74 Tex. 457 | Tex. | 1889
The Traders National Bank of Fort Worth, Texas, brought suit on October 2, 1884, against Walker Fore, W. J. Morphy, R. M. Henderson, and appellant J. P. Smith, on a promissory note executed by the parties named for the sum of $7000, to the order of the Texas Investment Company, Limited, with 12 per cent interest from maturity and 10 per cent upon principal and interest if collected by law, and transferred by said Texas Investment Company to appellee.
Fore and Henderson, who were alleged to be a copartnership and whose names as such were signed to the note, pleaded non est factum and denied the authority of any person to sign the same for them.
The pleadings of appellant were extended but presented substantially the following defenses:
That he was an accommodation maker of the note, which fact was known to appellee when it received the same. That appellee when it received the note held'as collateral security for a debt of $12,500. due
In reply to the above defenses pleaded by Smith appellee alleged that it never took or in any manner held the stock or notes as set forth in appellant’s answer, and also alleged that the note sued on was in renewal of one formerly executed by the same parties. Appellee admitted that at the time of the execution of the note sued upon it held the stock of the Hew Mexico Land and Cattle Company to secure another debt then due it by said investment company for the sum of $12,500, evidenced by a note of June 22, 1884, due thirty days after date. That at the maturity of this note it was renewed by the investment company giving a note dated July 25, 1884, for $12,500, payable thirty days after date, with interest at twelve per cent, etc. That this note was not paid by the investment company or any other person. That after its maturity and the institution of this suit appellee sold said stock at public sale by its cashier, after giving notice, and purchased the same through its president. That it still held said stock and had received no payment of said indebtedness of $12,500 except by the said sale, and offered, if allowed by the court, to deliver said stock to appellant upon his payment of said $12,500.
There was evidence in support of the pleas of non est factum filed by Fore and Henderson and a finding in their favor. There Avas a verdict in favor of appellee against appellant and W. J. Morphy for the sum of $9623 principal and interest. Judgment Avas rendered thereon, from which appellant Smith appeals.
The proof on the trial was substantially as follows: The note as described in the petition being in evidence, appellant J. P. Smith testified that he signed the note sued upon, Avhich was in renewal of' a former note for same amount signed by same parties, dated either'April or May, 1884, being either a sixty or ninety days note; that the former note was. also payable to the Texas Investment Company, Limited; that he signed
H. 0. Edrington, the cashier, testified he remembered the transaction when the note sued upon was delivered to plaintiff; that it was a renewal of a former note, and if J. P. Smith or any of the makers were accommodation makers he had no knowledge of the fact at the time the note sued upon was given; when the note was received by the bank defendant Smith was not present; it was received July 22, 1884; that W. J. Morphy brought the note to the bank already signed and endorsed and took up the former note; that there was nothing said at that time about holding the stock as collateral for the note sued upon, as well as the $12,500; that he (witness) did not at said time or at any other time agree on the part of the bank to hold the stock as collateral for the note sued on or for the former note of $7000, and never knew of any such agreement being made by any one representing the bank, and that the bank held no collateral to secure either of said $7000 notes. Witness produced a deposit slip or memorandum made by him at the time of receiving the latter $7000 note, and stated that at the same time he received a note for $3300 signed by Fore, Morphy & Henderson, and both notes were entered on same slip, and he also received a note of Britton for $4000 as collateral for a $3300 note and a balance of another note; that these transactions occurred at the same time and at the cashier’s window, and that Boaz, the president of the bank, was present; that the handwriting filling blanks in note was that of the bookkeeper of Texas Investment Company, Limited; that the first knowledge he had that Smith was accommodation maker of the note was August 15, 1884, when Morphy told him at the time he wrote paper of that date.
W. J. Boaz, the president of plaintiff, testified that he was present when the note was received, and to substantially the same facts stated by Edrington; that he did not know Smith was accommodation maker;
Such is the testimony in support of and denying the alleged agreement. set up by defendant Smith between appellant and appellee at the time of the delivery of the note-to the latter.
In support of appellant’s plea that there was a material change made in the contract entered into at the time of the delivery of the note by an assignment of the collateral security to Edrington for the other debts and the sale of the same, and that the bank ceased to hold said collaterals as; agreed upon, appellant introduced in evidence the following paper:
“Fort Worth, Texas, August 15, 1884.
“ The Texas Investment Company, Limited, hereby assigns all surplus-collateral held by the Traders National Bank over and above the amount due said bank on discounts made for said Investment Company, Limited, to Edrington & Lewis and J. P. Smith to secure them pro rata on Texas-Investment Company, Limited, indorsements to Edrington & Lewis -for $5000, dated August 11,1884, and J. P. Smith’s and others’ accommodation endorsements for said Texas Investment Company, Limited, for $7000.
“H. C. Edrington is hereby authorized to realize on said collateral and apply as set forth aforesaid, and any surplus to be applied to Smith and Huffman’s note to said bank for $0500.
[Signed] “Texas Investment Company, Limited,
“W. J. Morphy, President.”
Edrington testified that this instrument was signed by Morphy for the-Texas Investment Company; that he gave notice that the New Mexico-Land and Cattle Company’s stock would be sold on March 6, 1885, and in accordance with this notice he sold to Boaz, the president of appelleebank, who was the highest bidder, said stock for the sum of $8000.
Smith testified that he never gave his consent to said instrument being made, and had no knowledge of its having been made for some time after.
Edrington stated that in the transaction of August 15,1884, he acted for the firm of Edrington & Lewis, a firm composed of witness and one Lewis,, and not for the bank. That none of the collaterals then held by the bank were ever turned over to him to dispose of under said agreement, but that the bank still retained possession and control of them; that the bank had nothing to do with the making of the instrument of August. 15, 1884.
Defendant Smith’s attorney then asked the witness if he, as cashier of plaintiff’s bank, did not make and file for plaintiff a sworn answer in a. certain garnishment proceeding wherein the National Bank of Jefferson
This was objected to by plaintiff because immaterial and not in contradiction of any evidence given by said witness. The court sustained the objection, and the defendant was not permitted in this connection to introduce the sworn answer of Bdrington made in the garnishment proceedings referred to, which it appears from the bill of exceptions was offered to contradict the witness’ statement that the bank had retained always possession and control of said stock after it was deposited with plaintiff, and to sustain defendant’s plea that said bank had delivered said stock to said Bdrington to sell under the agreement between him and the Texas Investment Company already in evidence.
This ruling of the court excluding the proffered evidence is assigned as error. The leading- purpose of the testimony offered was manifestly to impeach the witness by showing that he had made contradictory statements with respect to the control and possession by the bank of the shares of stock in the Rew Mexico Land and Cattle Company.
It is claimed by appellees that the stock held as collateral security was not property or effects subject to garnishment, and hence if the witness had answered to the writ of garnishment that the bank did not have any property or effects of the Texas Investment Company in its possession this would be no contradiction of his statement that it held the stock as collateral security. The statute, .however, does make such stock subject to garnishment. Rev. Stats., art. 208; Baker v. Wasson, 53 Texas, 156.
Until the passage of the Act of March 13, 1875 (Gen. Laws, 2d sess., p. 102), shares of stock in incorporated companies were not subject to execution and therefore not liable to garnishment. Price v. Brady, 21 Texas, 619.
The effect of the opinion cited has been destroyed by the act referred to, now substantially embraced in articles 208, 209, 210, Revised Statutes. Article 2297, taken from the same statute, also subjects such stock to execution in the same manner as other personal property. Independently of this, however, upon the plainest principles of the elementary rules of evidence regulating the examination of a witness, we think the testimony was admissible. Bdrington had testified that the bank still held the stock deposited with it by the Texas Investment Company to secure the note for $12,500; that none of the collaterals held by the bank were ever turned over to him to dispose of under the agreement of August 15, 1884; that it still retained possession and control of the same. His testimony was also distinct and emphatic to the effect that no such agreement /to hold the stock as collateral security for the note, as contended by appellant, was ever made,. His evidence related to and was destructive of
Again, Smith had alleged that the bank had in violation of its agreement parted with and ceased to hold this stock. The sworn answer of Edrington that the bank did not in August, 1884, have possession of any property or effects of the Texas Investment Company tended to sustain this averment. We are of opinion therefore that the evidence excluded should have been admitted, and that the court erred in sustaining the objections of the plaintiff thereto and that the error is such as requires a reversal of the judgment.
The remaining assignments specifying supposed defects in the charge .and error in refusing the special instruction requested by appellant require some notice.
The witness Edrjngton had testified that the note in suit was in renewal of a former note for same amount wdiich matured about July 10, 1884. That the bank never held any collateral security for the note sued upon. That the stock in the New Mexico Land and Cattle Company was held as collateral security for a note of 812,500 due plaintiff by the Texas Investment Company which matured July 25, 1884, and which ivas renewed for a like amount, to become due thirty days after date. The ■stock Avas still held to secure the debt. The price for wdiich the stock •sold, 88000, Avas credited on it.
Witness produced the certificates for 287 shares of said stock, being fourteen for tAventy shares each and one for seven shares. These certificates all bore date July 31, 1884, and Avere issued to and in the name of H. C. Edrington. Edrington testified that Avhen the bank first received the stock it was in one certificate. That some time in the latter part of July, 1884, W. J. Morphy, the president of the Texas Lrvestment Company, Limited, requested him if he could to find a purchaser for said stock, and that it was thought best to have it reissued in small certificates; that as cashier of the plaintiff he sent the certificáte to the Hanover National Bank of New York, correspondent of plaintiff, with request to forward to Boston, where the president of the company resided, and have the stock reissued, and if it could be done find a purchaser for it; that the stock Avas reissued, but no purchaser found, and stock was returned to Avitness, avIio called the attention of W. J. Boaz, the president ■of the plaintiff bank, to the fact that the stock Avas issued to Avitness Avithout stating to him as cashier. They were placed with the securities belonging to the bank and kept there, and were held in Avitness’s name for said bank and not otherwise."
Under the foregoing evidence, in connection with the proof first referred to in the opinion, the court charged among other things as follows: “If you believe from the evidence that said note was executed by the defendants, or either of them, without consideration and for the benefit simply of the Texas Investment Company, you will then inquire whether or not at or before the time of making of the note sued upon there was any agreement between the plaintiff and the investment company or either of the defendants that the plaintiff should hold as collateral security for the payment of said note any stock of the Hew Mexico Land and Cattle Company, and the burden is upon the defense to show by a preponderance of evidence that there was such an agreement; and unless you find from the evidence that there was such an agreement you will find for plaintiff the amount of the note sued upon, including interest as before directed and ten per cent on such amount, against all the defendants you may believe under the instructions given are liable on said note. If * * * the defendants or either of them signed the note sued on as accommodation makers, as. hereinbefore explained, and if you believe from the evidence that at the time of the delivery to the plaintiff of the note sued updn the plaintiff had in its possession the certificates of stock of the Hew Mexico Land and Cattle Company mentioned, * * * and that the same belonged to the investment company and was held by the plaintiff bank as collateral security for another debt due to the plaintiff by said .investment company; and if you believe from the evidence that at the time of the delivery of the note sued upon the plaintiff by its officers accepted said note and agreed with the defendants or either of them to hold said stock as collateral security for the note sued upon, and if you further believe that the plaintiff Avithout the consent of the defendant did permit or cause said stock to be surrendered- and other certificates issued to one H. C. Edrington for a different purpose than the security of the debts for the payment of Avhich it was so agreed that said stock should be held, then and in that event the defendants, if accommodation makers of said note and not consenting thereto, would be released, and you should find for them or such of them as you may believe from the evidence were in fact accommodation makers and avIio did not consent to such disposition of said stock.
The complaint made of this charge is that the jury were in effect told that if plaintiff agreed ivith defendant to hold the shares of the stock to secure the note and did not, this would be a violation of the contract and would release the sureties, instead of instructing them that the alteration of the agreement to hold the stock made by Edrington and the Texas Investment Company, assented to by the plaintiff, Avould release the makers of the note if knoivnto plaintiff to be accommodation makers, and it failed to submit the issue of an alteration of the agreement.
The special charge requested by appellant, after stating the defenses set up in his answer, Avas as follows:
“If you believe that the makers of the note sued on were such accommodation makers, and that this was knoivn to the cashier or president of the plaintiff bank at and before the bank received said note; and if you also further believe from the evidence that at and before said note was delivered to plaintiff it had the shares of stock as claimed by Smith, and that at and before Smith signed said note the plaintiff, through its cashier, agreed with Smith and the president of the Texas Investment Company, Limited, for said company to hold such shares also as security for the note sued upon, and after so doing, if it was done, the Texas Investment Company, Limited, by and through its president W. J. Morphy, made the instrument read in evidence to you dated 15th of August, A. D. 1884, without the knowledge or consent of Smith, and that after-wards H. C. Edrington, acting under said agreement and being cashier of said bank, possessed said shares of stock, sold or attempted to sell under said writing dated the 15th day of August, 1884, then and in that event you should find for the defendant Smith; but if you should not so find, then as to this branch of the case you Avill disregard said defense.”
It Avill be noticed that the jury Avere plainly and properly instructed that if they found that no such agreement to hold the stock as security
For the error mentioned under the first assignment in excluding the evidence offered by defendant, we think the judgment should be reversed and the cause remanded.
Reversed and remanded.
Adopted June 25, 1889.