152 S.W. 832 | Tex. App. | 1912
Lead Opinion
The appellant, A. L. Sherk, brought suit against the First National Bank of Hereford and J. L. Fuqua. The petition of appellant in the first count is one of trespass to try title to lots 13, 14, and 15, block 10, of the town of Hereford. In the second count appellant alleges: That he and one James Stenek about September, 1908, entered into a partnership agreement under the firm name of Sherk & 'Stenek, in the town of Hereford, for the purpose of conducting a livery, feed, and sale stable. That it was
The appellees set up the deed of trust on said lots and other property to secure the indebtedness set out in appellant’s petition as owing by Stenek individually and by Stenek and O. E. Rood, praying that it be adjudged a prior lien over the asserted lien of appellant, etc.
The appellant introduced a warranty deed from J. F. Easterwood to A. L. Sherk and James Stenek, reciting a consideration of $6,000; $1,500 cash, and $4,500 evidenced by a promissory note conveying lots 13, 14, and 15,- block 10, original town of Hereford. This deed is dated September 9, 1908, and was filed for record March 11, 1910. Appellant also introduced a warranty deed from James Stenek to A. E. Sherk, to all of section No. 248, block M-6, Castro county, containing 661 acres of land, lots Nos. 13, 14, and 15, block 10, town of Hereford, and also said deed recited: “This deed conveys all of the stock of buggies, carriages and horses and stock of feed of every kind and character now owned by us and situated in the livery barn of Sherk & Stenek, in Hereford, Texas.” This instrument is dated the 21st day of March, 191Q, and filed for record the 22d day of March, 1910. The note for $4,500 by Sherk & Stenek to Easterwood was transferred by Easter-wood to the Western National Bank of Hereford, and by that bank turned over to appel-lee bank, and Sherk & Stenek executed their note to appellee bank for the sum of $4,615.-25, to pay off the original $4,500 note. Sherk testified he paid the note he and his partner executed to the appellee. He claims to have paid it out of proceeds derived from property he owned in Oklahoma. At the time that Stenek executed the deed of trust to secure appellee there was $3,686.55 due on the note executed to appellee for $4,615.25, which balance appellant testifies he paid out of his individual funds. The firm of Sherk & Stenek also borrowed $7,575.80 from the State Bank & Trust Company of Hereford, and before the execution of the deed of trust appellant testifies he paid on the $7,575.80 the sum of $2,000, and that he placed improvements on the lots to the value of $1,700. out of his own money, and that he paid the cash consideration of $1,500 out of his own money. By the deed from Stenek to Sherk, March 21, 1910, he got property of the partnership of the value, the lots, horses, buggies, etc., lowest estimate $6,220, and highest estimate $9,350. The section of land sold to appellant by Stenek named in the deed was estimated to be of value between $6,400 and $7,680. This land was the individual property .of Stenek, and, in addition to the property mentioned in the deed, Sherk got the notes belonging to the partnership of about $2,000. It is proper to state that the $2,000 claimed to have been paid by Sherk on the $7,575.80 note is not shown to have been paid out of appellant’s individual funds, but was paid in small amounts at various times, and it is not made certain that it was not paid out of the partnership fund before the deed of trust was executed. The appellant, in the trade between Stenek and himself, in the deed, agreed to assume all of the balance due on
The appellant, by various assignments, complains of the action of the court In instructing a verdict for appellees, on the ground that when the deed of trust was executed by Stenek to appellees the partnership of Sherk & Stenek was insolvent; that said firm owed appellant large sums of money, and he was entitled to a partner’s lien on said lots before outside debts were paid; and that, if appellees were entitled to recover anything, it was no more than the interest of James Stenek in the property after all the firm debts of Sherk. & Stenek were paid, and, as the debts were in excess of the property, the appellant took nothing by its deed of trust.
We conclude the court properly, under the undisputed- facts of this) case, instructed a verdict for the appellee, and that the case should be affirmed, and it is so ordered.
Rehearing
On Motion for Rehearing.
The statement in our former opinion that there was one note for the sum of $2,028 against the Castro county section of land, we find to have been an error. There appears to have been two notes for that amount against said land. In the former opinion, it appears that we said that the note for $4,500 was executed by Sherk & Stenek, to Easter-wood, and by him transferred to the Western National Bank of Hereford, which bank turned over said note to the appellee bank and for which Sherk & Stenek executed their note for $4,615.25 to appellee. This statement is inaccurate. The record shows the Western National Bank of Hereford purchased the vendor’s lien note for $4,500 from Easter-wood, and that Easterwood by a written transfer conveyed the note and vendor’s lien on the lots in question to the Western National Bank of Hereford, which the bank filed and placed of record. Stenek, acting for Sherk & Stenek, made arrangements with ap-pellee bank to borrow money sufficient to pay off the $4,500 vendor’s lien note and executed to the appellee bank the note for $4,615.25, signing the same Sherk & Stenek, by James Stenek. Fuqua, the president of the appellee bank, testified that Stenek drew his check on appellee in favor .of the Western National Bank of Hereford for the amount of $4,500 and interest, which his bank paid; that he knew nothing of the note further than that he understood the purpose in borrowing the money was to pay off the note held by the Western National Bank; that the note was brought by Stenek to the bank in an envelope with other papers, to be kept by the bank in safe-keeping; that the bank did not take an assignment of the vendor’s lien note and did not hold it as collateral or security for the $4,615.25 note, as at that time Sherk & Sten-ek were regarded good for that amount on their personal note. Appellee did not get the note from the Western National Bank of Hereford, but it was taken to appellee’s bank by Stenek with his other papers to be kept therein. G. A. F. Parker, the president of the Western National Bank of Hereford, testified that it was his recollection that his bank had been notified by appellee bank they would pay the $4,500 note, and his bank sent it over there in a clearance settlement, but he was not clear as to that — it may have been that James Stenek gave a cheek on the First National Bank in payment of this note. Parker testified he placed the following in-dorsement on the back of the vendor’s lien note for $4,500: “This note was paid March 20, 1909, to the Western National Bank of Hereford, but was not marked paid. It was taken up by the First National Bank of Hereford and at their request was marked, ‘Released by us, March 15, 1910.’ ” This witness states no one told him to put the indorsement on the back of the note; that he insisted on putting it thereon before he would release the land; that he knew there was some trouble ; and that he wanted to show why he did it. The appellant, Sherk, testified the Western National Bank bought the note for $4,500 from Easterwood, and that, “We (Sherk & Stenek) borrowed the money from the First National Bank to pay off the $4,500 to the Western National Bank.” The money which he paid the First National Bank was on the note for the sum of $4,615.25, payable to the appellee, and was the note upon which he got the money to pay off the $4,500 note. He further testified that Stenek paid the $4,500 note to the Western National Bank; that he was not present when the $4,615.25 note was executed or the money paid the Western National Bank. It was his understanding that appellee bought the $4,500 note from the Western National Bank, but it did not buy the vendor’s lien prior to the time Stenek executed the $4,615.25 note to appellee for the money. He does not state when or how he got such understanding or from whom he got it. Fuqua further testified that it was not the understanding that Stenek was to taken the money and pay off the vendor’s lien note to Easterwood and have it transferred to the appellee bank, and that it was not the understanding that Stenek was to bring the note to the bank of appellee and leave it there, and he was not asked to leave it there, but he did so voluntarily. Some time in February, 1910, the appellee demanded security from Sherk on the balance due on the $4,615.-25 note executed to the bank by Sherk & Stenek, which was not given. There is a dispute as to whether Fuqua at that time threatened to foreclose a vendor’s lien on the lots for the note then held by it. After
In the case of Wiggins v. Blackshear, 86 Tex. 665, 26 S. W. 939, Judge Stayton, speaking for the court, said: “When, however, the property of a partnership passes into the custody of a court for administration, as in cases of bankruptcy or assignments made by an insolvent firm, then the court will administer it as was the right of the several parties to have it administered while controlled by themselves. In such cases the court’s action is based as fully upon the rights of the partners as between themselves as upon the rights of creditors, and, when the result of a proceeding is to discharge partners from further liability, then the first theory before referred to may have been given weight in establishing an administrative rule in such cases.” The rule referred to is: “That the partnership property is presumed to have been obtained though credits given to the firm and that for this reason partnership creditors ought to be preferred in the distribution of its assets.” Further, in speaking of this case, 1;he court said: “In accordance with the general rule before stated, it has been steadily held that one partner may in good faith convey his interest in partnership assets to another, and that thereby all equities of such partner of all partnership creditors to subject such assets first to the payment of their claims is thereby lost. * * * It has been held that one member of an insolvent partnership, all of the members being insolvent, may transfer in good faith, with the concurrence of the other partners, his interest in the partnership property to an individual creditor, and that for this simple contract the creditor cannot maintain a bill to subject the property to the payment of a debt due to him by the firm. Case v. Beauregard, 99 U. S. 119 [25 L. Ed. 370]. As priority of right of
We are of the opinion that we were correct in affirming the case originally and find no grounds stated in the motion for rehearing sufficient to change our views as therein expressed.
We therefore overrule the motion.
Lead Opinion
The appellant, A. L. Sherk, brought suit against the First National Bank of Hereford and J. L. Fuqua. The petition of appellant in the first count is one of trespass to try title to lots 13, 14, and 15, block 10, of the town of Hereford. In the second count appellant alleges: That he and one James Stenek about September, 1908, entered into a partnership agreement under the firm name of Sherk Stenek, in the town of Hereford, for the purpose of conducting a livery, feed, and sale stable. That it was *833 mutually understood and agreed that each was to contribute one-half of all the money necessary. A. L. Sherk and James Stenek purchased from J. F. Easterwood the above lots on which was situated a barn, for the purpose of conducting said business. $6,000 was the agreed consideration for the lots. $1,500 cash was paid, which it is alleged plaintiff paid himself, and no part of which was paid by Stenek. For the remaining sum, $4,500, Sherk and Stenek executed their vendor's lien note, dated September 9, 1908, due six months after date, bearing interest at the rate of 10 per cent. from date until paid, which note plaintiff alleges he thereafter paid in full. That at the time of entering into said partnership he and Stenek borrowed from the First State Bank Trust Company of Hereford, $7,575.80, for which they executed their joint note with interest at 10 per cent. from maturity and which matured September 15, 1909. That appellant paid on said note $2,500 and has agreed to pay the balance, and that Stenek paid no part of said note and is released therefrom. That plaintiff placed $1,000 worth of improvements on said lots out of his individual funds. Appellant further alleges, in consideration of said improvements, and on account of said payments for Stenek and the assumption of the partnership indebtedness, that Stenek executed his warranty deed to all of said premises and improvements above described, dated March 21, 1910, conveying all of the interest Stenek had in said premises. Appellant further alleges on or about the 19th day of February the appellees filed for record and had recorded with the county clerk of Deaf Smith county a certain deed of trust on said lots 13, 14, and 15, block 10, original town of Hereford, to secure the payment of certain indebtedness due by said James Stenek to the appellee First National Bank, with appellee J. L. Fuqua as trustee named in said deed of trust; that the deed of trust was given to secure indebtedness evidenced by notes executed by James Stenek and by James Stenek and one O. E. Rood; that no part of said indebtedness was due or owing by appellant or by the partnership of Sherk Stenek; and that said firm at that time was insolvent. The appellant asked for title and possession of the lots, or, if that could not be decreed to him, that he have his judgment, fixing a partnership lien on Stenek's interest in said property and decreeing Sherk's said lien a prior lien to any lien of the appellees which they assert under said deed of trust. Appellant prayed that the partnership lien so found should be decreed to secure him in the payment of the sum of $7,287.90, together with all interest due thereon.
The appellees set up the deed of trust on said lots and other property to secure the indebtedness set out in appellant's petition as owing by Stenek individually and by Stenek and O. E. Rood, praying that it be adjudged a prior lien over the asserted lien of appellant, etc.
The appellant introduced a warranty deed from J. F. Easterwood to A. L. Sherk and James Stenek, reciting a consideration of $6,000; $1,500 cash, and $4,500 evidenced by a promissory note conveying lots 13, 14, and 15, block 10, original town of Hereford. This deed is dated September 9, 1908, and was filed for record March 11, 1910. Appellant also introduced a warranty deed from James Stenek to A. L. Sherk, to all of section No. 248, block M-6, Castro county, containing 661 acres of land, lots Nos. 13, 14, and 15, block 10, town of Hereford, and also said deed recited: "This deed conveys all of the stock of buggies, carriages and horses and stock of feed of every kind and character now owned by us and situated in the livery barn of Sherk Stenek, in Hereford, Texas." This instrument is dated the 21st day of March, 1910, and filed for record the 22d day of March, 1910. The note for $4,500 by Sherk Stenek to Easterwood was transferred by Easterwood to the Western National Bank of Hereford, and by that bank turned over to appellee bank, and Sherk Stenek executed their note to appellee bank for the sum of $4,615.25, to pay off the original $4,500 note. Sherk testified he paid the note he and his partner executed to the appellee. He claims to have paid it out of proceeds derived from property he owned in Oklahoma. At the time that Stenek executed the deed of trust to secure appellee there was $3,686.55 due on the note executed to appellee for $4,615.25, which balance appellant testifies he paid out of his individual funds. The firm of Sherk Stenek also borrowed $7,575.80 from the State Bank Trust Company of Hereford, and before the execution of the deed of trust appellant testifies he paid on the $7,575.80 the sum of $2,000, and that he placed improvements on the lots to the value of $1,700 out of his own money, and that he paid the cash consideration of $1,500 out of his own money. By the deed from Stenek to Sherk, March 21, 1910, he got property of the partnership of the value, the lots, horses, buggies, etc., lowest estimate $6,220, and highest estimate $9,350. The section of land sold to appellant by Stenek named in the deed was estimated to be of value between $6,400 and $7,680. This land was the individual property of Stenek, and, in addition to the property mentioned in the deed, Sherk got the notes belonging to the partnership of about $2,000. It is proper to state that the $2,000 claimed to have been paid by Sherk on the $7,575.80 note is not shown to have been paid out of appellant's individual funds, but was paid in small amounts at various times, and it is not made certain that it was not paid out of the partnership fund before the deed of trust was executed. The appellant, in the trade between Stenek and himself, in the deed, agreed to assume all of the balance due on *834 the partnership debt as well as the sum of $2,028, due on the section of land conveyed, and also the sum of $624, due the state of Texas, on said land. The deed of trust executed by Stenek to secure appellee bank is dated February 2, 1910, and was recorded February 18, 1910, and the amount so secured was about $4,000, which indebtedness due from Stenek to the bank individually is $231.82, and the balance due was owing by Stenek and O. E. Rood to the bank. The amount so secured was in no way a partnership indebtedness owing by the firm of Sherk Stenek. The deed of trust conveys lots 13, 14, and 15, block 10, in the town of Hereford, and section 248, block M-6, Castro county, the same property conveyed by Stenek to Sherk by deed, and also includes an additional lot, a quarter of block No. 3, Mabry's addition to the town of Hereford. It is admitted that the firm of Sherk Stenek, on the date of the deed of trust, and on the date of the trial, was insolvent, and that Stenek was a fugitive from the country. There is some conflict of testimony as to the amount of money originally put into the partnership by Stenek and the amount paid on the notes, and the question is made by the testimony as to whether the sums paid by Sherk were not out of partnership funds but out of individual means. The testimony also raises the issue as to whether the lots in fact were included as partnership property or were only held jointly by Stenek and Sherk under the deed to them. The trial court peremptorily instructed the jury that appellant had not made out his case and instructed a verdict for the appellees, giving to the jury the form of their verdict, which they rendered and returned into court, and upon which judgment was entered.
The appellant, by various assignments, complains of the action of the court in instructing a verdict for appellees, on the ground that when the deed of trust was executed by Stenek to appellees the partnership of Sherk Stenek was insolvent; that said firm owed appellant large sums of money, and he was entitled to a partner's lien on said lots before outside debts were paid; and that, if appellees were entitled to recover anything, it was no more than the interest of James Stenek in the property after all the firm debts of Sherk Stenek were paid, and, as the debts were in excess of the property, the appellant took nothing by its deed of trust.
A lien given by one partner on his interest in the partnership property to secure individual indebtedness is not invalid for that reason, even if the partnership is insolvent at the time. Wiggins v. Blackshear,
It may be said generally the right of the partner is in effect a right to share in the surplus left after discharging all the firm debts, including the reimbursement to the partner for advancements made by him in excess of his proportional share. Each partner has the right to require all the firm assets to be applied to the payment of the firm debts. But this right of a partner is property and can be sold and transferred. It is effectually sold and transferred by the sale and transfer of all the interest in the firm property whether to his partner or to a stranger. Such a sale and transfer dissolves the partnership and extinguishes the right the partners have in the property as partnership assets. The property is converted into the individual property of the purchaser, free from all the equities of the seller, even if the purchaser has, as a consideration for such purchase, agreed to pay the firm debts. Case v. Beauregard,
The deed of trust to the appellee by Stenek had been on record since February 18, 1910, up to the 21st day of March, 1910, when Sherk took conveyance of the property to himself. He cannot be heard to say he had no notice thereof; the law charges him with notice. If he desired to enforce a partnership lien of which the law and the rules of equity afforded him the remedy, if he would pursue them, he should have retained his relation to the partnership property as a partner. Appellant having elected to dissolve the partnership and take over all the property of the partnership in his individual right and in addition secured the title to the individual property of Stenek, it occurs to us that he ought not at this time be heard to urge that the quasi lien which he had on the date of the deed of trust, but which he has since waived, should be given preference over the express lien of the appellee, of which appellant was charged with notice, when he took over the property.
We conclude the court properly, under the undisputed facts of this case, instructed a verdict for the appellee, and that the case should be affirmed, and it is so ordered.
In appellant's motion for rehearing, he urges for the first time in this court that the trial court and that we were in error in not holding that he had a vendor's lien on the lots for the money paid by him in the discharge of the note to the appellee, for the sum of $4,615.25. It will be seen by his petition he alleges that he paid off the vendor's lien note for $4,500, payable to Easterwood and by him transferred to the Western National Bank. He only prays to have a partnership lien decreed and for general relief. The facts introduced and sworn to by appellant show that Sherk Stenek paid off that note with money obtained from appellee upon the note executed by Sherk Stenek. If appellant had a lien on the land, it was by virtue of the law and rules of subrogation. It has been said that subrogation is not a universal remedy for parties who have ?? their money. Before subrogation can be decreed, the facts on which it arises must be distinctly and appropriately alleged and shown, and the equity therefrom must plainly appear. Appellant should have plainly alleged the facts which gave him the right of subrogation and should have asked for such relief in his petition. Crow v. Fiddler,
We held in this case, in the opinion heretofore rendered, that the sale of Sherk Stenek dissolved the partnership and thereby extinguished the quasi lien of the partners in the partnership effects as such. We think we were correct, and the authorities there cited sustain the proposition, as well as many of the authorities cited by appellant in his motion for rehearing, especially the case of Johnston v. Standard Shoe Co.,
In the case of Wiggins v. Blackshear,
We are of the opinion that we were correct in affirming the case originally and find no grounds stated in the motion for rehearing sufficient to change our views as therein expressed.
We therefore overrule the motion.
