McFarlane v. First Nat. Bank of Orange

97 S.W.2d 754
CourtCourt of Appeals of Texas
DecidedOctober 24, 1936
DocketNo. 2770
StatusPublished
Cited by11 cases

This text of 97 S.W.2d 754 (McFarlane v. First Nat. Bank of Orange) 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
McFarlane v. First Nat. Bank of Orange, 97 S.W.2d 754 (Tex. Ct. App. 1936).

Opinion

O’QUINN, Justice.

This is an appeal from a judgment of the district court of Orange county. The suit was filed January 21, 1931, by the First National Bank of Orange, Tex., against A. C. McFarlane, C. W. McFar-lane, W. S. McFarlane, C. H. McFarlane (known also as Harold C. McFarlane), Charles T. McFarlane (sometimes mentioned as C. T. McFarlane), Mrs. Annie Murray Smith and her husband Willard W. Smith, Mrs. Addie M. Cooke, a feme sole, Mrs. Edward Kesse (formerly Mrs. Mona Sanders) and her husband Edward Kesse, F. L. McFarlane, H. A. Burr, Lee Wood-worth, the Orange Iron Works,'a copart-nership composed of W. S. McFarlane and C. H. McFarlane, and Sabine Oil Corporation.

The bank alleged that A. C. McFarlane was indebted to it, either as maker or in-dorser, on notes for $2,000, $8,242, $1,900, $3,700, $700, $8,600, and $1,600. That said C. W. McFarlane was also liable to it, either as maker or indorser, on notes for $3,700, $700, and $1,600. That Sabine Oil Corporation, the Orange Iron Works, H. A. Burr, and Lee Woodworth were also liable to it either as makers or indorsers, on the $1,600 note.

The bank further alleged that the liability of A. C. McFarlane to it was secured by a collateral note for $25,000 executed by said A. C. McFarlane, the payment of which, and all the indebtedness of said A. C. McFarlane to said bank, was secured by a certain vendor’s lien note for $90,000, executed by W. S. McFarlane and C. H. McFarlane, payable to the order of C. W. McFarlane, A. C. McFarlane, C. T. Mc-Farlane, Mrs. Addie Cooke, a feme sole, Mrs. Annie Murray Smith and her husband Willard Smith, F. L. McFarlane, and Mrs. Mona Sanders and her husband. Arthur Sanders, which said $90,000 note was secured by a vendor’s lien on block 7, and lot A in block 8 of the Wingate addition to the city of Orange, Tex., referred to and known as the “Iron Works property.”

Plaintiff bank prayed for judgment against A. C. McFarlane for the principal sum of $25,907.29, with interest and attorney’s fees; and against C. W. McFar-lane, jointly and severally, with A. G Mc-Farlane, for $4,400, with interest and attorney’s fees; and against C. W. McFar-lane, H. A. Burr, Lee Woodworth, Sabine Oil Corporation, the Orange Iron Works, W. S. McFarlane, and C. H. McFarlane, jointly and severally, with A. C. McFar-lane, for $1,600, with interest and attorney’s fees. It also prayed judgment against the makers and indorsers of the $90,000 vendor’s lien note for the principal sum of $88,000 with interest against all the defendants, costs of suit, and for foreclosure of the vendor’s lien on the property described, and for general relief.

The defendants C. W. McFarlane, W. S. McFarlane, C. H. McFarlane, Charles T. McFarlane, Mrs. Annie Murray Smith, Willard W. Smith, Mrs. Addie M. Cooke, Mrs. Edward Kesse, Edward Kesse, F. L. McFarlane, H. A. Burr, and Orange Iron Works, filed answers. No answer was filed by the defendants A. C. McFarlane, Lee Woodworth, and Sabine Oil Corporation, and on February 6, 1931, an interlocutory judgment was entered against them by default to which they have not objected.

The defendant C. W. McFarlane died on April 9, 1932, and M. G. Davies, as independent executor of his will and estate, was made party defendant, and filed his answer October 6, 1932, adopting the answer theretofore filed by said C. W. McFarlane.

February 9, 1934, plaintiff First National Bank in Orange filed its first amended original petition alleging that it was the successor to the “First National Bank of Orange, Texas,” having acquired the cause of action pending in the pending suit, and making substantially the same allegations as set-out in the original petition.

February 12, 1934, the defendants, except A. C. McFarlane, Lee Woodworth, and Sabine Oil Corporation, against whom [756]*756judgment had been rendered, and Mrs. Rosie McFarlane, widow of C. W. McFar-lane, who had theretofore made herself a party defendant, filed their second amended original answer and cross-action. In brief they pleaded: (a) General demurrer; (b) general denial; (c) that the property securing the payment of the $90,000 vendor lien note (which A. C. McFarlane had assigned to the plaintiff bank as collateral security for the payment of certain indebtedness to the bank) was the business homestead of C. W. McFarlane and his wife, Rosie McFarlane; (d) that C. W. McFarlane, A. C. McFarlane, and the Orange Iron Works were indebted to the Guaranty Bond Bank & Trust Company of Orange, Tex., in approximately the sum of $25,000, and that the sale of the .Orange Iron Works property to W. S. McFarlane and C. H. McFarlane, and the taking of the $90,000 vendor’s lien note by the vendors therefor, was a pretended transaction for the purpose of placing said property beyond the reach of the Guaranty Bond Bank & Trust Company; (e) that the purported deed conveying said property to W. S. Farlane and C. H. McFarlane was never delivered; (f) that no consideration for said property was ever paid to the grantors in said deed; (g) that the grantees in said deed never took possession of said property under said deed; (h) that the $90,000 vendor’s lien note was indorsed by the payees thereof, so that a purported hypothecation of said note with some unknown person could be made until the protection of said property had been accomplished; (i) that A. C. McFarlane, to whom said note had been indorsed, without the knowledge or consent of the other indorsers of said note, pledged said note with the First National Bank of Orange to secure his pre-existing indebtedness to said bank; (j) that said bank took said note with the full understanding that it was not to be sued upon or the vendor’s lien securing its payment foreclosed; (k) that said bank knew the infirmities-in said note at the time it received same from said A. C- McFarlane; (1) that said bank was not a holder of said note in due course; (m) that said bank paid no consideration or value for said note; (n) under oath denied that the Orange Iron Works was a partnership composed of W. S. McFarlane and C. II. McFarlane, and alleged that said Orange Iron Works was a trade-name under which C. W. McFar-lane carried on his business; and (o) that W. S. McFarlane and C. H. McFarlane received no consideration for the execution of the $90,000 note. Their cross-action alleged, substantially, the same matters as set up in their amended answer above mentioned.

The plaintiff bank replied to the answer and cross-action of defendants by supplemental petition. Its demurrers and exceptions were overruled, and the cause tried to a jury upon special issues, in answer to which the jury found: (a) That the deed of date January 4, 1927 (conveying the property for which the $90,000 vendor’s lien note was given) was not a pretended sale; (b) that at the time the First National Bank of Orange, Tex., acquired the $90,000 note, an installment of payment on same was due and unpaid; (c) that the property conveyed by deed of January 4, 1927, was not the business homestead of C. W. McFarlane (a grantor in the deed); (d) that the deed of January 4, 1927 (conveying the property for which the $90,000 vendor’s lien note was executed) was delivered to the grantees, C. H. McFarlane and W. S. McFarlane, with the intention to pass and vest title to said grantees in and to said property; (e) that a consideration passed to C. H. McFarlane and W. S. McFarlane for the execution of the $90,000 vendor lien note in payment for the property conveyed; and (f) that the grantors in the deed of January 4, 1927, conveying the property to C. H. McFarlane and W. S. McFarlane, received a consideration for the execution of said deed.

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