Littlefield v. Scott

244 S.W. 824, 1922 Tex. App. LEXIS 1327
CourtCourt of Appeals of Texas
DecidedNovember 3, 1922
DocketNo. 789. [fn*]
StatusPublished
Cited by6 cases

This text of 244 S.W. 824 (Littlefield v. Scott) 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
Littlefield v. Scott, 244 S.W. 824, 1922 Tex. App. LEXIS 1327 (Tex. Ct. App. 1922).

Opinion

WALKER, J.

Appellee, Leonard D. Scott, instituted this suit against Wm. 'T. Little-field and wife on the 12th day of April, 1916, on the following contract:

“This writing witnesseth that whereas, Leonard D. Scott is security for William T. Little-field upon the following notes, to wit:
“One note in the sum of $1,500.00 dated Oct. 18, 1913, payable to the State Bank of West Terre Haute, Indiana.
“One note in the sum of $500.00 dated Sept. 9, 1913, payable to the State Bank of West Terre Haute, Indiana.
“One note in the sum of $1,000.00 dated Dec. 23, 1912, payable to M. J. Watson.
“One note in the sum of $1,000.00 dated Nov. 10, 1913, payable to the Terre Haute Savings Bank at Terre Haute, Indiana.
“And whereas, it is the intention of the said Littlefield to make payments upon said notes from time to time and make renewals thereof and if the same may become necessary to borrow money elsewhere to pay off any part of said notes as the case may be.
“The total of said notes representing approximately $4,000.00 in indebtedness upon which the said Leonard D. Scott is security:
“Now, therefore, in order to secure save free and harmless the said Leonard D. Scott from the payment of any part of the said notes, the said Littlefield, together with his wife, com veyed unto the said Leonard D. Scott an undivided one-half interest in 1,069 acres of land in Liberty county, Texas, being in the Wm. B. Re.ed survey.
“And the said Leonard D. Scott, together with his wife, shall reconvey the said real estate unto the said" William T. Littlefield upon the said William T. Littlefield paying in full all of said notes, renewals thereof, or other money secured with -which to' satisfy said notes upon which the said Scott may be indorser, all together with interest, costs of ■ whatsoever nature and kind,- and shall further save free and harmless the said Scott from the payment of any sum of money upon said notes or any part thereof.
“And further if the said Scott or Littlefield or both procure a sale for the said real estate, the price of which shall be agreeable and acceptable to both the said Littlefield and said Scott, which acceptance shall be signified by writing by the said Littlefield to the said Scott, the said Scott shall execute a deed for said real estate to the purchaser thereof, and shall out of one-half of the purchase money received therefor pay in full all of the indebtedness together with interest thereon as represented by said notes or any other notes upon which he may be indorser which has been given for money with which to pay the said notes herein-above enumerated for any part thereof. And the excess, if any, from said one-half, shall be paid by the said Scott unto the said Littlefield.
“It is further provided that if at the end of three years from the date hereof the said Lit-tlefield shall not have paid in full the said notes that this contract shall be null and void. And also in such event the said real estate shall become the absolute property of the said Leonard D. Scott.
“At any time within three years from this date that Mr. Littlefield can liquidate the above-described indebtedness by a sale of the undivided one-half interest of the above-described tract of land or otherwise, that the said Scott will transfer with his wife to Little-field an undivided one-half interest in said above-described real estate.
“Dated this 3d day of April, 1914.
“Leonard D. Scott.
“William T. Littlefield.”

And, on the theory that it was an indemnity mortgage, he recovered judgment against them, with foreclosure, for the sum of $5,-400. Appellants defended under the two and four year statutes of limitation. The proof showed that appellee paid all the notes described in the foregoing contract, some of them on maturity, which was six months after the date of the notes so paid, that one of them was extended from time to time be-' fore payment, appellee paying the interest each time to secure the extension, and that one of the notes was not paid until June, 1916, which was less than four years, but more than two years, before the institution of this suit. All the other notes were paid more than four years before ■ the institution *826 of this suit. On the 17th of April, 1916, and on the consecutive years thereafter, ap-pellee paid all taxes on the land for the years 1914 to 1920. The trial court’s judgment in favor of appellee rests on the following conclusion of law, which we believe is sound:

“I find that the statute of limitations was not put in motion until three years after the date of the execution of the written contract between plaintiff and defendant, to wit, April 3, 1914, and that limitation was not started until April 3, 1917, and, this suit having been filed on April 12, 1920, it was within four years after plaintiff’s cause'of action accrued; and in this connection I find that plaintiff’s cause of action is based on the written contract of indemnity entered into between plaintiff and defendant, and is not based on the implied obligation which the law would have raised against the principal (the defendant herein) in favor of the surety (plaintiff) on the payment by the plaintiff of the defendant’s notes, in the absence of the written contract; that whereas such implied obligation would be barred in two years, that there being a written contract of indemnity executed by defendant to plaintiff, that the four years’ statute of limitation applies; and I find in this connection that plaintiff’s cause of action did not arise, against the defendant on the payment of each respective note by the plaintiff, but under the express terms of the contract it was agreed and contemplated that the defendant would have three years after the date of the deed and contract in which to repay the then payees in each of said respective notes, or to any one else who might at interim have paid said notes, and that the plaintiff on paying the notes had no cause of action against the defendant for reimbursement until the expiration of three years from the date of the contract.”

Opinion.

While we recognize that the suit of an indorser against his principal for the amount of the note which he is compelled to pay is ordinarily upon an implied contract, and barred by the statute of limitation of two years (Faires v. Cockerell, 88 Tex. 428, 31 S. W. 190, 639, 28 L. R. A. 528), this case does not come within that rule, because appellee’s cause of action is not based on an implied contract, but on the written contract of indemnity.

The only question then that we see in this case is: When did limitation begin to run under the foregoing contract? It seems to us that the trial court was correct in fixing this date at three years after the date of the contract, which would be the 3d day of April, 1917. The spirit of the contract, as we understand it, was to give Mr. Little-field three years in which to pay off all the notes. The contract provides:

“At any time within three years from this date that Mr.

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Bluebook (online)
244 S.W. 824, 1922 Tex. App. LEXIS 1327, Counsel Stack Legal Research, https://law.counselstack.com/opinion/littlefield-v-scott-texapp-1922.