Friddell v. Greathouse

Court of Appeals of Texas

Friddell v. Greathouse

230 S.W.2d 579, 1950 Tex. App. LEXIS 2145

CourtCourt of Appeals of Texas

DecidedFebruary 17, 1950

Docket14169

StatusPublished

Cited by9 cases

This text of 230 S.W.2d 579 (Friddell v. Greathouse) 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

Friddell v. Greathouse, 230 S.W.2d 579, 1950 Tex. App. LEXIS 2145 (Tex. Ct. App. 1950).

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Opinions

BOND, Chief Justice.

Appellant instituted this suit against ap-pellees to recover the sum of $704.20, being the amount of two checks both .dated April 3, 1946, payable to the order of plaintiff and signed by Mrs. Mamie Great-house (one of the appellees herein) in the [580]*580presence of and .at the instance of her husband J. M. Greathouse (the other appel-lee), in settlement of an account or 'debt then due appellant. The checks were on the First National Bank of Wills Point, .Texas, and b'éfore presentment the bank received stop-payment order from Mr. Greathouse against payment of the checks; resulting in the bank’s returning the checks to appellant — marked “Stopped Payment.” Appellant alleged that the checks were given for value received and, on trial, submitted proof that they were given to him “to settle an account.” Appellees assign no cause or reason in pleadings or proof for their protestations against payment of the checks as a defense to ^appellant’s suit.

The trial was to the court without a jury, and judgment entered that plaintiff take nothing by his suit. At the request of the plaintiff, the court timely filed findings of fact and conclusions of law as a basis for its judgment. Summarized: The court correctly found that the checks were duly executed and given for an antecedent or prior existing debt; and before they were presented to the bank for payment, were ordered stopped by the makers. In its conclusions of law the court held that the checks were executory in nature; that the debt, represented by the amount of the checks, was not discharged by the bank’s dishonor of said checks; and not having passed into the hands of a bona fide holder 'for value, the makers having exercised their legal rights in stopping payment before the bank’s acceptance or payment, the plaintiff should not recover on the checks, but was relegated to suit on his original debt. Such holding is not applicable to this suit or to the facts found ¡by the trial court. The plaintiff elected to prosecute his suit perforce of the checks, which he had a. right to do.

The First National Bank is not a party to this suit. Indeed, the checks were ex-ecutory, not accepted or paid by the bank; and before such acceptance or payment, the bank incurred no liability for their nonpayment. The order to stop payment relieved the bank of all liability; however, such did not relieve the makers of the legal import of the checks.

A check is a bill of exchange on a bank or drawee, payable on demand or presentment. It does not operate as an assignment of funds in the hands of the drawee available for.the payment thereof, and the drawee is not liable on the checks unless and until accepted by it. Negotiable Instruments Act, Title 98, Article 5932 et seq., secs. 126, 127, 185, Vernon’s Ann.Civ.St. .The makers of a check may not avoid its legal import merely by stopping payment in advance of the drawee’s acceptance or certification. Under the law merchant a check, as other bills of exchange, is deemed prima facie to have been given for value; and, to impeach its validity, the burden rests upon the one seeking to avoid its legal consequences.’ While a payee in a check (he being an immediate party to the transaction) is not regarded as a “holder in due course,” as that term is usually employed in innocent purchases of negotiable instruments, yet, so long as the check remains in the payee’s possession, in absence of a plea of partial, or total, failure of consideration, or other legal defenses, he has all the rights of a holder in due course, and may sustain suit on the check which evinces the amount of his debt.

In the light of appellant’s pleadings and evidence, in the absence of defensive pleadings, or evidence to the contrary, the court should have entered judgment in favor of plaintiff for the face value ofi the checks in suit. The judgment of the court below is therefore reversed and here rendered in favor of appellant for the sum of $704.20 with 6% interest from January 1, 1947 until paid, and all costs of suit.

Reversed and rendered.

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BOND, Chief Justice.

Appellant instituted this suit against ap-pellees to recover the sum of $704.20, being the amount of two checks both .dated April 3, 1946, payable to the order of plaintiff and signed by Mrs. Mamie Great-house (one of the appellees herein) in the [580]*580presence of and .at the instance of her husband J. M. Greathouse (the other appel-lee), in settlement of an account or 'debt then due appellant. The checks were on the First National Bank of Wills Point, .Texas, and b'éfore presentment the bank received stop-payment order from Mr. Greathouse against payment of the checks; resulting in the bank’s returning the checks to appellant — marked “Stopped Payment.” Appellant alleged that the checks were given for value received and, on trial, submitted proof that they were given to him “to settle an account.” Appellees assign no cause or reason in pleadings or proof for their protestations against payment of the checks as a defense to ^appellant’s suit.

The trial was to the court without a jury, and judgment entered that plaintiff take nothing by his suit. At the request of the plaintiff, the court timely filed findings of fact and conclusions of law as a basis for its judgment. Summarized: The court correctly found that the checks were duly executed and given for an antecedent or prior existing debt; and before they were presented to the bank for payment, were ordered stopped by the makers. In its conclusions of law the court held that the checks were executory in nature; that the debt, represented by the amount of the checks, was not discharged by the bank’s dishonor of said checks; and not having passed into the hands of a bona fide holder 'for value, the makers having exercised their legal rights in stopping payment before the bank’s acceptance or payment, the plaintiff should not recover on the checks, but was relegated to suit on his original debt. Such holding is not applicable to this suit or to the facts found ¡by the trial court. The plaintiff elected to prosecute his suit perforce of the checks, which he had a. right to do.

The First National Bank is not a party to this suit. Indeed, the checks were ex-ecutory, not accepted or paid by the bank; and before such acceptance or payment, the bank incurred no liability for their nonpayment. The order to stop payment relieved the bank of all liability; however, such did not relieve the makers of the legal import of the checks.

A check is a bill of exchange on a bank or drawee, payable on demand or presentment. It does not operate as an assignment of funds in the hands of the drawee available for.the payment thereof, and the drawee is not liable on the checks unless and until accepted by it. Negotiable Instruments Act, Title 98, Article 5932 et seq., secs. 126, 127, 185, Vernon’s Ann.Civ.St. .The makers of a check may not avoid its legal import merely by stopping payment in advance of the drawee’s acceptance or certification. Under the law merchant a check, as other bills of exchange, is deemed prima facie to have been given for value; and, to impeach its validity, the burden rests upon the one seeking to avoid its legal consequences.’ While a payee in a check (he being an immediate party to the transaction) is not regarded as a “holder in due course,” as that term is usually employed in innocent purchases of negotiable instruments, yet, so long as the check remains in the payee’s possession, in absence of a plea of partial, or total, failure of consideration, or other legal defenses, he has all the rights of a holder in due course, and may sustain suit on the check which evinces the amount of his debt.

In the light of appellant’s pleadings and evidence, in the absence of defensive pleadings, or evidence to the contrary, the court should have entered judgment in favor of plaintiff for the face value ofi the checks in suit. The judgment of the court below is therefore reversed and here rendered in favor of appellant for the sum of $704.20 with 6% interest from January 1, 1947 until paid, and all costs of suit.

Reversed and rendered.

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230 S.W.2d 579, 1950 Tex. App. LEXIS 2145, Counsel Stack Legal Research, https://law.counselstack.com/opinion/friddell-v-greathouse-texapp-1950.

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