People's Guaranty State Bank of Tyler v. Castle ( 1920 )

The prayer of the application in this case is:

"To grant a temporary mandatory injunction commanding the defendants to pay the county treasurer of Smith county the remainder of the proceeds derived from the sale of the bonds."

And the application alleges that:

"The proceeds derived from the sale of the bonds at this time amounts to $95,000, which sum is now on deposit in the defendant bank to the credit of road district No. 6 of Smith county, Texas."

But, after hearing the application, answer, and the evidence, the trial judge decided, in point of fact, that the said bank was not holding the purchase price of the bonds on de posit to the credit of the road district, but owed a debt to the county commissioners' court which was contracted by the commissioners' court under the sale and delivery of the bonds to the First National Bank of Troup for par value and accrued interest to date of the delivery, and that the said debt was not yet due. The transaction as made by the hearing then rested purely in contract, and there is involved the question of the validity of the contract. Under the terms of the special road law authorizing the issuance of the road bonds an undoubted power existed on the part of the commissioners' court to sell the bonds and at the aggregate price sold. But under the further terms of the law it is expressly provided that:

"Such bonds shall be by said court sold to the highest bidder and best bidder for cash, either in whole or in parcels at not less than their par value." Section 16.

The only departure from the statute is in taking notes payable monthly instead of cash for all the purchase price of the bonds. It is clear, as a legal rule, that the First National Bank of Troup would be held, as a matter of law, to know that a sale and purchase of the bonds partly on credit or deferred installment payments was in violation of the law and consequently to that extent a void act. But it does not follow that the bank is in consequence of that fact entirely relieved of any liability to pay for the bonds. And if title to the bonds passed to the Troup bank on the contract of sale, then the subsequent sale to the Dallas bank is only the fruit of the contract available to the Troup bank, and not to the road district. The enforcement of the liability for the original purchase by the Troup bank is, in the circumstances, in the nature of enforcing the payment of a debt. There being no money actually on hand on deposit, an order to presently command the delivery of any money would not exist. The claim of the county being in the nature of a debt, and the money not being actually on deposit in the First National Bank of Troup, we do not think that the trial judge erred in holding that the temporary mandatory injunction should not issue in advance of a final hearing of the case. The appellate court will not ordinarily interfere with the exercise of discretion by a trial judge in respect to a temporary mandatory injunction in vacation, unless a right is clearly shown to exist to which recognition has not been properly accorded by the trial judge.

The judgment is affirmed.