dissenting.
I respectfully dissent. In my opinion this case was not ripe for summary judgment.
A certificate of deposit is a contract between the bank and its depositors. Its provisions determine the manner in which the funds may be withdrawn and is subject to the law of contracts. Ames v. Great Southern Bank, 672 S.W.2d 447, 449 (Tex.1984), Salazar v. San Benito Bank & Trust Co., 730 S.W.2d 21, 23 (Tex.App.Corpus Christi 1987 no writ). Texas Law imposes on contracting parties a duty to discharge the contract with “care, skill, expedience and faithfulness.” Bernard Johnson v. Continental Constructors, 630 S.W.2d 365, 368 (Tex.App.-Austin 1982 writ ref’d n.r.e.). A contracting party generally owes a common law duty to perform with ordinary care and skill whether it be a negligent omission or commission. Hideca Petroleum Corp. v. Tampimex Oil Int’l, 740 S.W.2d 838, 847 (Tex.App.-Houston [1st Dist.] 1987 n.w.h.).
The majority applies § 3.116 of the Texas Business and Commerce Code and the language on the back of the certificate to conclude Peoples Bank had a contracted for right to offset the certificate. I part with the majority in their failure to recognize the Bank’s common law duty of reasonable care when dealing with its customers despite the language of the code and the certificate. Reasonable care certainly does not mean a bank should inquire into every transaction which is drawn on an account written in the disjunctive, but it does mean where a bank has knowledge or should have knowledge of a special relationship which exists between its depositors that the bank should exercise some care in loaning money against that deposit.
Peoples Bank had nothing to lose and everything to gain by loaning money against the certificate. It’s evidenced by the times and amounts it loaned money. Five days after issuing the certificate the first of seven loans were made to AMS International, Inc.1 or Gibson,
(1) April 20, 1981 — Loan to AMS, principal amount $6,295.32, interest 16.25%, term one year;
(2) June 23, 1981 — Loan to Gibson, principal amount $25,088.32, interest 17.25%, term 90 days;
(3) September 21, 1981 — Loan to Gibson, principal amount $15,052, interest 17.50%, term 90 days;
(4) November 10, 1981 — Loan to AMS, principal amount $25,000, interest 17.25%, term 90 days, for renewal and extension of June 23, 1981 note;
(5) December 15, 1981 — Loan to AMS, principal amount $25,087.11, interest 17.50%, term 90 days, for renewal and extension of September 21, 1981 note for $15,000;
(6) February 4, 1982 — Loan to AMS, principal amount $70,000, interest 17.50%, term six months, for renewal and extension of November 10, 1981 and December 15, 1981 notes; and
(7) July 23, 1982 — Loan to AMS, principal amount $90,500, interest 19.50%, term due January 19, 1983, for renewal and extension of February 4, 1982 note for $70,-000.
Peoples Bank went about its business routinely extending the notes until the entire $100,000 certificate was pledged. Never did they notify the Blanchards of their or Gibson’s actions. The certificate was issued April 15, 1981 and was automatically renewed every 180 days. Had the Bank notified the Blanchards of Gibson’s loans at their first renewal, the Blanchards would have had the opportunity to cash the certificate and still have approximately $50,000 for themselves. Instead, the Bank proceeded without regard to the Blanchards’ interest. This was all done despite the Bank knowing the funds had been transferred from California where the Blanchards lived, a Bank officer’s knowledge of the source of the funds, the Bank’s prior business dealings with Gibson and their knowledge that the Gibsons had no assets to account for a $100,000 certificate. Additionally, all interest checks were mailed to the Blanchards in California and when one check was misplaced the bank sent the Blanchards an indemnity agreement which *269only they signed, all notices of renewal and IRS forms were mailed only to the Blanch-ards and when the Blanchards moved, th< Bank was informed by Gibson of their new address. Finally on December 2, 1982, th« Blanchards called the Bank to instrucl them to remove Gibson’s name from the certificate. The bank informed them it would be done and a copy of the certificate was sent to the Blanchards with Gibson’s name marked through it. The Bank issued the December interest check with Gibson’s name on it, but marked it out before sending it to the Blanchards. The January, February and March of 1983 interest checks reflected only the Blanchards names.
This conduct at least presents a question for the jury as to the ownership of the certificate. See Pan American Nat’l Bank v. Holiday Wines, 580 S.W.2d 7, 10 (Tex.Civ.App.-Houston [1st Dist.] 1979 writ ref’d n.r.e.). When Gibson’s name was marked off the certificate it created an ambiguity as to its ownership and when the certificate of deposit department of the Bank was willing to do so without hesitation, is conduct which could be construed as evidence of another agreement the parties had that is not evident on the face of the document. This reflects some notice on the Bank that it was aware actually or constructively of the trust character of the deposit which would prohibit the Bank from offsetting the depositor’s debt against funds held by the depositor in trust for another. Allied Bank West Loop, N.A. v. C.B.D. & Associates, Inc., 728 S.W.2d 49 (Tex.App.-Houston [1st Dist.] 1987 writ ref’d n.r.e.); National Indemnity Co. v. Spring Branch State Bank, 162 Tex. 521, 348 S.W.2d 528 (1961).
To me the conduct of Peoples Bank under these circumstances was not one of reasonable care. This was a mismanagement situation where the loan department did not know what the certificate of deposit department was doing or has done. The Bank should not be allowed to prosper by strictly reading § 3.116 and failing to recognize their duty of reasonable care with their customers. I would REVERSE the summary judgment and let the jury decide who owned the certificate and determine what the true agreement was between the Blanchards, Gibson and Peoples Bank.
. AMS is a company which Gibson and her husband are officers. Gibson personally guaranteed the loans of the company.