293 S.W. 613 | Tex. App. | 1927
The court gave the defendants' and refused the plaintiff's requested peremptory instruction. Error is assigned upon the two rulings. Thus there are presented for our consideration the two questions: (1) Do the facts show an undertaking upon which a right of action could arise in favor of the plaintiff? and (2) If so, does the proof show such undertaking to be obligatory of performance, or not, upon the defendants? Each of these propositions is denied by the defendants. And it is of legal requirement that they both must be sustained by the proof in order to entitle the plaintiff bank to recover.
In the facts before us the note for $10,000 was signed by the makers and drawn "payable to the order of the Guaranty State Bank of Texarkana, Tex."; the latter by its cashier indorsed it "without recourse" and delivered it to the National City Bank, which passed the proceeds less the discount upon its books as a credit in the name of the payee bank. And we can assume for present purposes, from the standpoint of a peremptory instruction, the full fact to be that there was delivery and acceptance of the note at its inception, in the name of the Guaranty State Bank, and for its use and benefit as the true holder and payee, by the bank's officers. Then the note so drawn and discounted would be regarded as entirely and strictly within the class or description of notes covered by the terms of the guaranty, as being a note taken and held by the Guaranty State Bank as its property, and then "discounted for" the said bank by the plaintiff bank. As may be seen, the guaranty was an absolute, unconditional undertaking on the part of the guarantors, expressly stating the purpose and intentions of the guarantors to be to "guarantee" direct to the plaintiff bank "the prompt payment" of "all notes," acceptances, and other paper which have been or may be discounted for the said debtor (the Guaranty State Bank) by said bank (the plaintiff)," irrespective of "whether the same be made, drawn, accepted, or indorsed by the said Guaranty State Bank. The terms of guaranty would include, and not exclude, a note transferred for discount "without recourse." And it is immaterial that the note was offered for discount and was discounted as a single transaction and at a date subsequent to the time of the execution and delivery of the guaranty. As plainly expressed in the instrument, it was —
"intended to be and is a continuing guaranty, and shall apply to and cover all loans and discounts and renewals so made by said bank (the plaintiff) prior to notice in writing given to the cashier of said bank at the office of said bank by one of the undersigned that he will not be liable upon any such loans or discounts made by such bank after the receipt of such written notice."
The parties do not disagree that the written guaranty is legally classed as a continuing one. Gardner v. Watson,
There remains to be considered the question of whether or not the undertaking of guaranty was obligatory of performance in the circumstances. The guarantors insist that it was not because the transfer of the note by the officers of the bank was ultra vires, and void by positive provision of law, and the terms of the guaranty include only notes lawfully transferred for rediscount. As bearing upon this question, the full fact was shown that the board of directors of the Guaranty State Bank did not at the time authorize or consent to, by written record, the transfer, sale, or rediscount of the note. The directors, except two of them, were ignorant of the entire transaction until November 24, 1923, which was a time subsequent to the actual rediscount, but a time when the money remained to the credit of the Guaranty State Bank on the books of plaintiff bank. The statute expressly declares that "no officer or employee" of a state bank "shall have power to indorse, sell, pledge or hypothecate any note, bond or other obligation received by such corporation for money loaned, until such power and authority shall have been given such officer or employee by the board of directors in a regular meeting of the board, a written record of which proceeding shall have first been made upon the minutes of the corporation." Article 499, R.S. 1925. Also, "no bills shall ever be rediscounted by such bank [officers], except with the consent of the board of directors. Said consent to be a matter of record." Article 528, R.S. And undoubtedly the Guaranty State Bank in view of such facts and the law, were it a party to a suit based alone on the note, might successfully plead excess or lack of authority of its officers to transfer and rediscount the note. Hull v. Guaranty State Bank (Tex.Civ.App.) *618
A guaranty of the kind in suit is, in legal significance, a collateral and secondary contract, to be answerable for the payment of some debt of another person, who himself remains liable for his default. It is not a contract, as of suretyship, primary and direct. In the present case, in no wise is legal liability on such debt on the part of the Guaranty State Bank a prerequisite to liability of the guarantors to the guarantee; and it is conclusive that the makers of the note in the present case remain liable for the note, not-withstanding there was an invalid transfer by the officers of the bank as against the bank itself. The makers' promise to pay, and to pay when due, is not affected in any wise with the exceeded authority of the bank officers to transfer the note for rediscount for the bank. It has nothing to do with the consideration or the promise to pay. And the note, for reasons inherent in itself, was not legally void and unenforceable against the makers, who stood first bound to pay it. It was in all respects a valid and legal note, which was genuinely executed by the makers, and did not belong to a class reprobated by public policy, or in violation of positive law, or against morality. As firmly settled, it is only where the note or contract is void for illegality, in fact or declared so by terms of law read into it, that the guaranty must fall with it, because the court will not enforce a guaranty upon a note or contract where the contract or note itself ought not to be enforced against any one. Howard v. Smith,
The law will not lend its support to a claim founded upon its violation. Shelton v. Marshall,
We are therefore forced to look to the purposes and meaning of the guaranty as the parties might fairly and reasonably be expected mutually to understand. Cooper Gro. Co. v. Eppler (Tex.Civ.App.)
The liability of the guarantors is to be measured by their agreement, and is not to be extended by construction. The extent of their obligation must be determined from the language used. And clearly the language used cannot be said to express or to imply intention of both parties that the obligation of guaranty should be defeated by invalid transfer of notes. The language does not even purport to cover only notes that are "lawfully transferred and discounted." On the contrary, the language used expresses the mutual purpose and intention to have the guaranty cover generally, without exception or qualification, "all notes" offered by the Guaranty State Bank "for discount." Simply adding the words, "lawfully transferred for discount," would have sufficiently disclosed such intention and purposes. The extent of the obligation not being in the least doubtful, the parties are presumed to have known the terms of the statute and to have bound themselves with reference thereto. 6 R.C.L. p. 855; Haugen v. Sundseth,
Having disposed of the two legal questions so vitally important in this case, we come now to consider whether or not any question of fact arises for decision primarily by the jury. After much deliberation we conclude that, upon considering the evidence to the extent it will bear, the court would not be authorized to say, as a pure matter of law, that it was the purpose and intention of all the parties to take and accept the note in the name of the Guaranty State Bank as lender of the money, and that it was not made payable to the National City Bank as lender by name of Guaranty State Bank as a mere formality. The evidence appears to differ as to which, and it is a decisive fact for ascertainment.
According to the evidence of the president of the plaintiff bank, the note was purely taken and accepted by the officers of the Guaranty State Bank as the lender, made payable to it as an act of the officers, and by the cashier transferred in the name of the bank to plaintiff bank for discount for the said payee bank. Such fact, if so found by the jury, would be regarded, in view of other circumstances, as a sufficient recognition or adoption of the note by the said bank to render it binding upon all the parties. But the evidence of the cashier of the Guaranty State Bank leaves it to be inferred that it was understood by all parties that he was acting for Mr. Taylor to secure a loan direct from the National City Bank, and that the note was made and taken in the form done as a formality; that the Guaranty *620 State Bank was not to be the lender or owner, or to advance money thereon. He said:
"In dealing with Mr. Edwards I was not acting on behalf of the bank, but altogether for Roy Taylor, as we had done in a number of instances. We made the note in the form of the Guaranty State Bank rather than making it direct to the National City Bank that it might have the security of Mr. Taylor's real estate, which our bank held. It was my idea and Mr. Edwards' belief that to do it that way would give them (the National City Bank) a lien along with the Guaranty State Bank in the mortgaged real estate. It was discussed from that standpoint. I did not do that in settlement of any indebtedness Roy Taylor owed our bank. The note never was in our bank, and Mr. Roy Taylor never was indebted to our bank on that note. * * * I have had various personal dealings with Mr. Edwards previous to this November, 1923. * * * It would be impossible for me to remember definitely about how many loans had been negotiated by us of this kind from Mr. Edwards' bank on behalf of Mr. Taylor."
However this evidence or the testimony as a whole may be regarded, an issue would arise primarily for the jury. The parties cannot, by any arrangement among themselves, affect the rights of the guarantors. Estoppel may be predicated against the Guaranty State Bank on such arrangement, if true, but not so against the guarantors, as in effect a legal fraud against them. If the note was not in fact the note of the Guaranty State Bank, then it was not within the undertaking of guaranty; otherwise it was, and the guarantors would be liable in this suit.
There is no other issuable fact presented in this record.
The judgment is accordingly reversed, and the case remanded for trial in accordance with this opinion.