W. D. Cleveland & Co. v. Carr

38 S.W. 1123, 90 Tex. 393, 1897 Tex. LEXIS 313
CourtTexas Supreme Court
DecidedFebruary 15, 1897
StatusPublished
Cited by5 cases

This text of 38 S.W. 1123 (W. D. Cleveland & Co. v. Carr) is published on Counsel Stack Legal Research, covering Texas Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
W. D. Cleveland & Co. v. Carr, 38 S.W. 1123, 90 Tex. 393, 1897 Tex. LEXIS 313 (Tex. 1897).

Opinion

BROWN, Associate Justice.

The Court of Civil Appeals for First Supreme Judicial District has certified to this court the following statement and questions:

“The appellee, Jno. F. Carr, having arranged to form a partnership ' in mercantile business with D. S. Chandler, applied to Brown Bros, and Co. for a loan of $10,000 to be used as his capital in the concern, such loan to be secured by mortgage of his lands. Brown Bros, and Co. declined to make 'the loan upon the lands alone, requiring the endorsement, or guaranty, of Cleveland and Co. and Halfl: and Eeubouer Bros., and the two latter agreed with Brown Bros, and Chandler, who was assisting Carr in negotiating the loan, to guarantee the notes. The notes executed for the loan were signed by Jno. F. Carr, by Chandler and Carr as a firm, and by D. S. Chandler, the last named as surety; and Cleveland and Co. and Halif and Eeubouer Bros., by a separate instrument, agreed, as guarantors, to pay any balance remaining unpaid after a sale of the lands mortgaged to secure them, if the makers of the notes failed *394 to pay them at maturity, and Carr and his wife executed deeds of trust on land in several counties to secure the notes. It is claimed hy Carr that he did not know of or consent to the guaranty, until after the money had been obtained and used hy Cleveland, as stated below, when he was informed of it and raised no objection. At the same time the notes and mortgage were signed by Carr, in Polk County, an order, signed by him, or by Chandler and Carr, was executed in favor of Cleveland and Co. on Brown Bros, and Co., authorizing the latter to pay the money to the former, which was done. Cleveland and Co. knew the money was obtained for Carr and the purpose for which it was done. Chandler had previously carried on a mercantile business and was indebted to Cleveland and Co. and Halff and bTeubouer. It is claimed by Cleveland and Co. that the guaranty was executed upon an agreement with Chandler, representing Carr as his agent, that the money, when obtained, should be applied to the extinguishment of this indebtedness. As to the fact of this agreement with Chandler, and as to" the latter’s authority to represent Carr in making it, if he did so, the evidence is in conflict.

“Cleveland and Co. received the money from Brown Bros, and never paid it over to Carr or to the firm of Chandler and Carr, but applied it to the payment of the indebtedness of Chandler to the two firms.

“There were three notes given to Brown Bros. & Co., two for $3000 each and one for $4000. The money having become due and being unpaid, Brown Bros, caused the lands .situated in one of the counties, included in the deed of trust, to be sold by the trustee, and they were purchased by Cleveland and Co. for $7500. An endorsement of satisfaction was made by the holders upon the $4000 note and a credit was entered upon one of the others. Cleveland and Co. then paid to Brown Bros, and Co. the balance due on the notes and they were all delivered to Cleveland and Co., Brown Bros, and Co. executing to them a written transfer of the two $3000 notes and the deeds of trust. Cleveland and Co. after-r wards caused the lands in another county to be sold by the trustee for $750. Lands embraced in the deed of trust in still another county remained unsold. The sales are conceded to be void because of non-compliance with the terms of the power of sale.

“Carr brought this suit, seeking to recover the lands because of the invalidity of the sale, and also to have the notes and deed of trust cancelled because of Cleveland and Co.’s conduct in securing and appropriating the borrowed money and of other alleged fraudulent conduct; and, in the alternative, to recover the money appropriated by Cleveland and Co., as before stated. Cleveland and Co. contested their liability for the money and also pleaded limitation and, in reconvention, claimed to be the holders of the notes, and, admitting the sales to be void, sought judgment for the amount due on the notes and an enforcement of the lien on the land. In the court below, Carr was allowed to recover the $10,000, with legal interest from the date of its conversion, and Cleveland and Co. recovered for the amount due on the notes to Brown Bros, and Co., including interest at the agreed rate (nine per cent.) and an attorney’s fee *395 stipulated in the notes to be paid in case the “holder” should have to sue or go into court “in respect hereof or the property securing” them; and, the amount thus found due them exceeding that found for Carr, judgment was rendered in favor of Cleveland and Co. for the excess.

“The questions presented for the decision of the Supreme Court are:

“First: Under the facts stated as to the manner in which Cleveland and Co. acquired the notes and mortgage from Brown Bros, and Co., are they to be treated as assignees thereof, entitled to recover whatever Brown Bros, and Co. could have recovered of Carr, or do their rights rest wholly upon the doctrine of subrogation, entitling them to recover, if anything, the sum paid by them with legal interest secured by the lien on the land?

“Second: If it were found, upon a contested issue, that Cleveland and Co. applied the $10,000 without authority from Carr, and that a cause of action accrued to the latter for such conversion, which is barred by the statute of limitation, would it be proper for the court, by the application of the maxim that ‘he who seeks equity must do equity’ or other principle, to require them to account for the money thus appropriated before a remedy is given them for the money paid by them upon the notes. Is the right to recover for conversion of the money so connected with the cause of action asserted by Cleveland and Co. as to make such a principle applicable, and if so, should the court, for the purpose of applying such a principle, after a sufficient time had elapsed to bar a right of .action for the conversion, undertake to determine, upon disputed facts, the question whether or not Cleveland and Co. became liable for the appropriation of the money?

“Third: If the second question and its subdivisions are answered negatively, would the additional fact, if established, that Cleveland and Co. for the preconceived purpose of getting into their hands Carr’s money and applying it to Chandler’s debts, without Carr’s knowledge or consent, agreed with Chandler and Brown Bros, and Go., withput Carr’s knowledge, to sign the guaranty with this understanding, and with this purpose, carried out the transaction as stated, affect the question, and how?” (

The appellants W. D. Cleveland and Company filed in this court a motion asking that the Court of Civil Appeals be required to amend and enlarge its statement of the facts which accompanies the questions certified. The motion is overruled because we have no authority to direct or control that court in the manner of making a statement or formulating the questions presented. When questions are certified we will examine them and determine whether they are so presented as to give this court jurisdiction, and if found so to be, to make the answers, otherwise to decline.

If the appellants had moved the court to dismiss the questions for want of a compliance with the law, the mattep contained in the motion, so far as it is sustained by the statement certified, -would have received consideration, but as to those matters contained in the motion which *396

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Bluebook (online)
38 S.W. 1123, 90 Tex. 393, 1897 Tex. LEXIS 313, Counsel Stack Legal Research, https://law.counselstack.com/opinion/w-d-cleveland-co-v-carr-tex-1897.