Thomas v. First National Bank of Mission

384 S.W.2d 219, 1964 Tex. App. LEXIS 2364
CourtCourt of Appeals of Texas
DecidedOctober 21, 1964
DocketNo. 14285
StatusPublished
Cited by2 cases

This text of 384 S.W.2d 219 (Thomas v. First National Bank of Mission) 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
Thomas v. First National Bank of Mission, 384 S.W.2d 219, 1964 Tex. App. LEXIS 2364 (Tex. Ct. App. 1964).

Opinion

MURRAY, Chief Justice.

This suit was instituted in the District Court of Zavala County by First National Bank of Mission, Texas, hereinafter called Bank, against J. M. Warren, hereinafter called Warren, and Luther Thomas, d/b/a Thomas Gin Company, hereinafter called Gin Company, seeking to recover against Warren the amount of principal, interest and attorney’s fees due upon one certain note in the principal sum of $38,465.77, and against Gin Company for the sum of $33,580.65, being the value of 265 bales of cotton alleged to belong to Warren, mortgaged by him to Bank, and allegedly converted by Gin Company. The trial was to a jury and resulted in judgment in favor of Bank against Gin Company for the sum of $21,232.02, together with interest, and providing that the sum of $4,243.56, now [221]*221held by Bank, be immediately applied as a credit upon the judgment, and providing further that Bank recover of Warren the further sum of $12,507.72, together with interest, and that Gin Company recover from Warren the sum of $16,988.46, together with interest, from which judgment Gin Company alone has appealed.

The parties agree that this appeal presents but two main questions, to-wit: “(1) Did the trial court err in not submitting an issue to the jury inquiring as to whether or not the defendant, mortgagor, J. M. Warren, was the owner of the cotton in question? (2) Did the trial court err in submitting Appellant’s requested Issue No. 1 inquiring whether Appellee had consented to the sale of the cotton in question?”

On April 1, 1958, Warren executed a chattel mortgage in favor of Bank covering cotton to be grown upon some 400 acres of land belonging to Four Way Land Company, Inc., located in Zavala County, Texas, to secure Bank in the payment of a $30,-000.00 note. This note was thereafter extended and an additional advance made under the chattel mortgage, which increased the note to the principal sum of $38,465.77. This chattel mortgage was timely recorded in Zavala County.

Thereafter Gin Company made advances to Warren for seed, fertilizer, insecticides, etc., totaling the sum of $21,232.02. Warren, either individually or as manager of Four Way Land Company, a corporation, produced 265 bales of cotton on the 400 acres, and this cotton was sold by Gin Company for the sum of $37,671.43, which sum Bank contends was converted by Gin Company.

Warren at one time owned the 400 acres upon which the cotton was grown, but he conveyed it to Four Way Land Company, Inc., hereinafter called Four Way, of which he was the manager and principal stockholder. The corporation was formed for the purpose of growing and selling crops. The deed conveying the land to the corporation was properly recorded in Zavala County. Warren had pledged all of his stock to Hartford Accident and Indemnity Company. Warren testified that he had an oral agreement with the corporation concerning the use of the 400 acres.

Appellant contends that under these facts a question was raised as to whether the cotton belonged to Warren or to the Corporation. No issue was requested by the Bank and none was submitted to the jury as to the ownership of the cotton. Warren gave the Bank the chattel mortgage in his name, and if he was not the owner of the cotton, then he had no right as an individual to create a lien on this cotton that would be binding on the true owner or on the Gin Company.

It occurs to us that the burden was upon the Bank to allege, prove and secure from the jury a finding that the cotton belonged to the mortgagor. Warren stated that he had an oral agreement with the corporation concerning the use of the 400 acres, but this testimony was not conclusive upon Gin Company. Bank alleged that the cotton was grown upon the 400 acres belonging to Four Way, that Warren had a lease contract with Four Way whereby he was entitled to farm the land for his own use, and therefore he was the owner of the crop when he gave the chattel mortgage in April, 1958. Bank failed to prove, and certainly did not conclusively prove, that Warren had a lease contract with Four Way, or the terms of any such lease if in fact one existed. Thus Bank failed to show that Warren was the owner of the crop at the time he gave the chattel mortgage. The burden was upon Bank to prove that it had a valid first mortgage upon the crop, and in order to do this it undertook to prove that the cotton crop was owned by Warren under a lease contract with Four Way, the owner of the land upon which the cotton was grown. In attempting to discharge this burden the Bank solicited from Warren the fact that he had an oral contract with Four Way concerning the use of the land. Warren [222]*222was taken on voir dire examination and admitted that he based his statement upon conversations which took place before the corporation was formed. He further testified there was conversation afterward but did not state with whom, or of what the conversation consisted. Ralph Cadwallader, Esq., who owned a share of stock in Four Way and was its secretary, testified that Warren was to stay in possession of the land, was to pay the taxes and was to pay the Travelers Insurance Company loan whenever he could, and to make other payments. He did not testify that the corporation leased the land to Warren. He further testified that there was nothing in the minutes of the corporation with reference to any lease contract.

This evidence is insufficient to show that Warren had a lease contract with Four Way, and if so what its terms were. These were bare conclusions or opinions of Cad-wallader, without any basis of fact, and had no probative force. Webb v. Reynolds, Tex.Com.App., 207 S.W. 914.

There is a presumption that crops growing upon land belong to the owner of the land. In 15 Am.Jur., § 7, p. 199, it is stated: “The ownership of realty carries with it, as an incident thereto, the prima facie presumption of the ownership of both the natural products of the land and annually sown crops.”

The fact that Warren was in possession of the land does not establish his ownership of the crop; being president and manager of the corporation, he was the proper person to be in possession. In 13 Am.Jur. p. 960, § 1008, it is stated: “The general rule that the possession of a trustee or agent is not deemed adverse to his cestui que trust or principal applies to the officers of corporations who have possession of land belonging to the corporation until they give notice to it of an intent to hold for their personal benefit.” The Bank undertook to prove that Warren, and not Four Way, was the owner of the cotton because he had leased the land from the corporation. This it failed to do. Rhea Mortgage Co. v. Lemmerman, Tex.Com.App., 10 S.W.2d 690; Trott v. Flato, Tex.Civ.App., 244 S.W. 1085.

Even if the evidence offered by Bank had been sufficient to raise a fact issue'as to whether Warren was the owner of the cotton crop at the time he gave the chattel mortgage to Bank, it would have been the Bank’s duty to except to the court’s charge for failure to submit an issue upon this matter and also to request an issue upon the same, and having failed to do either, waived its right to a jury finding on the issue. Rules 274 and 279, Texas Rules of Civil Procedure; Strauss v. LaMark, Tex., 366 S.W.2d 555; Zachry v. McKown, Tex.Civ.App., 326 S.W.2d 227; Schwarz v.

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Related

First National Bank of Mission v. Thomas
402 S.W.2d 890 (Texas Supreme Court, 1966)

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384 S.W.2d 219, 1964 Tex. App. LEXIS 2364, Counsel Stack Legal Research, https://law.counselstack.com/opinion/thomas-v-first-national-bank-of-mission-texapp-1964.