First Nat. Bank of Hughes Springs v. Sanford, 228 S.W. 650

First Nat. Bank of Hughes Springs v. Sanford

228 S.W. 650 | Tex. App. | 1920

Lead Opinion

The proposition in appellant's brief is as follows:

"A suit may be maintained and the venue is properly laid in the county of residence of either the drawer or drawee of a draft, where the drawee has accepted, or agreed to pay, either in writing or orally, said draft to a party cashing same upon the faith of said acceptance or promise to pay by drawee."

In support of the contention so presented appellant cites Henrietta National Bank v. State National Bank, 80 Tex. 648, 16 S.W. 321, 26 Am. St. Rep. 773, as holding that "a promise to accept a draft is tantamount to an acceptance"; Neumann v. Schroeder, 71 Tex. 81, 8 S.W. 632, as holding that "an oral promise to pay a draft is not within the statute of frauds"; Hull v. First Guaranty State Bank, 199 S.W. 1148, as holding that the "drawer and acceptor of a draft are jointly liable and suit thereon may be maintained in county of residence of either"; and Southern Creosoting Co. v. Chicago Alton Railroad Co., 205 S.W. 716 (a Missouri case), as holding that "the requirement of the Negotiable Instruments Act that an acceptance shall be in writing does not change the rule making an oral promise to accept valid and the acceptor jointly liable with the drawer to the payee." We do not doubt the correctness of the statement in the brief as to the holdings of the courts in the three cases first mentioned; but as we understand the opinion of the court in Southern Creosoting Co. v. Chicago Alton Railroad Co., the point appellant mentions as decided there was not before the court for decision and was not decided. The question in that case was as to whether certain letters written by the drawee of the draft in question should be construed to be an acceptance of the draft. The holding of the court was that they should be so construed.

The pertinent provisions of the Negotiable Instruments Act referred to (General Laws 1919, p. 190) are as follows:

"Sec. 132. The acceptance of a bill is a signification by the drawee of his assent to the order of the drawer. The acceptance must be in writing and signed by the drawee."

"Sec. 135. An unconditional promise in writing to accept a bill before it is drawn is deemed an actual acceptance in favor of every person who upon the faith thereof, receives the bill for value."

So far as we are advised the question as to the effect of the statute has not been directly determined by any of the appellate courts of this state, but we think the Supreme Court, in an opinion by Chief Justice Stayton in Neumann v. Schroeder, 71 Tex. 81, 8 S.W. 632, referred to above, clearly indicated how it should be decided, when, following, but criticizing the rule it regarded as established, to wit, that a verbal acceptance or promise to pay a check or bill of exchange was not within the statute of frauds, it said: *652

"If the Legislature be of the opinion that verbal acceptances or promises to pay bills of exchange and like instruments ought not to be sustained, a statute so declaring will doubtless be enacted; but, in the absence of such a statute, the courts are not authorized to depart from what seems to be the settled construction of the statute of frauds in order to reach what may seem to be an evil that another and * * * better construction would have reached."

But the question has been before the courts of several of the states, and in each instance has been determined to the contrary of what appellant thought the Missouri court held in the Creosoting Company's Case. Rambo v. Bank, 88 Kan. 257, 128 P. 183, by the Kansas court; Hanna v. McCrory, 19 N.M. 183, 141 P. 996, by the New Mexico court; Town Site Co. v. Drug Co., 20 N.M. 185, 147 P. 460, also by the New Mexico court; Ry. Co. v. Bank, 102 Va. 753, 47 S.E. 837, by the Virginia court: and Turnpike Co. v. Gooch, 113 Miss. 50, 73 So. 869, by the Mississippi court In disposing of the appeal in the first of the cases mentioned the court said:

"The drawee is not liable on the bill unless and until he accepts it. Section 134. Acceptance is the signification by the drawee of his assent to the order of the drawer, and acceptance must be in writing signed by the drawee. Section 139. Gen. Stat. 1909, §§ 5380, 5385. Section 134 relates to rights and duties, and not to form of remedy. It means that the drawee is not obligated to pay the holder unless and until he accepts, and the plaintiffs gain nothing by saying that they do not sue `on the bill.'

"Neither do they gain anything by saying that they ground their action upon equitable considerations, since equity must follow the law in all cases in which the Legislature has intervened and prescribed rules of law which govern the rights of the parties.

"`The established rule, although not of universal application, is that equity follows the law, or, as stated in Magniac v. Thompson, 15 How. 281, 299 (14 L. Ed. 696), "that, wherever the rights or the situation of parties are clearly defined and established by law, equity has no power to change or unsettle those rights or that situation, but in all such instances the maxim equitas sequitur legem is strictly applicable." * * * Courts of equity can no more disregard statutory and constitutional requirements and provisions than can courts of law. They are bound by positive provisions of a statute equally with courts of law, and, where the transaction or the contract is declared void because not in compliance with express statutory or constitutional provision, a court of equity cannot interpose to give validity to such transaction or contract, or any part thereof.' Hedges v. Dixon County, 150 U.S. 182,192, 14 S. Ct. 71, 37 L. Ed. 1044.

"The Negotiable Instruments Act entailed no hardship upon the plaintiffs, for they might have asked for a certified check, or might easily have obtained a lawful acceptance, and to permit them to recover on the theory proposed would loose again upon the business world the evils which the statute was designed to repress."

It is obvious, if the ruling made in the cases cited is correct, and we think it is, that appellant could not maintain its suit against appellee on the latter's verbal promise to accept or pay the drafts sued upon, that appellee therefore was not a proper party to the suit on the drafts, and hence that the trial court did not err when he sustained appellee's plea.

The judgment is affirmed.

Addendum

On Motion for Rehearing. The ground urged in the motion, to wit, that this court "erred," quoting, "in holding that the appellee bank was not estopped from setting up the statute of frauds, as the appellee bank acted in a way to mislead the appellant bank and cause it to advance money which it would not have done had not the appellee bank misled it," indicates that appellant misunderstood the opinion disposing of the appeal. This court did not undertake to determine that appellant could not, because of the statute of frauds or for any reason, maintain a suit against appellee in Wood county on its promise to repay to appellant money it paid to Sanford at appellee's request. This was not that kind of a suit, but was a suit on the drafts and against appellee as the acceptor thereof, and therefore such a question was not presented by the appeal. On the trial of the plea it was agreed that the fact was "that," quoting from the record, "the promise to pay set forth in plaintiff's petition and in plaintiff's controverting plea was an oral promise." That, in legal effect, when considered in connection with the pleadings of the parties, was an agreement by appellant that appellee was not a party to the contract evidenced by the drafts, and therefore not a proper party to its suit on the drafts. What this court held was in conformity to that *655 agreement, to wit, that appellee, not having accepted the drafts in writing, was not a party to same and therefore was not a proper party to appellant's suit on same, and hence could not, over its objection interposed in the way the statute points out, be sued on the drafts in Smith county, where it did not have a domicile and transact business, merely because the drawer of the drafts resided and was suable there.

We would not think it necessary to say more in disposing of the motion, but for the view of the question taken by Associate Justice HODGES in his dissenting opinion that, if the pleadings of the plaintiff show a defendant who resides in a county other than that in which the suit is brought to be a proper party thereto, they are conclusive of the fact that he is, in the absence of pleadings by him attacking the allegations of the plaintiff showing him to be such a party on the ground that they are false and made for the fraudulent purpose of sustaining jurisdiction the court in fact does not possess over his person. As we understand the rule, it is that the facts and not what the plaintiff alleges to be the facts, which are to be looked to in determining the question made by a plea of privilege. Bank v. Gates, 213 S.W. 720; Hilliard v. Wilson,76 Tex. 180, 13 S.W. 25; Bledsoe v. Barber, 220 S.W. 369. And when a defendant interposes such a plea in conformity to the requirements of the statute, I he is entitled as a matter of law to have the cause of action asserted against him transferred to the county where he resides for trial, unless the plaintiff by a controverting plea not only alleges, but by testimony proves, to the contrary. Vernon's Statutes, art. 1903, as amended April 2, 1917 (Vernon's Ann. Civ. St. Supp. 1918, art. 1903); Witt v. Stith, 212 S.W. 673.

The motion is overruled.