First Nat. Bank of Tulsa v. Hoover

244 S.W. 1044, 1922 Tex. App. LEXIS 1351
CourtCourt of Appeals of Texas
DecidedNovember 15, 1922
DocketNo. 2030.
StatusPublished
Cited by3 cases

This text of 244 S.W. 1044 (First Nat. Bank of Tulsa v. Hoover) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
First Nat. Bank of Tulsa v. Hoover, 244 S.W. 1044, 1922 Tex. App. LEXIS 1351 (Tex. Ct. App. 1922).

Opinion

HALL, J.

The appellant bank filed this suit in the district court of Hemphill county, against T. V. Ellzey and H. E. Hoover, alleging that on or about the 15th- day of April, 1920, Ellzey executed two notes for $5,000 each, due August 1, 1920, three notes for $5,000, due October 1, 1920, one note for $3,300, due October 1, 1920, and one note for $2,500, due October 1, 1920, all payable to the Union National Bank of Tulsa. Okl. That at the same time he executed a chattel mortgage for the purpose of securing said notes, conveying 3S0 white-face cows, 150 white-face calves, and three bulls, which said mortgage contained the following clauses and stipulations:

“With interest thereon at the rate of ten per cent, per annum from maturity according to the terms of renewal or extension- of said notes, which may be made by consent of said second party, and may be evidenced by the execution of new note or notes in place of said original note, at or after maturity • for the amount of the debt then unpaid, and- payable hereunder, and for which this mortgage is and shall be a continuing security until paid, whether said debt be evidenced by said original notes above described or any renewals or extensions thereof.”
“It is further understood and agreed that this mortgage and all rights, privileges and powers therein vested in the party of the second part shall inure to and be exercised by any subsequent owner or holder of the notes secured hereby and that the same shall be binding upon the personal representatives, successors or assigns of the parties hereto.”

It is further alleged that the mortgage was filed in the office of the county clerk of Hemphill county, April 19, 1920, was duly registered, and is still of record and in force; that in accordance with the terms of said mortgage, on the 22d day of November, 1920, defendant Ellzey executed a new note for the sum of $942.48, due January 1, 1921, which new note was a renewal and extension of the remainder of the indebtedness evidenced by the series of original notes theretofore executed; that prior to the date of the execution of said renewal note all of 'the cattle covered by the mortgage and securing said indebtedness, except 50 head of white-face calves, had been sold and applied on the indebtedness, and the said 50 head of calves were all the security left to secure said renewal note ;* that the defendant H. E. Hoover purchased from the defendant Ell-zey said remaining head of calves and as part of the consideration assumed the payment of the remainder of said indebtedness; that the said Hoover is in possession of the cattle, claiming title to the same and holding the same on his ranch in Hemphill county; that plaintiff, the First National Bank of Tulsa, Okl., had by a transfer in due course become the legal and equitable owner and holder of said renewal note and indebtedness; that the defendants became bound and liable to pay plaintiff said sum of money evidenced by said, promissory note, together with interest and attorney’s fees, but though often demanded and requested defendants have- failed and refused, etc. The prayer is that plaintiff have judgment for its debt, interest, attorney’s foes and costs of suit, for foreclosure of the chattel mortgage, for the sale of the 50 calves, and for all such other and further remedies and relief, general and special, in law and in equity, to which it may show itself justly entitled, etc.

Ellzey filed no answer and there was judgment against him by default. Hoover answered by general demurrer, special exceptions, general denial, and specially denied that he assumed the remainder of the indebtedness described in plaintiff’s petition, or that he ever in any way agreed or became bound to pay the same or any part thereof, or the note or any part of the note mentioned by plaintiff. He alleged further that long prior to the date of the execution and delivery of said note and mortgage on November 22, 1920, he had purchased from Ell-zey, with the knowledge and consent of the mortgagee, the Union National Bank of Tulsa, Okl., the 50 head of calves; had taken possession of the same, placed his brands up *1045 on them, and paid for them by cheek at the price of $36 per head, less pasture charges against them, which charges were deducted from the purchase price under the directions and with the knowledge and consent of the mortgagee, the Union National Bank of Tulsa, Okl.; that if the defendant Ellzey ever gave, Or attempted to give, to said Union National Bank a mortgage upon said calves, it was given and received in fraud, and at such time Ellzey and said bank well knew that the calves had been sold and delivered to him by the said Ellzey, with the knowledge and consent of said bank, and that same was done without his knowledge or consent, and that said mortgage as against him is void, and, being void between the original parties, is likewise.void in the hands of the pretended purchaser of said note, the plaintiff heroin. This part of the answer is verified. The plaintiff bank replied by a general demurrer and general denial.

There was a trial before a jury. When plaintiff closed in the introduction of testimony, the court directed a verdict against Ellzey for the full amount, and further instructed the jury to return a verdict for defendant Hoover and against the plaintiff, denying a foreclosure of the chattel mortgage. The appellant insists that this was error, because: (1) It had made out a pri-ma facie case entitling it to a foreclosure of the mortgage lien; (2) that the evidence was such that reasonable minds might reach a different conclusion; (3) that since it appeared that Hoover had purchased and converted the mortgage property with notice, the court should not. have directed a verdict against a foreclosure; and (4) that where the proof on the issue of plaintiff’s right to a personal judgment against one who had purchased and converted the mortgaged property is such that reasonable minds might reach different conclusions, it was error for the court to direct a verdict against it on such issue. The bank introduced the note in evidence; also the original notes, payable to the Union National Bank or order, and the chattel mortgage described above.

Ellzey testified, admittipg the execution of the original notes and mortgage, that the renewal note, for $942.48, was given for the balance due on the original notes described in the mortgage; that out of the 160 head of white-face calves he had sold 50 of them to the defendant Hoover at $35 per head; that the sale was made in June, 1920, but the calves were not delivered until October, 1920; that Hoover paid to the Union National Bank all of the purchase price except $942.48, and promised to pay said sum a little later on; that Hoover reguested the bank to wait on him for the balance; that the renewal note was made because Hoover requested that a little more time be granted ior him to discuss a pasture bill proposition with one Moody;' that Hoover was holding up the balance to get a settlement out of Moody, since it seemed that there was a controversy over some business affairs between Hoover, Ellzey, and Moody, which Hoover desired to get straightened out before settling for the cattle; that he told Hoover there was a mortgage on the cattle, and to send the money to the mortgagee; that he (Ellzey) could not use it, and that Hoover promised to pay the money to the mortgagee bank; that the mortgagee bank had instructed Hoover before any payment was made not to pay Ellzey but to make payment to the bank.

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Bluebook (online)
244 S.W. 1044, 1922 Tex. App. LEXIS 1351, Counsel Stack Legal Research, https://law.counselstack.com/opinion/first-nat-bank-of-tulsa-v-hoover-texapp-1922.