph-at least to some ex[6] The deposit in this case was not a spe acts of all the parties, had no control over

tent. Meadors, by the agreement and by the cial deposit in its restrictive sense and as de the deposit after it was made, under the fined by the authorities; that is, the thing deposited should be safely kept, and the agreement. There appears to have been no identical thing returned. It falls nearer un

agreement to keep it separate from other der the meaning of a special deposit, as de- money, but it was a deposit made as are genfined by Morse on Banking (5th Ed.) § 207, in

eral deposits for specific purposes. Whether which case the bank would be liable for the the fund so deposited shall be designated as

a special or a deposit for a specific purpose, return of the money to the depositor, or the party in whose name it was deposited, if paid trustee of such fund to hold the fund to await

or whether the bank shall be treated as a in violation of the contract between the par- the determination of the suit over the land, ties with reference to the deposit. Section 208. Hunter v. Wallace, 57 Tex. Civ. App. 1, it was nevertheless a new contract for pay

or treated as a debtor upon the contract, yet 121 S. W. 180. Again, that author ştates:

ing the amount claimed by Rudolph, the bank "It is the custom of banks, upon receiving by its contract agreeing to hold the fund in money for a specific purpose, as to pay a note, the name of Rudolph, and if the suit went in to mingle the funds with their own, and to favor of Meador for the land to pay it to pay the note at a proper time, just as they Rudolph. The bank recognized this liability would a check. The funds are not kept separate. There is no practical difference between

so to do by issuing a certificate of deposit. such deposit and a general deposit, and it seems Rudolph accepted this certificate as evidence clear that the bank should be held to the same of the amount due by Meador, and used it as liability as for a general deposit.” Section 210, an asset in obtaining credit with another citing, in the note, McLain v. Wallace, 103 Ind. bank, and the jury found he made such an 562, 5 N. E. 911.

agreement, and Meadors under that agree

ment placed the money in the bank. The This court has practically held to the same bank is clearly liable to Rudolph for the view in Young v. Bundy, 158 S. W. 566, and money if it paid the money in violation of its Bank v. Shannon, 159 8. W. 398, in which express contract with him. This transaction last case a writ of error was denied. It is evidences an entire merger of Meadors' origifrequently said to be a special deposit where nal obligation into the contract which was money is deposited for a specific purpose. subsequently made, and it is the contract However, we think it is generally held in upon which Rudolph must recover, if at all, such case a bank cannot permit money so de and in fact on which the jury and the court posited to be used or checked out for any below evidently decreed a recovery. His petiother purpose than the specific purpose for tion shows he had no vendor's lien because which it was deposited and accepted, or Taylor had none. Meadors paid for all the when the bank has notice of such purpose. I land they ever got. There was due Taylor no But as we read the authorities, it would be unpaid purchase money, and hence none was liable on the contract to pay when the condi- | due Rudolph. The uncontroverted evidence tions are fulfilled. It could not pay or per- and the findings by the jury establish the mit the deposit to be used for any other pur- substitution of a new obligation between Rupose. Unless there is an agreement to keep dolph and Meador to extinguish the old one, the deposit separate from the bank's funds, it and also the substitution of a new creditor or is customary to mingle it with those of the obligor on the new contract. We think it bank. In the absence of an agreement or di. cannot well be denied that the bank did asrection, it will be kept as a general deposit, sume an obligation to pay the inoney to whom with the same liability on the bank to the de- it was due, as determined by the result of positor. There may arise a different ques- the litigation, and a violation of the obligation where the rights of third parties are tion would render the bank liable to Rudolph. concerned, or where the bank becomes in. This being the contract upon which Rudolph solvent, or the like. The authorities on this was authorized to sue, we held that the venue question, as we read them, are not in ac. of the suit was in Montague county, the accord; but, for the purpose of this case, we knowledged and admitted residence of Menthink the deposit may be treated as creating dor. the relation of debtor and creditor between The motion will be overruled.

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